|6 Months Ended|
Jun. 30, 2019
Note 6 - Stockholders' Equity
The Company is authorized to issue 60,000,000 common shares with a par value of $0.0001 per share, of which 7,000,000 shares are designated as “Class A common stock.” As of June 30, 2019 and December 31, 2018, there were 7,000,000 shares of Class A common stock issued and outstanding to Fortress. Dividends are to be distributed pro-rata to the Class A and common stock holders. The holders of common stock are entitled to one vote per share of common stock held. The Class A common stock holders are entitled to a number of votes per share equal to 1.1 times a fraction, the numerator of which is the sum of the shares of outstanding common stock and the denominator of which is the number of shares of Class A common stock. Accordingly, the holder of shares of Class A common stock will be able to control or significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions. Each share of Class A common stock is convertible, at the option of the holder thereof, into one (1) fully paid and non-assessable share of common stock subject to adjustment for stock splits and combinations.
In November 2017, the Company filed a shelf registration statement on Form S‑3 (the "S‑3"), which was declared effective in December 2017. Under the S‑3, the Company may sell up to a total of $100 million of its securities. In connection with the S‑3, the Company entered into an At-the-Market Issuance Sales Agreement (the "ATM") with Cantor Fitzgerald & Co., Ladenburg Thalmann & Co. Inc. and H.C. Wainwright & Co., LLC (each an "Agent" and collectively, the "Agents"), relating to the sale of shares of common stock. Under the ATM, the Company pays the Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock.
During the six months ended June 30, 2019, the Company sold a total of 1,088,226 shares of common stock under the ATM for aggregate total gross proceeds of approximately $4.5 million at an average selling price of $4.12 per share, resulting in net proceeds of approximately $4.4 million after deducting commissions and other transaction costs.
Pursuant to the Founders Agreement, the Company issued to Fortress 2.5% of the aggregate number of shares of common stock issued in the ATM offering noted above. Accordingly, the Company issued 27,195 shares of common stock to Fortress and recorded expense of approximately $106,000 related to these stock grants, which is included in general and administrative expenses in the Company's Condensed Statements of Operations for the six months ended June 30, 2019.
Pursuant to the Founders Agreement, the Company issued 960,428 shares of common stock to Fortress for the Annual Equity Fee, representing 2.5% of the fully-diluted outstanding equity of Checkpoint on January 1, 2019 (see Notes 2 and 4).
Subsequent to the second quarter, through July 30, 2019, the Company sold a total of 1,001,485 shares of common stock under the ATM for aggregate total gross proceeds of approximately $3.1 million at an average selling price of $3.06 per share, resulting in net proceeds of approximately $3.0 million after deducting commissions and other transaction costs.
The S‑3 is currently the Company's only active shelf registration statement. Subsequent to the offerings noted above, approximately $61.5 million of the shelf remains available for sale under the S‑3. The Company may offer the securities under the S‑3 from time to time in response to market conditions or other circumstances if it believes such a plan of financing is in the best interests of its stockholders. The Company believes that the S‑3 provides it with the flexibility to raise additional capital to finance its operations as needed.
Equity Incentive Plan
The Company has in effect the Amended and Restated 2015 Incentive Plan (“2015 Incentive Plan'). The 2015 Incentive Plan was adopted in March 2015 by our stockholders. Under the 2015 Incentive Plan, the compensation committee of the Company's board of directors is authorized to grant stock-based awards to directors, officers, employees and consultants. An amendment to the 2015 Incentive Plan was approved by stockholders in June 2017 to increase the shares available for issuance to 5,000,000 shares. The plan expires 10 years from the effective date of the amendment and limits the term of each option to no more than 10 years from the date of grant.
As of June 30, 2019, 1,534,805 shares are available for issuance under the 2015 Incentive Plan.
Certain employees, directors and consultants have been awarded restricted stock. The restricted stock vesting consists of milestone and time-based vesting. The following table summarizes restricted stock award activity for the six months ended June 30, 2019:
As of June 30, 2019, there was $4.2 million of total unrecognized compensation cost related to non-vested restricted stock, which is expected to be recognized over a weighted-average period of 1.2 years. This amount does not include, as of June 30, 2019, 333,334 shares of restricted stock outstanding which are performance-based and vest upon achievement of certain corporate milestones. The expense is recognized over the vesting period of the award. Stock-based compensation for milestone awards will be measured and recorded if and when it is probable that the milestone will be achieved.
The following table summarizes stock option award activity for the six months ended June 30, 2019:
Upon the exercise of stock options, the Company will issue new shares of its common stock.
A summary of warrant activities for the six months ended June 30, 2019 is presented below:
Upon the exercise of warrants, the Company will issue new shares of its common stock.
The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2019 and 2018 ($ in thousands):
The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef