Note 9 - Stockholders’ Equity

Common Stock

At-the-Market Offering

On July 13, 2018, the Company filed a shelf registration statement No. 333-226175 on Form S-3, as amended on July 20, 2018 (the “2018 Mustang S-3”), which was declared effective in August 2018. Under the 2018 Mustang S-3, the Company may sell up to a total of $75.0 million of its securities. In connection with the 2018 Mustang S-3, the Company entered into an At-the-Market Issuance Sales Agreement (the “Mustang ATM”) with B. Riley FBR, Inc., Cantor Fitzgerald & Co., National Securities Corporation, and Oppenheimer & Co. Inc. (each an "Agent" and collectively, the “Agents”), relating to the sale of shares of common stock. Under the Mustang 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 three months ended March 31, 2020, the Company issued approximately 1.2 million shares of common stock at an average price of $3.93 per share for gross proceeds of $5.0 million under the Mustang ATM. In connection with these sales, we paid aggregate fees of approximately $0.1 million for net proceeds of approximately $4.9 million. No sales were made under the 2018 Mustang ATM during the three months ended March 31, 2019.

As of March 31, 2020, approximately $15.9 million of the 2018 Mustang S-3 remains available for sales of securities. Mustang may offer the securities under the 2018 Mustang 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.

Stock Awards

Stock Options

The Company has in effect the 2016 Incentive Plan (the “Incentive Plan”). The Incentive Plan was adopted in 2016 by our stockholders and the compensation committee of the Company’s board of directors and is authorized to grant stock-based awards to directors, officers, employees and consultants. The plan initially authorized grants to issue up to 2,000,000 shares of authorized but unissued common stock, expires 10 years from adoption, and limits the term of each option to no more than 10 years from the date of grant. In June 2018, the Company’s stockholders approved an amendment to the Incentive Plan to increase the number of authorized shares issuable by 3,000,000 shares, for a total of 5,000,000 shares. Total shares available for the issuance of stock-based awards under the Incentive Plan was 1,445,515 shares at March 31, 2020.

The following table summarizes stock option activities for the three months ended March 31, 2020:

 

 

As of March 31, 2020, the Company had unrecognized stock-based compensation expense related to options of $0.5 million, which is expected to be recognized over the remaining weighted average vesting period of approximately 1.1 years.

 

Restricted Stock

The following table summarizes restricted stock award activities for the three months ended March 31, 2020:

 

 

As of March 31, 2020, the Company had unrecognized stock-based compensation expense related to restricted stock of $0.6 million, which is expected to be recognized over the remaining weighted average vesting period of approximately 2.0 years. This amount does not include, as of March 31, 2020, 68,158 shares of restricted stock outstanding which are performance-based and vest upon achievement of certain corporate milestones. Stock-based compensation for milestone awards will be measured and recorded if and when it is probable that the milestone will be achieved.

Restricted Stock Units

Certain employees and consultants have been awarded restricted stock units with time-based vesting. The following table summarizes restricted stock units’ activities for the three months ended March 31, 2020:

 

 

As of March 31, 2020, the Company had unrecognized stock-based compensation expense related to restricted stock units of approximately $2.2 million, which is expected to be recognized over the remaining weighted average vesting period of approximately 1.9 years. This amount does not include, as of March 31, 2020, 230,000 shares of restricted stock units outstanding issued to non-employees, the expense for which is determined each reporting period at the measurement date. The expense is recognized over the vesting period of the award.

The following table summarizes stock-based compensation expense for the three months ended March 31, 2020 and 2019 (in thousands).

 

 

Employee Stock Purchase Plan

 

Eligible employees can purchase the Company’s Common Stock at the end of a predetermined offering period at 85% of the lower of the fair market value at the beginning or end of the offering period.  The Employee Stock Purchase Plan (“ESPP”) is compensatory and results in stock-based compensation expense.

 

For the three months ended March 31, 2020, 68,351 shares have been purchased and 341,649 shares are available for future sale under the Company’s ESPP.  The Company recognized share-based compensation expense of $0.2 million for the three months ended March 31, 2020.

 

Warrants

A summary of warrant activities for three months ended March 31, 2020 is presented below:

 

 

Upon the cashless  exercise of warrants, the Company will issue new shares of common stock.