Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

Stockholders' Equity
6 Months Ended
Jun. 30, 2017
Equity [Abstract]  
Stockholders' Equity

Note 8 – Stockholders’ Equity


Preferred Stock


During the six months ended June 30, 2017, 7,785 shares of Series H Preferred Stock were converted into 5,556,697 shares of common stock in accordance with the terms of the Series H Preferred Stock. Also during the six months ended June 30, 2017, 2,174 shares of Series H Preferred Stock were exchanged for Exchange Debentures with an aggregate principal amount of $2.2 million and warrants (see Note 5).


Common Stock


On January 17, 2017, 2,778 shares of common stock were issued to an employee.


On February 22, 2017, the Reverse Stock Split became effective (see Note 1). The Reverse Stock Split resulted in the issuance of 7,897 shares of common stock due to the rounding up of fractional shares.


On March 13, 2017, the Company issued 400,000 shares of common stock in settlement of $0.4 million of outstanding notes and warrants (see Note 4).


On March 15, 2017, the Company agreed to issue 29,518 shares of common stock to a holder of a like number of warrants to purchase the Company’s common stock in exchange for the warrants valued at $57,855.


During the six months ended June 30, 2017, Exchange Debentures with a principal amount of $2.7 million were converted into 4,611,092 shares of common stock (see Note 5).


Stock Options


The Company currently maintains and sponsors the Tegal Corporation 2007 Incentive Award Plan (the “2007 Equity Plan”). Tegal Corporation is the predecessor entity to the Company. The 2007 Equity Plan, as amended, provides for the issuance of stock options and other equity awards to the Company’s officers, directors, employees and consultants. During the six months ended June 30, 2017 and 2016, the Company recognized stock-based compensation in the amount of $69,230 and $0.4 million, respectively, for the vesting of outstanding stock options. The following table summarizes the Company’s stock option activity for the six months ended June 30, 2017:


      Number of options     Weighted-average exercise price     Weighted-average contractual term  
Outstanding at December 31, 2016       709,025     $ 129.43       8.93  
Granted       -       -          
Expired       -       -          
Forfeit       (127,858 )     -          
Exercised       -       -          
Outstanding at June 30, 2017       581,167     $ 137.37       8.43  
Exercisable at June 30, 2017       477,167     $ 147.56          


As of June 30, 2017, the Company had approximately $0.3 million of unrecognized compensation cost related to stock options granted under the Company’s 2007 Equity Plan, which is expected to be recognized over a weighted-average period of 1.12 years.




The Company, as part of various debt and equity financing transactions, has issued warrants to purchase shares of the Company’s common stock. The following summarizes the information related to warrants issued and the activity during the six months ended June 30, 2017:


    Number of warrants     Weighted average exercise price  
Balance at December 31, 2016     1,407,647     $ 11.70  
Warrants issued during the period     30,784,193     $ 0.39  
Warrants exchanged for other securities     (96,185 )   $ 12.46  
Warrants exercised during the period     -     $ -  
Warrants expired during the period     -     $ -  
Balance at June 30, 2017     32,095,655     $ 0.85  


Basic and Diluted Loss per Share


Basic loss per share excludes dilution and is computed by dividing loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. For the six months ended June 30, 2017 and 2016, basic loss per share is the same as diluted loss per share.


Diluted loss per share excludes all dilutive potential shares if their effect is anti-dilutive. As of June 30, 2017 and 2016, the following potential common stock equivalents were excluded from the calculation of diluted loss per share as their effect was anti-dilutive:


    As of June 30,  
    2017     2016  
Warrants     32,095,655       227,819  
Convertible preferred stock     153,845       398,268  
Convertible debt     11,748,613       230,521  
Stock options     581,167       574,789  
      44,579,280       1,431,397