zixi-10q_20200331.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 0-17995

 

ZIX CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

 

Texas

 

75-2216818

(State of Incorporation)

 

(I.R.S. Employer Identification Number)

 

2711 North Haskell Avenue

Suite 2200, LB 36

Dallas, Texas 75204-2960

(Address of Principal Executive Offices)

(214) 370-2000

(Registrant’s Telephone Number, Including Area Code)

 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit  such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

 

 

 

Non-accelerated filer

 

  

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act            

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

Class

 

Outstanding at May 5, 2020

Common Stock, par value $0.01 per share

 

56,925,946

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of Each Class

 

Trading Symbols(s)

 

Name of Exchange on Which Registered

Common Stock, par value $0.01 per share

 

ZIXI

 

NASDAQ Global Market

 


 


 

INDEX

 

 

 

 

 

Page

Number

PART I — FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements (Unaudited)

 

 

 

 

Condensed Consolidated Balance Sheets at March 31, 2020 (unaudited) and December 31, 2019

 

3

 

 

Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the three months ended March 31, 2020  and 2019

 

4

 

 

Condensed Consolidated Statement of Stockholders’ Equity (unaudited) for the three months ended March 31, 2020 and 2019

 

5

 

 

Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2020 and 20119

 

7

 

 

Notes to Condensed Consolidated Financial Statements

 

8

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

22

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

29

Item 4.

 

Controls and Procedures

 

29

PART II — OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings

 

30

Item 1A.

 

Risk Factors

 

30

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

30

Item 3.

 

Defaults Upon Senior Securities

 

30

Item 4.

 

Mine Safety Disclosures

 

31

Item 5.

 

Other Information

 

31

Item 6.

 

Exhibits

 

32

 

2


 

ZIX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In thousands, except share and par value data)

 

March 31,

2020

 

 

December 31,

2019

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

16,295

 

 

$

13,349

 

Receivables, net

 

 

13,037

 

 

 

10,081

 

Prepaid and other current assets

 

 

4,796

 

 

 

4,984

 

Total current assets

 

 

34,128

 

 

 

28,414

 

Property and equipment, net

 

 

8,368

 

 

 

8,591

 

Operating lease assets

 

 

9,709

 

 

 

10,128

 

Intangible assets, net

 

 

142,993

 

 

 

145,876

 

Goodwill

 

 

170,377

 

 

 

171,209

 

Deferred tax assets

 

 

37,423

 

 

 

36,535

 

Deferred costs and other assets

 

 

12,302

 

 

 

11,968

 

Total assets

 

$

415,300

 

 

$

412,721

 

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

14,954

 

 

$

14,400

 

Accrued expenses

 

 

11,164

 

 

 

13,732

 

Deferred revenue

 

 

42,417

 

 

 

40,757

 

Current portion of long-term debt

 

 

1,850

 

 

 

1,850

 

Operating lease liabilities, current

 

 

2,690

 

 

 

2,947

 

Finance lease liabilities, current

 

 

1,134

 

 

 

1,338

 

Total current liabilities

 

 

74,209

 

 

 

75,024

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Deferred revenue

 

 

1,994

 

 

 

2,524

 

Noncurrent operating lease liabilities

 

 

8,197

 

 

 

8,389

 

Noncurrent finance lease liabilities

 

 

515

 

 

 

716

 

Long-term debt

 

 

184,107

 

 

 

178,250

 

Total long-term liabilities

 

 

194,813

 

 

 

189,879

 

Total liabilities

 

 

269,022

 

 

 

264,903

 

Commitments and contingencies (see Note 11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock:

 

 

 

 

 

 

 

 

Series A convertible preferred stock, $1 par value; 100,206 shares designated, issued and

   outstanding in 2020 and in 2019

 

 

108,756

 

 

 

106,527

 

Total preferred stock

 

 

108,756

 

 

 

106,527

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $1 par value, 10,000,000 shares authorized; none issued and outstanding

 

 

 

 

 

 

Common stock, $0.01 par value, 175,000,000 shares authorized; 84,953,964

   issued and 56,962,705 outstanding in 2020 and 83,393,514 issued and

   55,640,397 outstanding in 2019

 

 

781

 

 

 

780

 

Additional paid-in capital

 

 

393,710

 

 

 

391,605

 

Treasury stock, at cost; 27,991,259 common shares in 2020 and 27,753,117

   common shares in 2019

 

 

(112,083

)

 

 

(110,298

)

Accumulated deficit

 

 

(244,180

)

 

 

(240,995

)

Accumulated other comprehensive income (loss)

 

 

(706

)

 

 

199

 

Total stockholders’ equity

 

 

37,522

 

 

 

41,291

 

Total liabilities, preferred stock and stockholders’ equity

 

$

415,300

 

 

$

412,721

 

 

See notes to condensed consolidated financial statements.

3


 

ZIX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

 

 

 

Three Months Ended March 31,

 

(In thousands, except share and per share data)

 

2020

 

 

2019

 

Revenue

 

$

52,434

 

 

$

29,300

 

Cost of revenue

 

 

26,079

 

 

 

11,139

 

Gross margin

 

 

26,355

 

 

 

18,161

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

5,386

 

 

 

4,147

 

Selling, general and administrative

 

 

20,029

 

 

 

20,264

 

Total operating expenses

 

 

25,415

 

 

 

24,411

 

Operating income (loss)

 

 

940

 

 

 

(6,250

)

Other income (expense):

 

 

 

 

 

 

 

 

Investment and other income (expense)

 

 

(15

)

 

 

92

 

Interest expense

 

 

(2,648

)

 

 

(1,255

)

Total other (expense) income

 

 

(2,663

)

 

 

(1,163

)

Loss before income taxes

 

 

(1,723

)

 

 

(7,413

)

Income tax benefit

 

 

870

 

 

 

1,148

 

Net loss

 

$

(853

)

 

$

(6,265

)

 

 

 

 

 

 

 

 

 

Deemed and accrued dividends on preferred stock

 

 

2,229

 

 

 

2,433

 

Net loss attributable to common stockholders

 

$

(3,082

)

 

$

(8,698

)

 

 

 

 

 

 

 

 

 

Basic loss per share attributable to common stockholders

 

$

(0.06

)

 

$

(0.17

)

Diluted loss per common share attributable to common stockholders

 

$

(0.06

)

 

$

(0.17

)

Basic weighted average common shares outstanding

 

 

53,496,042

 

 

 

52,713,576

 

Diluted weighted average common shares outstanding

 

 

53,496,042

 

 

 

52,713,576

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(905

)

 

 

(32

)

Comprehensive loss

 

$

(1,758

)

 

$

(6,297

)

 

See notes to condensed consolidated financial statements

4


 

ZIX CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Unaudited)

 

 

 

Preferred Stock and Stockholders’ Equity

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 

 

 

 

 

Accumulated

Other

 

 

Total

 

(In thousands, except shares)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-In

Capital

 

 

Treasury

Stock

 

 

Accumulated

Deficit

 

 

Comprehensive

Income (Loss)

 

 

Stockholders’

Equity

 

Balances, December 31,

   2019, as reported

 

 

100,206

 

 

$

106,257

 

 

 

83,393,514

 

 

$

780

 

 

$

391,605

 

 

$

(110,298

)

 

$

(240,995

)

 

$

199

 

 

$

41,291

 

Cumulative effect adjustment

   from changes in accounting

   standard (Note 2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(103

)

 

 

 

 

 

(103

)

Balance, January 01, 2020

 

 

100,206

 

 

 

106,257

 

 

 

83,393,514

 

 

 

780

 

 

 

391,605

 

 

 

(110,298

)

 

 

(241,098

)

 

 

199

 

 

 

41,188

 

Accretion of beneficial

   conversion feature of

   Series A Preferred

   Shares (Participating)

 

 

 

 

 

48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(48

)

 

 

 

 

 

(48

)

Accrued dividend on

   Series A preferred stock

 

 

 

 

 

2,181

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,181

)

 

 

 

 

 

(2,181

)

Net issuance of common

   stock upon exercise of

   stock options

 

 

 

 

 

 

 

 

46,875

 

 

 

1

 

 

 

116

 

 

 

 

 

 

 

 

 

 

 

 

117

 

Net issuance of common

   stock upon vesting of

   restricted stock units

 

 

 

 

 

 

 

 

30,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net issuance of common

   stock upon vesting of

   performance stock units

 

 

 

 

 

 

 

 

16,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net issuance of restricted

   common stock

 

 

 

 

 

 

 

 

1,062,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net issuance of restricted

   performance common

   stock

 

 

 

 

 

 

 

 

404,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee stock-based

   compensation costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,989

 

 

 

(1,785

)

 

 

 

 

 

 

 

 

204

 

Adjustment from foreign

   currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(905

)

 

 

(905

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(853

)

 

 

 

 

 

(853

)

Balances, March 31, 2020

 

 

100,206

 

 

$

108,486

 

 

 

84,954,264

 

 

$

781

 

 

$

393,710

 

 

$

(112,083

)

 

$

(244,180

)

 

$

(706

)

 

$

37,522

 

 

See notes to condensed consolidated financial statements.

5


 

ZIX CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Unaudited)

Continued

 

 

 

Preferred Stock and Stockholders’ Equity

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 

 

 

 

 

Accumulated

Other

 

 

Total

 

(In thousands, except shares)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-In

Capital

 

 

Treasury

Stock

 

 

Accumulated

Deficit

 

 

Comprehensive

Income (Loss)

 

 

Stockholders’

Equity

 

Balances, December 31,

   2018, as reported

 

 

 

 

$

 

 

 

81,715,330

 

 

$

779

 

 

$

384,940

 

 

$

(108,392

)

 

$

(216,364

)

 

$

(16

)

 

$

60,947

 

Issuance of Series A

   preferred stock in

   connection with private

   placement, net of

   issuance costs of $2,253

 

 

64,914

 

 

 

62,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series B

   preferred stock in

   connection with private

   placement, net of

   issuance costs of $1,204

 

 

35,086

 

 

 

33,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beneficial conversion

   feature of Series A

   preferred stock

 

 

 

 

 

1,407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,407

)

 

 

 

 

 

(1,407

)

Accretion of beneficial

   conversion feature of

   Series A Preferred

   Shares (Participating)

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

(12

)

Accrued dividend on

   Series A preferred stock

 

 

 

 

 

563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(563

)

 

 

 

 

 

(563

)

Accrued dividend on

   Series B preferred stock

 

 

 

 

 

380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(380

)

 

 

 

 

 

(380

)

Redemption Accretion of

   Series B preferred stock

 

 

 

 

 

71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(71

)

 

 

 

 

 

(71

)

Net issuance of common

   stock upon exercise of

   stock options

 

 

 

 

 

 

 

 

17,438

 

 

 

 

 

 

36

 

 

 

 

 

 

 

 

 

 

 

 

36

 

Net issuance of common

   stock upon vesting of

   restricted stock units

 

 

 

 

 

 

 

 

40,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net issuance of common

   stock upon vesting of

   performance stock units

 

 

 

 

 

 

 

 

392,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net issuance of restricted

   common stock

 

 

 

 

 

 

 

 

1,116,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net issuance of restricted

   performance common

   stock

 

 

 

 

 

 

 

 

5,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee stock-based

   compensation costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,229

 

 

 

(1,340

)

 

 

 

 

 

 

 

 

(111

)

Adjustment from foreign

   currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32

)

 

 

(32

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,265

)

 

 

 

 

 

(6,265

)

Balances, March 31, 2019

 

 

100,000

 

 

$

98,976

 

 

 

83,288,103

 

 

$

779

 

 

$

386,205

 

 

$

(109,732

)

 

$

(225,062

)

 

$

(48

)

 

$

52,142

 

 

See notes to condensed consolidated financial statements.

6


 

ZIX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Three Months Ended March 31,

 

(In thousands)

 

2020

 

 

2019

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(853

)

 

$

(6,265

)

Non-cash items in net loss:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,792

 

 

 

2,696

 

Amortization of debt issuance costs

 

 

320

 

 

 

116

 

Employee stock-based compensation costs

 

 

1,991

 

 

 

1,229

 

Noncash lease costs

 

 

782

 

 

 

(4,385

)

Changes in deferred taxes

 

 

(887

)

 

 

(1,103

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Receivables

 

 

(2,947

)

 

 

(113

)

Prepaid and other current assets

 

 

179

 

 

 

(1,004

)

Deferred costs and other assets

 

 

(330

)

 

 

(856

)

Accounts payable

 

 

562

 

 

 

5,989

 

Deferred revenue

 

 

1,135

 

 

 

(212

)

Earn-out payment

 

 

 

 

 

(385

)

Accrued and other liabilities

 

 

(3,337

)

 

 

3,876

 

Net cash provided by (used in) operating activities

 

 

4,407

 

 

 

(417

)

Investing activities:

 

 

 

 

 

 

 

 

Purchases of property, equipment and internal-use software

 

 

(5,007

)

 

 

(1,742

)

Acquisition of business, net of cash acquired

 

 

 

 

 

(271,706

)

Net cash used in investing activities

 

 

(5,007

)

 

 

(273,448

)

Financing activities:

 

 

 

 

 

 

 

 

Proceeds of long-term debt

 

 

6,000

 

 

 

175,000

 

Debt issuance cost

 

 

 

 

 

(6,389

)

Proceeds from issuance of Series A preferred stock, net of offering costs

 

 

 

 

 

62,692

 

Proceeds from issuance of Series B preferred stock, net of offering costs

 

 

 

 

 

33,896

 

Proceeds from exercise of stock options

 

 

117

 

 

 

36

 

Repayment of long-term debt

 

 

(460

)

 

 

 

Repayment of finance lease liabilities

 

 

(406

)

 

 

 

Purchase of treasury shares

 

 

(1,785

)

 

 

(1,340

)

Earn-out payment

 

 

 

 

 

(415

)

Net cash provided by financing activities

 

 

3,466

 

 

 

263,480

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate on cash

 

 

80

 

 

 

(33

)

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

 

2,946

 

 

 

(10,418

)

Cash and cash equivalents, beginning of period

 

 

13,349

 

 

 

27,109

 

Cash and cash equivalents, end of period

 

$

16,295

 

 

$

16,691

 

 

See notes to condensed consolidated financial statements.

7


 

ZIX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

1. Basis of Presentation

The accompanying condensed consolidated financial statements of Zix Corporation (“Zix” the “Company,” “we,” “our” or “us”) should be read in conjunction with the audited consolidated financial statements included in the Company’s 2019 Annual Report on Form 10-K. These financial statements are unaudited, but have been prepared in the ordinary course of business for the purpose of providing information with respect to the covered interim periods.

Management of the Company believes that all adjustments necessary for a fair presentation for such periods have been included and are of a normal recurring nature. The results of operations for the three-month period ended March 31, 2020, are not necessarily indicative of the results to be expected for any future periods or for the full fiscal year. The preparation of financial

statements and related disclosures in accordance with accounting principles generally accepted in the United States requires the Company’s management to make estimates and assumptions that affect reported amounts and disclosures. These estimates and assumptions take into account historical and forward looking factors that the Company believes are reasonable, including but not limited to the potential impacts arising from the recent coronavirus (COVID-19) and public and private sector policies and initiatives aimed at reducing its transmission. As the extent and duration of the impacts of the COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change. Actual results could differ significantly from those estimates.

 

 

2. Recent Accounting Standards and Pronouncements

Credit Losses

On January 1, 2020, we adopted Accounting Standard Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments with a net increase of our receivables allowance and a related cumulative adjustment to our retained earnings recorded at the beginning of adoption. Upon adoption, we changed our impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss impairment model for our accounting receivable balance. The cumulative effect adjustment from adoption was immaterial to our condensed consolidated financial statements.

Intangibles – Goodwill and Other

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04) to simplify the subsequent measurement of goodwill. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The accounting standard became effective for us beginning January 1, 2020, and did not have a material impact on the Company's consolidated financial position, results of operations or cash flows.

Income Taxes

In December 2019, the FASB issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, and early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements.

 

 

3. Stock- Based Awards and Stock-Based Employee Compensation Expense

Our stock-based awards include (i) stock options, (ii) restricted stock awards, some of which are subject to time-based vesting (“Restricted Stock”) and some of which are subject to performance-based vesting (“Performance Stock”), and (iii) restricted stock units, some of which are subject to time-based vesting (“RSUs”) and some of which are subject to performance-based vesting (“Performance RSUs”). As of March 31, 2020, the Company had 809,510 stock options outstanding, 2,354,445 non-vested Restricted Stock awards; 723,517 non-vested Performance Stock awards; 238,643 non-vested RSUs; 77,197 non-vested Performance RSUs and 2,381,311 shares of common stock available for grant future award grants.

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Stock Option Activity   

The following is a summary of all stock option transactions during the three months ended March 31, 2020:

 

 

 

Options

 

 

Weighted

Average

Exercise Price

 

 

Weighted Average

Remaining

Contractual Term

(Yrs)

 

Outstanding at December 31, 2019

 

 

756,385

 

 

$

3.39

 

 

4.46

 

Granted at market price

 

 

100,000

 

 

 

8.03

 

 

 

 

 

Cancelled or expired

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(46,875

)

 

 

2.49

 

 

 

 

 

Outstanding at March 31, 2020

 

 

809,510

 

 

$

4.02

 

 

 

5.03

 

Options exercisable at March 31, 2020

 

 

697,010

 

 

$

3.45

 

 

 

4.30

 

 

At March 31, 2020, 809,510 stock options outstanding and 697,010 stock options exercisable had an exercise price lower than the market price of the Company’s common stock on that date. The aggregate intrinsic value of these stock options were $625 thousand and $621 thousand, respectively.        

Restricted Stock Activity

The following is a summary of Restricted Stock activity during the three months ended March 31, 2020:

 

 

 

Restricted

Shares

 

 

Weighted

Average

Fair Value

 

Non-vested restricted stock at December 31, 2019

 

 

1,912,082