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Note 6. Stockholders' Equity
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9 Months Ended |
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Dec. 31, 2011
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| Stockholders' Equity Note Disclosure [Text Block] |
Note 6.
Stockholders’ Equity
Common
Stock Issued in Registered Direct Offering
On
December 22, 2011, the Company entered into agreements with
institutional and accredited investors to issue 1,809,653
shares of its common stock at $1.15 per share, yielding gross
proceeds of $2,081,000 and net proceeds of $1,894,000 after
deducting placement agent commissions of $145,000 and other
offering costs of $42,000. The offering closed on December
28, 2011.
Common
Stock Issued to Service Providers
On
April 24, 2009, the Company entered into an agreement with
Advocos LLC, a contract sales organization that provides
sales services for the Company and manages an outsourced part
of the Company’s sales force for the sale of wound care
products in the United States. Pursuant to the agreement, the
Company agreed to pay Advocos LLC a monthly fee and potential
bonuses that will be based on achievement of certain levels
of sales. Additionally, the Company agreed to issue Advocos
LLC shares of common stock as compensation for its services.
The Company has determined that the fair value of the common
stock was more readily determinable than the fair value of
the services rendered. Accordingly, the Company recorded the
fair market value of the stock as compensation expense.
During the three months ended December 31, 2011 and 2010, the
Company issued 49,670 and 12,396 shares of common stock,
respectively, in connection with this
agreement. During the nine months ended December
31, 2011 and 2010, the Company issued 99,257 and 33,087
shares of common stock, respectively, in connection with this
agreement. During the three months ended December 31, 2011
and 2010, the Company recorded $76,000 and $20,000 of stock
compensation expense related to this agreement, respectively.
During the nine months ended December 31, 2011 and 2010, the
Company recorded $168,000 and $61,000 of stock compensation
expense related to this agreement, respectively. The expense
was recorded as selling, general and administrative expense
in the accompanying condensed consolidated statements of
operations.
On
December 17, 2009, the Company entered into an agreement with
Windsor Corporation. Windsor Corporation provides financial
advisory services to the Company. Pursuant to the agreement,
the Company agreed to pay Windsor Corporation, on a quarterly
basis, common stock as compensation for services provided.
The Company determined that the fair value of the common
stock was more readily determinable than the fair value of
the services rendered. Accordingly, the Company recorded the
fair market value of the stock as compensation expense.
During the three months ended December 31, 2011, the Company
issued 26,950 shares of common stock and recorded $41,000 of
stock compensation expense related to this
agreement. During the nine months ended December
31, 2011 and 2010, the Company issued 83,146 and 37,842
shares of common stock, respectively, in connection with this
agreement. During the nine months ended December 31, 2011 and
2010, the Company recorded $135,000 and $71,000 of stock
compensation expense related to this agreement, respectively.
The expense was recorded as selling, general and
administrative expense in the accompanying condensed
consolidated statements of operations.
On
September 9, 2010, the Company entered into an agreement with
Vista Partners LLC, for providing financial advisory
services. Pursuant to the agreement, the Company agreed to
pay Vista Partners, LLC common stock as compensation for
services provided. The Company determined that the
fair value of the common stock was more readily determinable
than the fair value of the services rendered. Accordingly,
the Company recorded the fair market value of the stock as
compensation expense. During the three months ended December
31, 2011, the Company issued 30,000 shares of common stock
and recorded $45,000 of stock compensation expense related to
this agreement. During the nine months ended
December 31, 2011 and 2010, the Company issued 85,000 and
55,000 shares of common stock, respectively, in connection
with this agreement. During the nine months ended
December 31, 2011 and 2010, the Company recorded $151,000 and
$90,000, respectively, of stock compensation expense related
to this agreement. The expense was recorded as selling,
general and administrative expense in the accompanying
condensed consolidated statements of operations.
On
April 1, 2011, the Company entered into an agreement with
NetGain Financial, Inc., for providing financial advisory
services. Pursuant to the agreement, the Company agreed to
pay NetGain Financial, Inc. common stock as compensation for
services provided. The Company determined that the
fair value of the common stock was more readily determinable
than the fair value of the services rendered. Accordingly,
the Company recorded the fair market value of the stock as
compensation expense. During the three and nine months ended
December 31, 2011, the Company issued 15,000 and 75,000
shares of common stock, respectively, in connection with this
agreement. During the three months and nine months
ended December 31, 2011, the Company recorded $23,000 and
$133,000, respectively, of stock compensation expense related
to this agreement. The expense was recorded as selling,
general and administrative expense in the accompanying
condensed consolidated statements of operations.
Common
Stock Purchase Warrants Issued to Service Provider
On
November 10, 2011, the Company issued warrants to purchase
45,000 shares of common stock to Advocos LLC, in exchange for
services. The warrants vest in
two tranches. The first tranche of 30,000 was
fully exercisable at date of issuance and the second tranche
of 15,000 vests on March 24, 2012. The warrants
expire on August 1, 2016. The warrants have an exercise price
of $1.44 per share and were valued using the Black-Scholes
pricing model. Assumptions used were as follows: fair value
of the underlying stock of $1.44; risk-free interest rate of
0.92%; contractual life of 4.73 years; dividend yield of
0%; and a volatility of 83%. The fair value of the warrants
amounted to $31,000 and was recorded as selling, general and
administrative expense in the accompanying condensed
consolidated statement of operations for the three and nine
months ended December 31, 2011.
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