Quarterly report pursuant to Section 13 or 15(d)

Shareholders' Equity

Shareholders' Equity

6 Months Ended

Jun. 30, 2017

Shareholders’ Equity

Repurchase Program

In March 2007, the Company’s board of directors authorized the repurchase of up to 2,500,000 shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions, depending on market conditions. In each of October 2011, November 2014 and November 2016, the board approved an amendment to the repurchase program to permit the repurchase of an additional 5,000,000 shares, 10,000,000 shares and 10,000,000 shares, respectively. Since inception through June 30, 2017, 18,397,874 shares of common stock have been repurchased for $46,887 under the program and have been retired, including the repurchase of 782,874 shares for $1,916 and 897,874 shares for $2,196 during the three and six months ended June 30, 2017, respectively. As of June 30, 2017, 9,102,126 shares remained available for purchase under the program.

Stock Compensation Plans

As of June 30, 2017, there was $2,790 of unrecognized compensation cost for stock-based compensation related to options. This cost is expected to be recognized over the vesting periods of the options, which on a weighted-average basis are approximately 1.53 years for all grants.

On May 12, 2017, the Company reached an agreement with an option holder to voluntarily cancel and terminate an option to purchase 3,000,000 shares of the company's common stock at the per share exercise price of $1.91 in exchange for the Company paying the option holder $850,000.

Options were exercised to purchase 1,569,901 and 1,740,997 shares of the Company’s common stock during the three and six months ended June 30, 2017, respectively, for which the intrinsic value on dates of exercise was $453 and $559.

Restricted stock granted during the six months ended June 30, 2017 was as follows:



Grant Date		Final Vesting Date	Shares	Fair Value⁽¹⁾
January 13, 2017	⁽²⁾	January 13, 2021	1,190,000	$	2,844
January 20, 2017	⁽²⁾	January 20, 2021	301,000	$	674
April 3, 2017	⁽³⁾	January 13, 2021	10,000	$	25,000
May 24, 2017	⁽²⁾	May 24, 2021	240,000	$	535,200
June 7, 2017	⁽²⁾	June 7, 2021	30,000	$	67,800
			1,771,000	$	631,518


(1)	Fair value is calculated using the closing price on the grant date.


(2)	Vests in four equal annual installments beginning on the first anniversary of the grant date.


(3)	Vests in four equal installments beginning on January 13, 2018.

During the three and six months ended June 30, 2017, no shares of restricted stock were forfeited.

As of June 30, 2017, there was $7,308 of unrecognized compensation cost for stock-based compensation related to restricted stock grants, of which $3,658 related to the 2017 grants described above. This cost is expected to be recognized over the vesting periods of the restricted stock, which on a weighted-average basis are approximately 2.70 years for all grants and approximately 3.33 years for the 2017 grants.

Stock-based compensation, including options and restricted stock, attributed to employees was $1,366 and $2,784 for the three and six months ended June 30, 2017.

Stock-based compensation for consultants and independent financial advisors was $12 and $23 for the three and six months ended June 30, 2017. In the three and six months ended June 30, 2017, 25,351 and 165,578 shares, respectively, were surrendered to cover payment of exercise prices and taxes.

Capital Stock

On May 18, 2016, the Company's shareholders approved an amendment to the Company's Articles of Incorporation to increase the number of shares of preferred stock authorized from 25,000,000 to 50,000,000 and to increase the number of shares of common stock authorized from 800,000,000 to 1,000,000,000.

During the three and six months ended June 30, 2017, the Company sold 398,259 shares of Series A Preferred Stock, pursuant to the Company's “at the market” offering programs, which provided total gross proceeds to the Company of $9,911 , before deducting the commission paid to unaffiliated sales agents and offering expenses aggregating $401 and $428, respectively. During July 2017, the Company sold an additional 12,310 shares of Series A Preferred Stock, which provided total gross proceeds of $305 before deducting selling expenses of $6.

On May 22, 2017, the Company designated an additional 6,554,916 Series A Preferred Stock.

For the three and six months ended June 30, 2017, the Company paid dividends of $7,953 and $15,877, respectively, on its outstanding Series A Preferred Stock based on a monthly dividend of approximately $0.1667 per share.