Quarterly report pursuant to Section 13 or 15(d)

Shareholders' Equity

Shareholders' Equity

9 Months Ended

Sep. 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 September 30, 2017, 19,078,675 shares of common stock have been repurchased for $48,568 under the program and have been retired, including the repurchase of 680,801 shares for $1,682 and 1,578,675 shares for $3,878 during the three and nine months ended September 30, 2017, respectively. As of September 30, 2017, 8,421,325 shares remained available for purchase under the program.

Stock Compensation Plans

As of September 30, 2017, there was $2,169 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 1.38 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.

Options were exercised to purchase 2,167,396 and 3,908,393 shares of the Company’s common stock during the three and nine months ended September 30, 2017, respectively, for which the intrinsic value on dates of exercise was $864 and $1,423.

Restricted stock granted during the nine months ended September 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 nine months ended September 30, 2017, 5,000 shares of restricted stock were forfeited.

As of September 30, 2017, there was $6,520 of unrecognized compensation cost for stock-based compensation related to restricted stock grants, of which $3,356 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 2.48 years for all grants and approximately 3.09 years for the 2017 grants.

Stock-based compensation, including options and restricted stock, attributed to employees was $1,324 and $4,108 for the three and nine months ended September 30, 2017.

Stock-based compensation for consultants and independent financial advisors was $17 and $40 for the three and nine months ended September 30, 2017. In the three and nine months ended September 30, 2017, 1,787,686 and 1,953,264 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. On May 22, 2017, the Company designated an additional 6,554,916 shares of Series A Preferred Stock.

During the three and nine months ended September 30, 2017, the Company sold 353,653 and 751,912 shares of Series A Preferred Stock, respectively, pursuant to the Company's “at the market” offering programs, which provided total gross proceeds to the Company of $8,825 and $18,736, before deducting the commission paid to unaffiliated sales agents and offering expenses aggregating $276 and $706, respectively. During the fourth quarter of 2017, through November 1, 2017, the Company sold an additional 415,247 shares of Series A Preferred Stock, which provided total gross proceeds of $10,317 before deducting selling expenses of $206.

For the three and nine months ended September 30, 2017, the Company paid dividends of $8,149 and $24,026, respectively, on its outstanding Series A Preferred Stock based on a monthly dividend of approximately $0.1667 per share. In September 2017, the Company began a quarterly cash dividend on its common stock. During the three months ended September 30, 2017, the Company initiated payment of a quarterly dividend of of $0.01 per share on its outstanding common stock. The Company paid dividends of $1,962 on its common stock during the period.