Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Note 10. Subsequent Events

On March 30, 2018 the Company filed a prospectus supplement to register the sale of up to $50 million of shares of common stock under the New ATM. We have raised an approximate $0.9 million under this prospectus supplement from July 2, 2018 to the date of this Form 10-Q filing.


On August 8, 2018, the Company entered into employment agreements with each of Messrs. Grae, Mushakov and Goldman. The employment agreements provide for an initial annual base salary of $459,268, $286,443 and $265,000 for each of Messrs. Grae, Mushakov and Goldman, respectively, and establish a target annual bonus of 50% of base salary for each executive with the amount of any such bonus to be determined by the Compensation Committee of the Board based on the achievement of performance goals that are established by the Compensation Committee. In addition, each of Messrs. Grae, Mushakov and Goldman will be eligible to earn an annual long-term incentive award, subject to the Compensation Committee’s discretion to grant such awards, based upon a target award opportunity equal to 50% of base salary, and subject to attainment of such goals, criteria or targets established by the Compensation Committee in respect of each such calendar year. Each employment agreement provides that if the executive’s employment is terminated or not extended by the Company without “cause,” or terminated by the executive for “good reason” (each as defined in the employment agreement), then, subject to the terms and conditions of the employment agreement, the executive will be entitled to certain severance payments and benefits.


Each employment agreement has an initial five-year term and will automatically be extended for one additional year terms upon the expiration of the initial term unless either party provides notice of non-renewal to the other. In the case of Mr. Goldman, the term of his employment agreement as Chief Financial Officer commences September 1, 2018. Ms. Zwobota, the current Chief Financial Officer gave her notice of retirement on August 8, 2018 and her retirement date is September 1, 2018 and will continue working for the company as a part-time consultant. The employment agreements provide standard benefits and contain routine confidentiality, non-competition, non-solicitation and non-disparagement provisions.


Long-Term Non-Qualified Option Grants


On August 6, 2018 the Compensation Committee of the Board of Directors granted performance-based long-term non-qualified stock options relating to approximately 1.8 million shares to employees, consultants and directors of the Company. These stock options have a strike price equal to the closing price of the Company’s stock on August 8, 2018 ($0.90). Out of this total, approximately 1.6 million stock options were issued to employees and consultants as performance-based options. These performance-based stock options vest straight line over a 3-year period with accelerated vesting of these options issued occurring upon applicable performance conditions being satisfied by certain milestone dates. Accelerated vesting of these option grants would occur upon achievement of one or both of the following performance-based milestones:


  1. The Company’s closing stock price is above $3 per share for 10 consecutive trading days by December 31, 2019.
  2. The Company secures at least a $5 million of funding from the Department of Energy by June 30, 2019.


The remaining approximate 0.2 million stock options were issued to the directors of the Company and vest over a one-year period on the anniversary date of the grant. All options granted have a 10-year contractual term.