| STOCKHOLDERS' EQUITY | NOTE
9: STOCKHOLDERS’ EQUITY The
Company is authorized to issue a total of 85,000,000 shares of stock consisting of 75,000,000 shares of Common Stock, par value
$0.015 per share, and 10,000,000 shares of Preferred Stock, par value $0.001 per share. The Company has designated 750,000 shares
of Series A Junior Participating Preferred Stock, par value $0.001 per share through the filing of certificate of designation
with the Delaware Secretary of State. On
May 19, 2014, the Company adopted a stockholder rights agreement which provides that all stockholders of record on May 26, 2014
received a non-taxable distribution of one preferred stock purchase right for each share of the Company’s common stock held
by such stockholder. Each right is attached to and trades with the associated share of common stock. The rights will become exercisable
only if one of the following occurs: (1) a person becomes an “Acquiring Person” by acquiring beneficial ownership
of 15% or more of the Company’s common stock (or, in the case of a person who beneficially owned 15% or more of the Company’s
common stock on the date the stockholder rights agreement was executed, by acquiring beneficial ownership of additional shares
representing 2.0% of the Company’s common stock then outstanding (excluding compensatory arrangements)), or (2) a person
commences a tender offer that, if consummated, would result in such person becoming an Acquiring Person. If a person becomes an
Acquiring Person, each right will entitle the holder, other than the Acquiring Person and certain related parties, to purchase
a number of shares of the Company’s common stock with a market value that equals twice the exercise price of the right.
The initial exercise price of each right is $15.00, so each holder (other than the Acquiring Person and certain related parties)
exercising a right would be entitled to receive $30.00 worth of the Company’s common stock. If the Company is acquired in
a merger or similar business combination transaction at any time after a person has become an Acquiring Person, each holder of
a right (other than the Acquiring Person and certain related parties) will be entitled to purchase a similar amount of stock of
the acquiring entity. 2015
and 2016 Issuances of Additional Shares to Aspire Capital During
the first quarter of 2015, we sold a total of 176,880 shares of common stock to Aspire Capital Fund, LLC (“Aspire Capital”)
under the stock purchase agreement dated November 8, 2013 with aggregate gross proceeds to us of $4,292,349. No shares remain
available for sale to Aspire Capital under the terms of the November 8, 2013 agreement with them. On
May 26, 2015, we entered into a new common stock purchase agreement with Aspire Capital, which provided that, upon the terms and
subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $25.0
million of shares of our common stock over the 30-month term of the purchase agreement. Concurrently with entering into the purchase
agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration
statements, as permissible and necessary to register under the Securities Act of 1933, registering the sale of the shares of our
common stock that have been and may be issued to Aspire Capital under the purchase agreement. On
November 11, 2015, we terminated the May 26, 2015 agreement with Aspire Capital and entered into a new common stock purchase agreement.
Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital
in which we agreed to register 405,747 shares of our common stock. During
the first quarter of 2016, we sold a total of 405,747 shares of Common Stock to Aspire Capital Fund LLC under the stock purchase
agreement dated November 11, 2015 with aggregate gross proceeds to the Company of $2,153,583. On
May 25, 2016, we terminated the November 11, 2015 stock purchase agreement with Aspire Capital and entered into a new common stock
purchase agreement with Aspire Capital which provided that, upon the terms and subject to the conditions and limitations set forth
therein, Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of our common stock over the 30-month
term of the purchase agreement, subject to the terms and conditions set forth therein. Concurrently with entering into the purchase
agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration
statements, as permissible and necessary to register under the Securities Act of 1933, registering the sale of the shares of our
common stock that have been and may be issued to Aspire Capital under the purchase agreement. As part of the stock purchase agreement
we issued 49,736 common shares as a commitment fee. The value of the common shares issued as a commitment fee of $198,523 have
been reflected as an addition to common stock of $746 and $197,777 in additional paid in capital which will be amortized over
the life of the stock purchase agreement. As of the date of filing this Quarterly Report with the SEC no shares of stock have
been sold to Aspire Capital under the May 25, 2016 purchase agreement. 2015
Offering of Common Stock and Pre-Funded Warrants In
June 2015, the Company entered into a Placement Agent Agreement with Roth Capital Partners, LLC. and Dawson James Securities,
Inc. (the “2015 Placement Agents”), pursuant to which the Company issued and sold an aggregate of 96,934 shares of
common stock at the purchase price of $17.25 per share and pre-funded warrants to purchase 240,733 shares of common stock (the
“Pre-Funded Warrants”) at a purchase price of $17.10 per share for net proceeds of $5.2 million after deducting $577,790
of offering expenses (the “2015 Offering”). Each Pre-Funded Warrant was exercisable for $0.15 per share and all of
these warrants had been exercised as of December 31, 2015. 2016
Public Offering of Common Stock In
August 2016, the Company completed an underwritten public offering of 1,150,000 shares of Common Stock at a price per share of
$2.50, with gross proceeds of $2,875,000 to the Company, or proceeds of $2,645,000 after deducting underwriter discounts, commissions,
non accountable expense allowance and expense reimbursement. Outstanding
Warrants As
of September 30, 2016, warrants to purchase 402,228 shares of common stock were outstanding including:
Outstanding Exercise
Price Expiration
Date
2011 private
placement 283,470 $ 18.75
- 24.00 May 18,
2018
Acueity warrants 21,667 75.00 September 30, 2017
2014 public offering 77,790 45.00 January 29, 2019
Placement agent fees
for Company’s offerings 16,135 31.80 – 186.45 March - November,
2018
Outside
consulting 3,166 $ 63.60 January
14, 2018
402,228 |
