| 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
$0.001 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 2,653,199 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 Fund, LLC, 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 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 6,086,207 shares of our common stock. During
the first quarter of 2016, we sold a total of 6,086,207 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. As a result, no shares remain available
for sale to Aspire under this 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 1,454,003 shares
of common stock at the purchase price of $1.15 per share and pre-funded warrants to purchase 3,610,997 shares of common stock
(the “Pre-Funded Warrants”) at a purchase price of $1.14 per share for net proceeds of $5.2 million after deducting
$577,790 of offering expenses (the “2015 Offering”). Each Pre-Funded Warrant is exercisable for $0.01 per share and
all of these warrants had been exercised as of December 31, 2015. Outstanding
Warrants As
of March 31, 2016, warrants to purchase 6,033,426 shares of common stock were outstanding including:
Outstanding Warrants
to Purchase Shares Exercise Price Expiration
Date
2011 private placement 4,252,050 $ 1.25 -
1.60 June
23, 2016
Acueity warrants 325,000 5.00 September
30, 2017
2014 public offering 1,166,849 3.00 January
29, 2019
Placement agent fees for Company’s offerings 242,027 2.12 – 12.43 March - November,
2018
Outside consulting 47,500 $ 4.24 January
14, 2018
6,033,426 |
