SUBSEQUENT EVENT |
9 Months Ended | |
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Sep. 30, 2015 | ||
| Subsequent Events [Abstract] | ||
| Subsequent Events [Text Block] |
10. SUBSEQUENT EVENT
On October 1, 2015, the Company completed a registered direct offering of 1,017,272 shares of our common stock and Series B pre-funded warrants to purchase an aggregate of 482,728 shares of our common stock at an offering price of $2.20 per share (collectively, the “Registered Offering”).
In a concurrent private placement (the “Private Placement” and, together with the Registered Offering, the “Offerings”), the Company issued a Series A warrant (the “Series A Warrants” and, together with the Shares and the Pre-Funded Warrants , the “Securities”) to purchase one share of our common stock for each share of common stock purchased or pre-funded in the Registered Offering. The Series A Warrants cover, in the aggregate, 1,500,000 shares of common stock and become exercisable six months following the date of issuance at an exercise price of $2.83 per share and expire five years from the date they become exercisable. The Offerings resulted in gross proceeds of $3,300,000 and net proceeds of approximately $2,868,000 after deducting transaction costs. Additionally, the placement agent received a warrant to purchase up to 37,500 shares of our common stock at $2.83 per share, the fair value of which was approximately $61,000 at issuance and had no effect on stockholders’ equity.
Pursuant to the terms of the Offerings, the Company has agreed that during the 90-day period following the closing, the Company will not issue (or enter into any agreement to issue) any shares of common stock or common stock equivalents, subject to certain exceptions including securities issuable pursuant to the Offerings or pursuant to exercises, exchanges or conversions of the Company’s outstanding securities and issuances as a result of acquisitions or strategic transactions. In addition, the Company has agreed to hold a special meeting of stockholders for the purpose of obtaining approval from its stockholders as may be required by the applicable rules and regulations of the Nasdaq Stock Market, including certain adjustments to the exercise price of the Pre-Funded Warrants, which is scheduled for November 30, 2015. If the Company is unable to obtain the stockholder approval at that meeting, it will be required to call a meeting every 90 days to continue seeking the stockholder approval until obtained or until no Series B pre-funded warrants are outstanding.
Under the terms of the Pre-Funded Warrants, from and after the time the stockholder approval has been obtained, if the Company issues shares of common stock or common stock equivalents at a purchase price (a “Dilutive Price”) less than the then-effective warrant share purchase price for the Pre-Funded Warrants, which is initially $2.20 per share, the number of shares of Common Stock issuable upon the exercise of the Pre-Funded Warrants will be increased to equal (i) the product of the then-effective warrant share purchase price multiplied by the number of shares of Common Stock for which the Pre-Funded Warrants may be exercised, divided by (ii) the Dilutive Price. Following any such adjustment, the warrant share purchase price shall be adjusted to equal the Dilutive Price. Similarly, from and after the time the stockholder approval has been obtained until the Company completes an equity financing with gross proceeds of at least $10.0 million, if the Company issues shares of common stock or common stock equivalents for a purchase price less than the then-effective exercise price for the Series A Warrants, the exercise price of the Series A Warrants will be lowered to equal that lower price.
In connection with the entry into the purchase agreement, the Company and the purchasers entered into a registration rights agreement (the “Registration Rights Agreement”), which requires the Company to file a registration statement on Form S-3 by November 30, 2015 to provide for the resale of the shares of Common Stock issuable upon the exercise of the Series A Warrants. The Company will also be required to file one or more registration statements from time to time to register the issuance or resale of any additional shares of Common Stock that may become issuable as a result of the Offerings. The Company will be obligated to use its commercially reasonable efforts to keep any registration statement effective until the earlier of (i) the date on which the shares of Common Stock subject to the registration statement may be sold without registration pursuant to Rule 144 under the Securities Act, or (ii) the date on which all of the shares of Common Stock subject to the registration statement have been sold under the registration statement or pursuant to Rule 144 under the Securities Act or any other rule of similar effect.
Due to the issuance of common stock at $2.20 per share as part of this Registered Offering, the remaining outstanding warrants issued as part of the February 2013 Public Offering (see Note 3) will be adjusted to reflect the revised exercise price of $2.20 each.
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