Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

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STOCKHOLDERS' EQUITY
9 Months Ended
Sep. 30, 2017
Equity [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
3.
STOCKHOLDERS’ EQUITY
 
Authorized Share Increase
 
At a special meeting held on September 12, 2017, the Company’s stockholders approved the ratification of the approval of the Certificate of Amendment to our Certificate of Incorporation to increase the number of authorized shares by 40,000,000 to 80,000,000 which was previously approved by the Company’s stockholders at our annual meeting of stockholders held on May 31, 2017.
 
November 2016 Underwritten Offering
 
On November 23, 2016, the Company entered into an Underwriting Agreement with Ladenburg Thalmann & Co. Inc., as representative of the several underwriters named therein, in connection with the Company’s Registration Statement on Form S-1. Pursuant to the Underwriting Agreement, the Company agreed to sell to the Underwriter 800,000 shares of common stock, 68 shares of Series A preferred stock convertible into 4,533,356 shares of common stock, and Series C warrants to purchase 5,333,356 shares of common stock, plus up to an additional 800,000 shares of common stock and Series C warrants to purchase up to an additional 800,000 shares of common stock in the event of the exercise by the Underwriter of its over-allotment option. The public offering price of a share of common stock together with a Series C warrant to purchase one share of common stock was $1.50. The public offering price to purchase one share of Series A preferred stock, each of which is convertible into 66,667 shares of common stock, together with a Series C warrant to purchase 66,667 shares of common stock was $100,000. The preferred stock was non-voting, had no dividend rights (except to the extent dividends were also paid on common stock), liquidation preference, or other preferences over common stock. The Series C warrants have an exercise price of $1.50 per share, and are exercisable for five years from the date of issuance. The net proceeds were allocated to each security based upon the pro-rata values of the underlying common stock and a Black-Scholes valuation of the warrants.
 
The sale of securities pursuant to the Underwriting Agreement, including the entire over-allotment option, closed on November 29, 2016 (the “November 2016 Underwritten Offering”). Gross proceeds were $9.2 million with net proceeds to the Company of approximately $8.3 million.
 
As of December 31, 2016, 17 shares of Series A preferred stock were outstanding. During the nine months ended September 30, 2017, all 17 shares were converted into 1,133,339 shares of common stock.
 
During the nine months ended September 30, 2017, Series C warrants representing 1,975,506 shares of common stock were exercised by the holders, for proceeds of $2,963,259.
 
April 2016 Underwritten Offering
 
On April 15, 2016 the Company entered into an Underwriting Agreement with Ladenburg Thalmann & Co., Inc. in connection with the Company’s Registration Statement on Form S-1. Pursuant to the Underwriting Agreement, the Company agreed to sell to the Underwriter 1,378,364 shares of common stock, Series B prefunded warrants to purchase 1,908,021 shares of common stock and Series A warrants to purchase 3,286,385 shares of common stock, plus up to an additional 492,957 shares of common stock and Series A warrants to purchase up to an additional 492,957 shares of common stock in the event of the exercise by the Underwriter of its over-allotment option. The public offering price of a share of common stock together with a Series A warrant to purchase one share of common stock was $2.13. The public offering price of a Series B pre-funded warrant to purchase one share of common stock together with a Series A warrant to purchase one share of common stock was $2.12. The Series B pre-funded warrants had an exercise price of $0.01 per share, were immediately exercisable and did not expire. The Series A warrants have an exercise price of $3.04 per share, are exercisable for five years from the date of issuance, and are callable by the Company under certain circumstances.
 
On April 20, 2016, the Company closed on the underwritten public offering (the “April 2016 Underwritten Offering”) of 1,871,321 shares of its common stock and Series B pre-funded warrants to purchase 1,908,021 shares of common stock, plus the issuance of Series A warrants to purchase 3,779,342 shares of common stock, reflecting the exercise in full of the Underwriter’s over-allotment option. Prior to September 30, 2016, all of the Series B pre-funded warrants were exercised. The gross proceeds of the offering amounted to approximately $8.0 million with net proceeds to the Company of approximately $7.2 million.
 
Warrant Restructuring
 
On April 13, 2016, the Company entered into an exchange and amendment agreement (the “Warrant Restructuring Agreement”). Pursuant to the Warrant Restructuring Agreement, the Company agreed with the holders of 2015 Series A warrants that upon the consummation of the 2016 Underwritten Offering, the exercise price of the 2015 Series A warrants would be reduced to the public offering price per share of the shares of common stock sold in this offering and that the warrants would be amended such that the exercise price would no longer be subject to adjustment in connection with future equity offerings we may undertake. In consideration of this amendment, the Company agreed to issue to each of those holders a new warrant to purchase an additional number of shares of common stock equal to twice the number of shares of common stock underlying the 2015 Series A Warrants held by them (the “Incremental Series A Warrants”). As a result, the 2015 Series A warrants and the Incremental Series A Warrants have an exercise price equal to $2.13 (the public offering price of the shares of common stock sold in the 2016 Underwritten Offering).
 
2016 Reverse Stock Split and Recapitalization
 
At a special meeting held on February 8, 2016, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to effect a reverse split of the Company’s common stock at a ratio between 1:5 to 1:10 in order to ensure that adequate authorized but unissued shares would be available for anticipated future financings, and to satisfy requirements for the continued listing of the Company’s common stock on the NASDAQ Capital Market. In addition, the proposal approved by the stockholders provided that if the reverse split was effected, the number of shares of common stock that the Company is authorized to issue remained unchanged at 40,000,000. The Company’s stockholders further authorized the board of directors to determine the ratio at which the reverse split would be effected by filing an appropriate amendment to the Company’s certificate of incorporation. The board of directors authorized the ratio of the reverse split and corresponding reduction in authorized shares on February 24, 2016, and effective at the close of business on March 4, 2016, the Company’s certificate of incorporation was amended to effect a 1-for-10 reverse split of the Company’s common stock (the “2016 Reverse Split”). All share and per share numbers included in these consolidated financial statements give effect to the 2016 Reverse Split.
 
See Authorized Share Increase above concerning a special meeting held on September 12, 2017 regarding the increase of authorized shares by 40,000,000 to 80,000,000.
 
Common Stock Warrants
 
The following table summarizes information with regard to outstanding warrants to purchase common stock as of September 30, 2017:
 
 
 
Number of Shares
 
 
 
 
 
 
 
 
Issuable Upon
 
 
 
 
 
 
 
 
Exercise of
 
 
 
 
 
 
 
 
Outstanding
 
Exercise
 
 
 
 
Offering
 
Warrants
 
Price
 
 
Expiration Date
 
November 2016 Public Offering Series C
 
 
4,157,850
 
$
1.50
 
 
November 29, 2021
 
April 2016 Underwritten Registered Series A
 
 
3,626,942
 
$
3.04
 
 
April 20, 2021
 
October 2015 Incremental Series A
 
 
300,006
 
$
2.13
 
 
October 20, 2021
 
October 2015 Private Placement Series A
 
 
86,365
 
$
2.13
 
 
April 1, 2021
 
October 2015 Offering – Placement Agent
 
 
3,750
 
$
28.30
 
 
October 1, 2020
 
August 2014 Public Offering (1)
 
 
504,019
 
$
46.80
 
 
August 20, 2019
 
February 2013 Public Offering (1)
 
 
38,750
 
$
1.50
(2)
 
February 20, 2018
 
February 2013 Public Offering – Placement Agents
 
 
3,854
 
$
125.00
 
 
February 4, 2018
 
November 2012 Private Placement
 
 
5,000
 
$
250.00
 
 
November 2, 2017
 
Total
 
 
8,726,536
 
 
 
 
 
 
 
 
(1)
These warrants have a certain type of cash settlement feature or the exercise price for which the warrant may be exercised is subject to adjustment for “down-rounds” and the warrants have been accounted for as derivative instruments as described in Note 3, with the exception of 9,704 warrants issued in August 2014.
 
(2)
Due to the issuance of common stock at $1.50 per share as part of the November 2016 Underwritten Offering, the remaining outstanding warrants issued as part of the February 2013 Public Offering were adjusted to reflect the revised exercise price of $1.50 each.
 
Reserved Shares
 
The following shares were reserved for future issuance upon exercise of stock options and grants, preferred stock conversions and warrants:
 
 
 
September 30,
 
December 31,
 
 
 
2017
 
2016
 
 
 
 
 
 
 
Warrants
 
 
8,726,536
 
 
10,716,952
 
Preferred stock
 
 
 
 
1,133,339
 
Stock options and grants
 
 
934,562
 
 
471,433
 
Total number of shares reserved for future issuance
 
 
9,661,098
 
 
12,321,724