Quarterly report pursuant to Section 13 or 15(d)

13. Warrants

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13. Warrants
 3 Months Ended
Mar. 31, 2016
Warrants and Rights Note Disclosure [Abstract]  
Warrants

The Company has warrants outstanding to purchase up to 5,055,000 at each of March 31, 2016 and December 31, 2015, respectively.

 

In connection with the sale of the Company’s Series A Convertible Preferred Stock in May 2014, Chardan Capital Markets LLC (“Chardan”) acted as sole placement agent in consideration for which Chardan received a cash fee of $535,000 and a warrant to purchase up to 300,000 shares of the Company’s common stock. These warrants are exercisable immediately, have an exercise price of $2.00 per share, and have a five-year term.

 

On October 29, 2015, the Company entered into securities purchase agreements with certain accredited investors pursuant to which the Company sold an aggregate of 4,330,000 shares of its common stock, par value $0.001 per share, and warrants to purchase up to an aggregate of 4,330,000 shares of common stock for a purchase price of $1.00 per share and the associated warrants for gross proceeds to the Company of $4,330,000 (the “2015 Private Placement”). The closing of the 2015 Private Placement occurred on November 3, 2015. The warrants are exercisable into shares of common stock for a period of five (5) years from issuance at an initial exercise price of $1.10 per share, subject to adjustment in the event of stock splits, dividends and recapitalizations. The warrants are exercisable immediately. The Company is prohibited from effecting an exercise of the warrants to the extent that as a result of such exercise, the holder would beneficially own more than 4.99% (subject to increase up to 9.99% upon 61 days’ notice) in the aggregate of the issued and outstanding shares of common stock, calculated immediately after giving effect to the issuance of shares of common stock upon exercise of the warrant.

 

In connection with the sale of the Company’s Common Stock in October 2015, Chardan acted as sole placement agent in consideration for which Chardan received a cash fee of $300,000 and a warrant to purchase up to 425,000 shares of the Company’s common stock. These warrants are exercisable immediately, have an exercise price of $1.20 per share, and have a five-year term.

 

The following table summarizes the changes in the Company’s outstanding warrants during the three months ended March 31, 2016:

 

    Warrants Outstanding Number of Shares   Exercise Price per Share   Weighted Average Remaining Contractual Life   Weighted Average Exercise Price per Share   Aggregate Intrinsic Value
Balance at December 31, 2015   5,055,000   $ 1.10-2.00   4.75 years   $            1.16   $ –
Warrants Granted   –     –   –     –     –
Warrants Exercised   –     –   –     –     –
Warrants Expired   –     –   –     –     –
Balance at March 31, 2016   5,055,000   $ 1.10-2.00   4.50 years   $            1.16   $ 908,500
                           
Exercisable December 31, 2015   5,055,000   $ 1.10-2.00   4.75 years   $            1.16   $ –
Exercisable March 31, 2016   5,055,000   $ 1.10-2.00   4.50 years   $            1.16   $ 908,500