|9 Months Ended|
Sep. 30, 2018
Note 6 - Subsequent Events
On October 18, 2018, the Company and Lincoln Park Capital Fund, LLC (“Lincoln Park”) entered into a purchase agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company has the right to sell to Lincoln Park shares of the Company’s common stock having an aggregate value of up to $32,500,000, subject to certain limitations and conditions set forth in the Purchase Agreement (the “Offering”). As consideration for entering into the Purchase Agreement, the Company issued to Lincoln Park 852,537 shares of common stock.
Pursuant to the Purchase Agreement, Lincoln Park purchased 3,376,554 shares of common stock, at a price of $0.74 per share, for a total gross purchase price of $2,500,000. As often as every business day from and after one business day following the date of the Initial Purchase and over the 30-month term of the Purchase Agreement, and up to an aggregate amount of an additional $30,000,000 (subject to certain limitations) of shares of common stock, the Company has the right, from time to time, at its sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 400,000 shares of common stock, with such amount increasing as the closing sale price of the common stock increases; provided Lincoln Park’s obligation under any single such purchase will not exceed $1,500,000, unless the Company and Lincoln Park mutually agree to increase the maximum amount of such single purchase (each, a “Regular Purchase”). If the Company directs Lincoln Park to purchase the maximum number of shares of common stock it then may sell in a Regular Purchase, then in addition to such Regular Purchase, and subject to certain conditions and limitations in the Purchase Agreement, the Company may direct Lincoln Park in an “accelerated purchase” to purchase an additional amount of common stock that may not exceed the lesser of (i) 300% the number of shares purchased pursuant to the corresponding Regular Purchase or (ii) 30% of the total number of shares of the Company’s common stock traded during a specified period on the applicable purchase date as set forth in the Purchase Agreement. Under certain circumstances and in accordance with the Purchase Agreement, the Company may direct Lincoln Park to purchase shares in multiple accelerated purchases on the same trading day.
The Company controls the timing and amount of any sales of its common stock to Lincoln Park. There is no upper limit on the price per share that Lincoln Park must pay for its common stock under the Purchase Agreement, but in no event will shares be sold to Lincoln Park on a day the closing price is less than the floor price specified in the Purchase Agreement. In all instances, the Company may not sell shares of its common stock to Lincoln Park under the purchase agreement if it would result in Lincoln Park beneficially owning more than 9.99% of its common stock.
The Purchase Agreement does not limit the Company’s ability to raise capital from other sources at the Company’s sole discretion, except that (subject to certain exceptions) the Company may not enter into any variable rate transaction (as defined in the Purchase Agreement, including the issuance of any floating conversion rate or variable priced equity-like securities) during the 30 months after the date of the Purchase Agreement. The Company has the right to terminate the Purchase Agreement at any time, at no cost to the Company.
Through November 8, 2018, the Company elected to sell to Lincoln Park an additional 1,000,000 shares and received $705,000.
In 2012, certain warrants were issued to Mr. Sandesh Seth, Chairman and Chief Executive Officer, “CEO”, of the Company, as part of investment banking and advisory services either prior to and outside of Mr. Seth’s role as a Board Member and subsequently CEO and are not compensation for Board or CEO services to the Company. The Chairman and CEO has refrained from exercising such warrants that are, or have been, in the money for all of their existing life in order to align with the long-term interests of the Company. In order to maintain that alignment, on November 8, 2018, the Company amended the following Warrants to Purchase Common Stock of the Company, originally dated December 17, 2012, issued to Amrosan LLC, Carnegie Hill Partners, and Bioche Asset Management, LCC (entities affiliated with Mr. Seth’s family) in the amount of 375,556, 353,023 and 721,068 warrant shares, respectively (collectively, the “Warrant Amendments”). Pursuant to the terms of the Warrant Amendments the term of the warrants were extended to February 21, 2022.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef