Note 10 – Subsequent Events

On February 11, 2015, the Company completed an underwritten offering of 4,444,444 shares of its common stock and warrants to purchase an aggregate of 3,333,333 shares of its common stock at a price to the public of $4.50 per share. The warrants will be exercisable for a period of 4 years at an exercise price of $6.50 per share. The Company received net proceeds of approximately $18.5 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and excluding the underwriters’ over-allotment option. In addition, the Company granted the underwriters a 30-day option to purchase up to an additional 666,666 shares of common stock and warrants to purchase 499,999 shares of common stock solely to cover over-allotments, if any. The underwriter did not exercise the over-allotment option.

On February 18, 2015, the Company granted employees and its board members 456,000 options to purchase the Company’s common stock with exercise price of $3.58 and a term of 10 years with vesting over a 4-year period.  The options have an aggregated fair value of $1.0 million that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.66% (2) expected life of 6 years, (3) expected volatility of 82.47%, and (4) zero expected dividends.

Subsequent to December 31, 2014, the Company issued 891,131 common shares to for cashless exercise of warrants, issued 164,662 shares to consultants in connection with various consulting agreements and issued 10,000 shares to an employee pursuant to an employee agreement.