STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

2015 Warrants

In connection with the PIPE Transaction (see Note 4 - PIPE Transaction), the Company issued 1,800,000 Class A Warrants (the “Class A Warrants”) and 1,800,000 Class B Warrants (the “Class B Warrants” and, together with the Class A Warrants, the “2015 Warrants”) which may be exercised to acquire shares of Common Stock. The rights and terms of the Class A Warrants and the Class B Warrants are identical except for the exercise price. Pursuant to an addendum (the “Warrant Addendum”), dated as of March 23, 2015, to the Warrant Agreement, dated as of March 9, 2015, with the PIPE Investors (as further described below), the PIPE Investors paid the Company $483,559 in the aggregate, and the per share exercise price of the Class A Warrants and Class B Warrants was set at $5.17 and $6.45, respectively, reduced from $5.295 to $5.17 and from $6.595 to $6.45, respectively.

The 2015 Warrants are exercisable for a ten year term and may only be exercised for cash. The number of Common Stock that may be acquired upon exercise of the 2015 Warrants is subject to anti-dilution adjustments for stock splits, subdivisions, reclassifications or combinations, or the issuance of Common Stock for a consideration per share less than 85% of the market price per share immediately prior to such issuance. Upon the occurrence of certain business combinations the 2015 Warrants will be converted into the right to acquire shares of stock or other securities or property (including cash) of the successor entity.

The 2015 Warrants are not exercisable until the earlier of (i) September 9, 2015, or (ii) the date Stockholder Approval (as defined below) is received. If Stockholder Approval is not obtained at the Company’s 2015 annual meeting of stockholders (the “2015 Annual Meeting”) to be held on May 11, 2015, no 2015 Warrants may be exercised until September 9, 2015, and, subsequent to September 9, 2015, the 2015 Warrants may be exercised only in accordance with the Conversion Cap (as defined below). Until Stockholder Approval is obtained, the 2015 Warrants may not be exercised if such exercise would cause the holder together with its affiliates to beneficially own in the aggregate greater than 19.99% of the Company’s Common Stock after giving effect to the exercise (the “Conversion Cap”). If the 2015 Annual Meeting is postponed or delayed and Stockholder Approval is not sought prior to September 9, 2015, then the 2015 Warrants are not exercisable until the first vote of the stockholders to occur after September 9, 2015.

The value assigned to the 2015 Warrants was $2.9 million (see Note 4 - PIPE Transaction) which is classified as additional paid in capital in stockholders’ equity on the Consolidated Balance Sheet.

2010 Common Stock Purchase Warrants

In connection with the acquisition of CHS in March 2010, the Company issued 3.4 million warrants (the “2010 Warrants”) exercisable for Common Stock. The 2010 Warrants had a five year term with an exercise price of $10.00 per share. They were exercisable at any time prior to the expiration date.  

During the year ended December 31, 2013, the Company issued 78,567 shares of common stock pursuant to the cashless exercise of 256,175 of the 2010 Warrants. No 2010 Warrants were exercised during 2014 or during the three months ended March 31, 2015. The 2010 Warrants expired in March 2015.