XML 24 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Warrants
9 Months Ended
Sep. 30, 2018
Equity [Abstract]  
Warrant Disclosure [Text Block]

8. Warrants

 

In connection with the License Agreement, the Company issued to ABX on September 29, 2017, two warrants to purchase up to 4,000,000 shares of the Company’s common stock, at a per share exercise price of $1.39, which was equal to the average closing price of the Company’s common stock during the 30 calendar days prior to September 29, 2017. The Company accounted for the warrants at fair value in stockholders’ equity. Immediately upon issuance, ABX assigned the warrants to an affiliate and certain related parties, which exercised a warrant for 3,278,000 shares of the Company’s common stock on September 29, 2017, resulting in proceeds to the Company in the amount of approximately $4.6 million. The remaining outstanding warrant, covering an aggregate of 722,000 shares of the Company’s common stock, remained outstanding as of September 30, 2018, is exercisable until September 29, 2027, and is subject to restrictions on transfer. This outstanding warrant was valued as of September 30, 2018 using the Black-Scholes model utilizing a ten-year term, the Company’s historic volatility of 91.1%, and an interest rate of 2.28% which is the risk-free interest rate of a treasury bond with the same term as the outstanding warrant, of which inputs are level 2 fair value measurements. There were no other outstanding warrants as of September 30, 2018.

 

On October 19, 2018, the remaining outstanding warrant was exercised in part, with respect to 280,000 shares of the Company’s common stock, resulting in 442,000 shares of the Company’s common stock remaining subject to issuance under that outstanding warrant. The outstanding warrant contains a conversion feature in the case of certain mergers or consolidations by the Company. Pursuant to the terms of the Merger Agreement and the terms of the outstanding warrant, if the Merger is consummated, the outstanding warrant will be deemed to be automatically exercised immediately prior to the effective time of the Merger, and the holder of the outstanding warrant will participate in the Merger as a holder of the Company’s common stock on the same terms as other holders of the Company’s common stock, but the holder’s aggregate consideration received in the Merger will be reduced by the aggregate exercise price then in effect for the shares of the Company’s common stock purchasable under the outstanding warrant.