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Subsequent Events
12 Months Ended
Dec. 31, 2015
Subsequent Events [Abstract]  
Subsequent Events

10. Subsequent Events

 

Effective January 28, 2016, the Series A Convertible Preferred Stock (the “Preferred Stock”) Certificate of Designations was amended to increase the number of authorized shares of Preferred Stock to from 175,000 to 350,000. The Company also entered into a Securities Purchase Agreement with the current holder of the Preferred Stock on January 21, 2016, pursuant to which the Company sold an additional 175,000 shares of the Company’s Preferred Stock at a per share price of $10.00, representing an aggregate purchase price of $1,750,000, payable $583,333 on closing, $583,333 on or before March 4, 2016, and $583,334 on or before June 3, 2016. This class of Preferred Stock has a dividend per share equal to 1% of the annual net revenue of the Company divided by 175,000, until converted or redeemed. Each share of Preferred Stock may be converted, at the option of the holder, into 12.5 shares of common stock (subject to customary anti-dilution provisions) and the Preferred Stock is subject to mandatory conversion at the conversion rate in the event of a merger or sale transaction resulting in gross proceeds to the Company of at least $21,875,000. If fully converted, the Preferred Stock would convert into 2,187,500 shares of common stock, representing an effective price per common share of $0.80. On the effective date of the transaction, the closing price of the Company’s common stock was $0.22 per share. The Company has the right to redeem the Preferred Stock up to the fifth anniversary of the closing date at a price per share equal to $50.00.

 

The Company performed an evaluation of subsequent events through the date of filing of these financial statements with the SEC, noting no other items requiring disclosure.