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Subsequent Events
6 Months Ended
Jun. 30, 2016
Subsequent Events [Abstract]  
Subsequent Events

 

NOTE 13 – SUBSEQUENT EVENTS:

 

On July 7, 2016, the Company closed a public offering of 442,424 shares of Series B Convertible Preferred Stock and accompanying warrants to purchase up to 44,242,400 shares of common stock (the “July 2016 Offering”). Each share of Series B Convertible Preferred Stock is convertible into 100 shares of common stock at a conversion price equal to $0.33 per share, and the holders of Series B Convertible Preferred Stock will be entitled to receive cumulative dividends at the rate per share of 15% per annum of the stated value for five years. The warrants are exercisable immediately and have a term of exercise of five years from the date of issuance and have an exercise price of $0.20 per share of common stock. The Series B Convertible Preferred Stock and accompanying warrants were sold at a price of $33.00 per share. The Company received gross proceeds of approximately $14.6 million from the offering, before deducting placement agent fees and estimated offering expenses payable by the Company.

 

Following the closing of the July 2016 Offering, pursuant to a warrant agreement (see Note 4), the Company issued 967,269 warrants to a lender.

 

On July 25, 2016, and in connection with the fourth amendment to the CEO’s employment agreement, the CEO was granted his Financing Option to purchase 1,762,478 shares of the Company’s common stock at an exercise price equal to the closing fair market value of the Common Stock on the date of grant. The options will vest on the first anniversary of the date of the grant.

 

On August 1, 2016, and in connection with the fourth amendment to the CEO’s employment agreement, the CEO was granted his Financing Restricted Stock Award of 1,762,478 restricted shares of the Company’s common stock. The restricted shares will vest on the first anniversary of the date of the grant.