Equity

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Equity

NOTE 5 - EQUITY:

a. On March 14, 2017 , the Company closed a public offering of 1,069,822 shares of Series C Convertible Preferred Stock, Series B warrants to purchase up to 4,279,288 shares of common stock and Series C warrants to purchase up to 4,279,288 shares of common stock (the “March 2017 Offering”). Each share of Series C Convertible Preferred Stock and the accompanying warrants were sold at a price of $6.40. Each share of Series C Convertible Preferred Stock is convertible into 4 shares of common stock reflecting a conversion price equal to $1.60 per share.

The Company received gross proceeds of approximately $6.8 million from the offering, before deducting placement agent fees payable by the Company equal to 8.0% of the gross proceeds of the offering and a solicitation fee equal to 3.0% of the proceeds from the exercise of the Series C Warrants and offering expenses payable by the Company.

The holders of Series C Convertible Preferred Stock may elect to convert at anytime. The Series C Convertible Preferred Stock has certain anti-dilution provisions.

The Series B warrants are exercisable immediately and have a term of exercise of five years from the date of issuance and have an exercise price of $2.00 per share of common stock.

The Series C warrants are exercisable immediately and have a term of exercise of six months from the date of issuance and have an exercise price of $1.60 per share of common stock.

For accounting purposes, the Company analyzed the classification of the Series C Convertible Preferred Stock, including whether the embedded conversion options should be bifurcated. As the Series C Convertible Preferred Stock is not redeemable, and the host contract was determined to be akin to equity, the entire instrument was classified as equity.

The Company has also concluded that the warrants accompanying Series C Convertible Preferred Stock are classified as equity, since the warrants bear a fixed conversion ratio and all other criteria for equity classification have been met.

The Company’s obligation to pay the placement agent a solicitation fee equal to 3.0% of the proceeds from the exercise of the Series C Warrants when and if the warrants are exercised is a financial liability, classified under “Other Payables” and reduced the amount from Additional Paid-in Capital.

During the 6 month period ended June 30, 2017, 324,047 shares of Series C Convertible Preferred Stock were converted into 1,296,188 shares of common stock.

Pursuant to the terms of the public offering of Series B Convertible Preferred Stock and accompanying warrants closed in July 2016, that provided the holders of the Series B Convertible Preferred Stock with certain anti-dilution protections, upon closing of the March 2017 offering, the conversion price of the Series B Convertible Preferred Stock was adjusted to $1.60 per share of common stock, and each share of Series B Convertible Preferred Stock became convertible into 20.625 shares of common stock. The holders of Series B Convertible Preferred Stock are entitled to receive cumulative dividends at the rate per share of 15% per annum of the stated value for five years, payable in cash or common stock, at our discretion. As a result of such adjustment, the Company was required to issue to the holders of the Series B Convertible Preferred Stock an aggregate of 9,063,314 additional shares of common stock upon conversion of the Series B Convertible Preferred Stock and the payment of the dividends thereunder in common stock, based on 311,521 shares of Series B Convertible Preferred Stock outstanding as of March 8, 2017.

During the 6 month period ended June 30, 2017, 130,226 shares of Series B Convertible Preferred Stock was converted into 4,700,345 shares of common stock.

b. As of June 30, 2017 the Company has authorized 155,000,000 shares of capital stock, par value $0.0001 per share, of which 150,000,000 are shares of common stock and 3,328,000 are shares of “blank check” preferred stock.