ISSUANCE OF MEMBERSHIP INTERESTS and COMMON STOCK

12 Months Ended

Dec. 31, 2014

ISSUANCE OF MEMBERSHIP INTERESTS and COMMON STOCK

ISSUANCE OF MEMBERSHIP INTERESTS and COMMON STOCK

NOTE 5—ISSUANCE OF MEMBERSHIP INTERESTS and COMMON STOCK

        On February 13, 2013, the Company entered into a securities purchase agreement with 7 investors, for the private placement of the Company's Class A Membership Interests and warrants to purchase its Class A Membership Interests, at a purchase price of $50 per unit. Each unit is comprised of one Class A Membership Interest and a warrant to purchase one-half of the total Class A Membership Interests purchased. The Company issued and sold an aggregate of 18,000 units, comprised of 18,000 Class A Membership Interests and warrants to purchase up to 9,000 additional Class A Membership Interests for gross proceeds of $900,000. Each warrant, exercisable for 5 years from February 13, 2013, has an exercise price of $60 per Class A Membership Interest.

        On July 12, 2013, the Company entered into a securities purchase agreement with 28 investors, for the private placement of the Company's Class A Membership Interests and warrants to purchase its Class A Membership Interests, at a purchase price of $50 per unit. Each unit is comprised of one Class A Membership Interest and a warrant to purchase one-half of the total Class A Membership Interests purchased. The Company issued and sold an aggregate of 55,500 units, comprised of 55,500 Class A Membership Interests and warrants to purchase up to 27,750 additional Class A Membership Interests for gross proceeds of $2,775,000. Each warrant, exercisable for 5 years from July 12, 2013, has an exercise price of $60 per Class A Membership Interest.

        On November 15, 2013, the Company entered into a securities purchase agreement with 25 investors, for the private placement of the Company's Class A Membership Interests and warrants to purchase its Class A Membership Interests, at a purchase price of $50 per unit. Each unit is comprised of one Class A Membership Interest and a warrant to purchase one-half of the total Class A Membership Interests purchased. The Company issued and sold an aggregate of 18,850 units, comprised of 18,850 Class A Membership Interests and warrants to purchase up to 9,425 additional Class A Membership Interests for gross proceeds of $942,500. Each warrant, exercisable for 5 years from November 15, 2013, has an exercise price of $60 per Class A Membership Interest.

        In February 2014, the Company issued an aggregate of 23,719 Class A Membership Interests to investors in its prior financings in exchange for 89,900 outstanding warrants with an exercise price $60 per Class A Membership Interest or $8.57 on a 7 to 1 converted basis. The exchange was effectively a cashless exercise in which 23,719 Class A Membership Interests issued were calculated using an implied intrinsic value of the warrants at $2.93 per share, on a 7 to 1 as converted basis and an estimated issuance price of $11.50 per share. As the warrants and membership interests are both classified as equity instruments, the warrant exercise resulted in an immaterial reclassification within members' equity.

        On March 18, 2014, the Company completed an IPO issuing 3,162,500 shares of common stock at a price of $12 per share, resulting in net proceeds of $34,455,669 after deducting underwriting discounts of $2,656,500 and offering costs $837,831. The outstanding Class A Membership Interests were converted to shares of common stock using a conversion ratio of 7 to 1, resulting in the conversion of 767,911 Class A Membership Interests into an aggregate of 5,375,377 shares of common stock.

        In October 2014, 2,800 warrants were exercised in a cashless exercise of the warrants, resulting in the issuance of 452 shares of common stock.