Stockholders' Equity

6 Months Ended

Jul. 31, 2015

Equity [Abstract]

Stockholders' Equity

Note 10 - Stockholders’ Equity

(A) Series A Convertible Preferred Stock Transactions

On May 28, 2015, the Company amended its articles of incorporation to establish the designation, powers, rights, privileges, preferences and restrictions of the Series A Convertible Preferred Stock (“Series A Preferred”). The Company authorized 120,000 shares of Series A Preferred with each share of our Series A Preferred having a par value of $0.00001 and stated value equal to $100, as adjusted for stock dividends, combinations, splits and certain other events. The holders of the Series Preferred A will be entitled to dividends at a rate of 8%, liquidation preference equal to $1.25 per share and the option to convert the preferred shares to common stock. On July 23, 2015, the preference changed to $1.00. Subsequent to July 31, 2015 the liquidation preference was changed to $0.675.

On June 11, 2015, the Company completed the initial closing of a private placement of 20 preferred units (“Initial Closing”). Each unit consists of five hundred shares of Series A Preferred and one Warrant to purchase 100% of the number of conversion shares initially issuable upon conversion of the unit shares at an exercise price of $1.25 per share. The Initial Closing resulted in 800,000 warrants issued to the investors. These warrants have a grant date fair value of $766,091.

During May 2015, six directors of the Company entered into convertible note agreements with a maturity date of July 22, 2016 for total proceeds to the Company of $650,000. In June 2015, the notes were converted into Series A Preferred. Additional proceeds of $350,000 was received pursuant to the June 11, 2015 closing. In connection with the Initial Closing, the Company has paid a placement agent an aggregate cash fee and non-accountable allowance of $130,000, of which $65,000 is in accounts payable and accrued expenses on the condensed consolidated balance sheets, and issued warrants to purchase 80,000 shares of Common Stock at $1.25 per share. The warrants have a grant date fair value of $76,608 which is treated as a direct costs of the stock offering and has been recorded as a reduction in additional paid in capital.

(B) Common Stock Transactions

On December 19, 2014, the Company issued a convertible redeemable debenture (the “Manatuck Debenture” as discussed in Note 8). Upon issuance of the Manatuck Debenture, the Company granted Manatuck 200,000 shares of the Company’s restricted common stock. In April 2015 the maturity date of the note was extended until May 2016. Upon execution of the extension, the Company granted Manatuck 30,000 shares of the Company’s restricted common stock.

During the six months ended July 31, 2015, the Company issued 8,540 shares of its common stock for a cashless conversion of 22,666 warrants.

(C) Options

The following is a summary of the Company’s option activity:

	Options		Weighted Average Exercise Price
Outstanding – January 31, 2015		496,404	$	1.04
Exercisable – January 31, 2015		496,404	$	1.04
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding – July 31, 2015		496,404	$	1.04
Exercisable – July 31, 2015		496,404	$	1.04

Options Outstanding					Options Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	1.00		487,404	2.22 years	$	1.00		487,404	$	1.00
$	2.97		9,000	3.75 years	$	2.97		9,000	$	2.97

At July 31, 2015 and January 31, 2015, the total intrinsic value of options outstanding and exercisable was $0 and $219,332, respectively.

As of July 31, 2015, the Company has $0 in stock-based compensation related to stock options that is yet to be vested. The weighted average remaining life of the options is 2.24 years.

(D) Warrants

The following is a summary of the Company’s warrant activity:

	Warrants			Weighted Average Exercise Price
Outstanding – January 31, 2015		1,027,401		$	1.27
Exercisable – January 31, 2015		1,027,401		$	1.27
Granted		880,000		$	1.25
Exercised		(22,666	)	$	1.25
Forfeited/Cancelled		-		$	-
Outstanding – July 31, 2015		1,884,735		$	1.26
Exercisable – July 31, 2015		1,884,735		$	1.26

Warrants Outstanding						Warrants Exercisable
Range of Exercise Price	Number Outstanding		Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$1.00-$2.50		1,884,735	3.67 years	$	1.26	1,884,735	$	1.26

At July 31, 2015 and January 31, 2015, the total intrinsic value of warrants outstanding and exercisable was $0 and $227,430, respectively.