Stockholders’ Equity

Series E Convertible Preferred Stock Private Placement

In April and May 2018, the Company entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 2,812 shares of our Series E Preferred, at a purchase price of $5,000 per share of Series E Preferred. Each share of Series E Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5 year warrant to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series E Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. In July of 2018, the conversion price of the warrants was adjusted down to $0.50 upon issuance of the Series F Convertible Preferred Stock. Series E Preferred accrues 8% dividends per annum which are payable in cash or stock at the Company’s discretion. The Series E Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in April 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations.

We received net proceeds of approximately $12.2 million from the sale of the Series E Preferred, after deducting placement agent fees and estimated expenses payable by us of approximately $2.0 million associated with such closing. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 2,958,460 shares of our common stock.

In October 2018, an investor converted 2 shares of Series E Preferred into 20,000 shares of our common stock.

In April 2019, the Company issued 107,846 unregistered shares of our common stock to a holder of our Series E Convertible Preferred Stock in connection with the conversion of $53,923 of “Stated Value” of our Series E Convertible Preferred Stock.

As of September 30, 2019, the Company had recorded accrued dividends of approximately $2.0 million on Series E Preferred Stock.

Series F Convertible Preferred Stock Private Placement

In July 2018, the Company entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 308 shares of our Series F Preferred, at a purchase price of $5,000 per share of Series F Preferred. Each share of Series F Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5 year warrant (the “Warrants”, and collectively with the Preferred Stock, the “Securities”) to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series F Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. The Series F Preferred accrues 8% dividends per annum which are payable in cash or stock at the Company’s discretion. The Series F Preferred has voting rights, dividend rights, liquidation preferences, conversion rights and anti-dilution rights as described in the Certificate of Designation of Preferences, Rights and Limitations of the Preferred Stock, which we filed with the Secretary of State of Delaware in July 2018. The Warrants have full-ratchet anti-dilution protection, are exercisable for a period of five years and contain customary exercise limitations.

The Company received proceeds of approximately $1.4 million from the sale of the Securities, after deducting placement agent fees and estimated expenses payable by us of approximately $180,000 associated with such closing. We used the proceeds of the offering for funding our commercial operations to the sale and promotion of our Prestalia product, working capital needs, capital expenditures, the repayment of certain liabilities and other general corporate purposes. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 308,000 shares of our common stock. The Warrant has a five-year term and an initial exercise price of $0.55 per share.

On November 9, 2018, the Company entered into Subscription Agreements with certain accredited investors and conducted a closing pursuant to which we sold 73 shares of our Series F Preferred Stock, at a purchase price of $5,000 per share of Preferred Stock. Each share of Series F Preferred is initially convertible into shares of our common stock at a conversion price of $0.50 per share of common stock. In addition, each investor received a 5 year warrant to purchase 0.75 shares of common stock for each share of common stock issuable upon the conversion of the Series F Preferred purchased by such investor at an initial exercise price equal to $0.55 per share of common stock, subject to adjustment thereunder. We received total net proceeds of approximately $0.3 million from the issuance of the securities described above, after deducting placement agent fees and estimated expenses payable by us associated with such closing. In connection with the private placement described above, we also issued to the placement agent for such private placement a Warrant to purchase 73,000 shares of our common stock. The Warrant has a five-year term and an initial exercise price of $0.55 per share.

As of September 30, 2019, the Company had recorded accrued dividends of approximately $177,000 on Series F Preferred Stock.

Warrants

As of September 30, 2019, there were 35,667,329 warrants outstanding, with a weighted average exercise price of $0.63 per share, and annual expirations as follows:



Expiring in 2020	1,189,079
Expiring in 2021	343,750
Expiring in 2023	33,795,847
Expiring thereafter	338,653
Total	35,667,329

The above includes price adjustable warrants totaling 34,737,030 shares.

A total of 600,000 warrants expired during the three and nine months ended September 30, 2019.

Tender Offer - May 2019

On May 28, 2019, the Company filed a Tender Offer Statement on Schedule TO. The Schedule TO related to the offer (the “Offer”) by the Company to all holders of the Company’s outstanding warrants that were issued to investors in connection with the Company’s private placement of its Series E Convertible Preferred Stock and Series F Convertible Preferred Stock during 2018, which warrants are exercisable for shares of the Company’s common stock at an exercise price of $0.50 per share (subject to adjustment) with respect to the warrants that were issued in connection with the Company’s private placement of its Series E Convertible Preferred Stock and $0.55 per share with respect to the warrants that were issued in connection with the Company’s private placement of its Series F Convertible Preferred Stock, to receive two (2) shares of common stock in exchange for every warrant tendered by the holders thereof.

On June 6, 2019, the Company amended the Schedule TO to change the conversion terms on the issuance of warrant.

On July 2, 2019, the Company announced the termination of the exchange offer. As a result of the termination of the Offer, no Warrants were accepted for exchange or exchanged pursuant to the Offer.

Tender Offer - August 2019

On August 20, 2019, the Company filed a Tender Offer Statement on Schedule TO. The Schedule TO related to the offer by the Company to all holders of the Company’s outstanding shares of Series E Convertible Preferred Stock and Series F Convertible Preferred Stock to receive, in exchange for each share of preferred stock tendered by the holders thereof, such number of shares of common stock as is equal to the quotient obtained by dividing the “stated value” of such share of preferred stock by $0.50.

On September 26, 2019, the Company announced the termination of the Offer. As a result of the termination of the Offer, no shares of preferred stock were accepted for exchange or exchanged pursuant to the Offer.