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8. Warrants

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

The following table summarizes warrant activity for the years ended December 31, 2015 and 2014:

		Year Ended								Year Ended
		December 31, 2015								December 31, 2014
						Wtd. Avg.								Wtd. Avg.
						Exercise								Exercise
		Shares				Price				Shares				Price
Outstanding at beginning of year			7,428,141			$	4.49				517,858			$	1.02
Granted			––				––				6,910,283				4.75
Exercised			(232,144	)			1.03				––				––
Forfeited/Expired			––				––				––				––
Outstanding and exercisable at end of year			7,195,997			$	4.60				7,428,141			$	4.49

As discussed in Note 1, during the year ended December 31, 2014, we issued 3,588,878 warrants with an expiration date of March 25, 2021 in connection with the Company’s public offering of units on March 25, 2014. Each whole warrant is exercisable for a period of seven years to acquire one share of common stock with an exercise price of $4.75 per share. In addition, we issued 3,321,405 warrants with an expiration date of March 25, 2021 in connection with the conversion of approximately $14.3 million of indebtedness to the Company’s existing Note Holders into equity on March 25, 2014. Each whole warrant is exercisable for a period of seven years to acquire one share of common stock with an exercise price of $4.75 per share.

The outstanding warrants have expiration dates between August 2016 and March 2021.

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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