| Private Placement |
6.
Private Placement
| |
|
On October 31, 2014, the Company entered
into a securities purchase agreement (the “Securities Purchase Agreement”) with accredited investors (the “Investors”),
pursuant to which the Company issued an aggregate of $6,000,000 principal amount of senior secured convertible notes (the
“Convertible Notes”). In connection with the sale of the Convertible Notes (the “Bridge Financing”), the
Company entered into a registration rights agreement (the “Registration Rights Agreement”) and a security agreement
(the “Security Agreement”) with the Investors. The closing of the Bridge Financing was completed October 31, 2014.
The Convertible Notes bore interest at 6% per annum. |
| |
|
The principal, $6,000,000 and interest,
$279,678, of the Convertible Notes were converted into 2,511,871 shares of the Company’s common stock at a conversion
price of $2.50 per share on August 5, 2015. |
| |
|
On September 8, 2014, the Company entered
into an agreement (the “Placement Agent Agreement”) with National Securities Corporation (“NSC”) pursuant
to which the Company appointed NSC to act as the Company’s placement agent in connection with the sale of the Company’s
securities (“Offering or Offerings”). Specifically, NSC was the placement agent in connection with the sale of its
Convertible Notes. The Placement Agent Agreement will continue in effect until it is terminated by either party with 60 days
written notice to the other party. |
| |
|
In connection with the sale of the Convertible Notes, the Company
paid NSC a cash fee of $553,490 and issued on October 31, 2014 to NSC warrants (“Financing Warrants”) to purchase
shares of the Company’s common stock. NSC subsequently transferred a portion of the Financing Warrants to associated
persons. The Financing Warrants were fully vested upon issuance, have a term of five years, and are immediately exercisable,
provided that upon the Company’s consummation of an IPO, the Financing Warrants may not be exercised until 90 days after
the consummation of the IPO. Pursuant to the terms of the Financing Warrants, the per share exercise price is determined based
upon 120% of the conversion price of the Convertible Notes upon the consummation of the IPO, or upon other events under which
the Convertible Notes may convert. As of September 30, 2015, the Financing Warrants were exercisable into 251,187 shares of
the Company’s common stock at an exercise price of $3.00 per share (calculated as 120% of the Convertible Notes conversion
price of $2.50 per share). |
The
warrant holders have certain registration rights with respect to the common stock issued upon exercise of the Financing Warrants.
| |
|
On September 8, 2014, the Company entered
into a consulting agreement with Liquid Patent Consulting, LLC (“LPC”), pursuant to which LPC agreed to provide
management, strategic and intellectual property advisory services. The Consulting Agreement had an initial term of 180 days
after which it will continue in effect until it is terminated by either party with 30 days written notice to the other party. |
| |
|
As consideration for services provided
under the Consulting Agreement the Company issued warrants (“Consulting Warrants”) to LPC for the purchase of an
aggregate of 436,364 shares of the Company’s common stock. LPC subsequently transferred a portion of the Consulting Warrants
to a third party. |
| |
|
The Consulting Warrants vested upon
issue, have a term of three years, an exercise price of $0.0033475 per share and are immediately exercisable, but may not
be exercised until 90 days after the IPO date. The Consulting Warrants may be exercised on a cashless basis. |
The
warrant holders have certain registration rights with respect to the common stock issued upon exercise of the Consulting Warrants.
|