12. Subsequent Events

12 Months Ended

Dec. 31, 2014

In January 2015, warrants to purchase 1,217,779 shares of the Company’s common stock were exercised on a cashless basis resulting in the issuance of 857,324 shares of common stock.

In January and February 2015, 31,500 shares of Series C-3 preferred stock were converted into 315,000 shares of the Company’s common stock.

In February 2015, stock options to purchase 30,000 shares of the Company’s common stock were exercised resulting in gross proceeds of $63,000 to the Company.

In January through March 9, 2015, the following warrants were exercised, resulting in aggregate gross proceeds of approximately $2 million to the Company:

●	125,000 shares of the Company’s common stock with exercise price of $0.90 per share;

●	305,000 shares of the Company’s common stock with exercise price of $2.50 per share; and

●	321,844 shares of the Company’s common stock with exercise prices of $3.4375 per share.

On March 3, 2015, the Company entered into a Backstop Agreement with an existing institutional investor, Manchester Securities Corp., an affiliate of Elliott Associates, L.P., pursuant to which Manchester has agreed to lend the Company, at its request, up to $4,500,000 less the dollar amount of gross proceeds received by the Company upon the exercise of warrants to purchase common stock issued in connection with its initial public offering on or before April 30, 2015, provided that the loan may not exceed $3,000,000, due to preferred stock agreement restrictions (See Note 8). The Company may access this financing until April 30, 2015. To access the loan, the Company must meet customary conditions. The loan would bear interest at 6% per annum and would be payable quarterly. The loan would be convertible into common stock of the Company at the lower of a) 80% of the closing price on the day preceding the issuance date of the Note or b) 80% of the average of the seven volume weighted average prices immediately prior to the issuance date of the Note. The loan would mature on April 30, 2020. In consideration for the backstop financing, the Company issued to Manchester a warrant, exercisable for five years, to purchase 200,000 shares of common stock at a per share exercise price of $7.00, and the Company extended by one year to March 24, 2016, the expiration date of a warrant that Manchester holds to purchase 390,720 shares of common stock at a per share exercise price of $3.4375.