9.	Stockholder’s Equity

Preferred Stock

The Company has 5,000,000 shares of authorized, but unissued shares of preferred stock with a par value of $0.001 per share.

Common Stock

The Company has 1,000,000,000 shares of authorized common stock with a par value of $0.001 per share, of which 18,614,968 shares are issued and outstanding as of December 31, 2015.

Private Placements

On April 29, 2014, the Company issued to various institutional and individual accredited investors an aggregate of 2,776,500 shares of common stock and four-year warrants to purchase an aggregate of 832,950 shares of common stock. The price of each unit, which consisted of one share of common stock plus a warrant to purchase 0.3 share of common stock was $4.00. The exercise price of the warrant is $4.80 per share. In addition, on April 29, 2014, the Company issued to its placement agent as part of its compensation warrants to purchase 277,650 shares of common stock, on substantially the same terms as the warrants issued to investors. Also, on April 29, 2014, the Company issued a warrant to purchase 35,000 shares of common stock to its placement agent as compensation for a debt conversion transaction. The exercise price of the warrant is $4.80 per share.

On May 6, 2014, the Company issued to various institutional and individual accredited investors an aggregate of 3,418,125 shares of common stock and four-year warrants to purchase an aggregate of 1,025,438 shares of common stock. The price of each unit, which consisted of one share of common stock plus a warrant to purchase 0.3 share of common stock was $4.00. The exercise price of the warrant is $4.80 per share. In addition, on May 6, 2014, the Company issued to its placement agent as part of its compensation warrants to purchase 341,813 shares of common stock, on substantially the same terms as the warrants issued to investors.

On May 21, 2014, the Company issued to various institutional and individual accredited investors an aggregate of 872,310 shares of common stock and four-year warrants to purchase an aggregate of 261,693 shares of common stock. The price of each unit, which consisted of one share of common stock plus a warrant to purchase 0.3 share of common stock was $4.00. The exercise price of the warrant is $4.80 per share. In addition, on May 21, 2014, the Company issued to its placement agent as part of its compensation warrants to purchase 89,731 shares of common stock, on substantially the same terms as the warrants issued to investors.

On June 13, 2014, the Company issued to various institutional and individual accredited investors an aggregate of 1,778,750 shares of common stock and four-year warrants to purchase an aggregate of 533,625 shares of common stock. The price of each unit, which consisted of one share of common stock plus a warrant to purchase 0.3 share of common stock was $4.00. The exercise price of the warrant is $4.80 per share. In addition, on June 13, 2014, the Company issued to its placement agent as part of its compensation warrants to purchase 177,875 shares of common stock, on substantially the same terms as the warrants issued to investors.

On July 10, 2014, the Company issued to various institutional and individual accredited investors an aggregate of 50,000 shares of common stock and four-year warrants to purchase an aggregate of 15,000 shares of common stock. The price of each unit, which consisted of one share of common stock plus a warrant to purchase 0.3 share of common stock was $4.00. The exercise price of the warrant is $4.80 per share. In addition, on June 13, 2014, the Company issued to its placement agent as part of its compensation warrants to purchase 5,000 shares of common stock, on substantially the same terms as the warrants issued to investors.

Gross proceeds of the private placement to the Company were approximately $35.6 million and net proceeds were approximately $31.9 million, after paying $3.6 million of placement agent fees and $0.1 million of offering expenses. The Company filed a registration statement on Form S-1 with the SEC on July 14, 2014 registering the offering and resale of 11,633,885 shares of common stock, including the outstanding shares of common stock and shares of common stock issuable upon exercise of the warrants issued in the private placement. This registration statement was declared effective by the SEC on July 31, 2014.

Common Stock Issued in Settlement of Obligations

On April 29, 2014, the Company issued to its then Chairman of the Board 546,553 shares of common stock and a warrant to purchase 351,060 shares of common stock at an exercise price of $2.00 per share upon conversion of four convertible promissory notes in the aggregate principal amount of $1,050,000 issued by the Company. The Company recorded a loss on this conversion in the amount $1,650,378.

On May 21, 2014 the Company issued 259,236 shares of common stock to a creditor upon conversion of a promissory note in the principal amount of $500,000. On December 2, 2014, the Company issued 7,764 shares of common stock to two creditors upon conversion of promissory notes in the principal amount of $50,000. The Company recorded a loss on these settlements in the amount of $400,016.

The Company issued an aggregate of 160,056 shares of common stock to creditors, former directors and a former officer, pursuant to settlements of outstanding liabilities then owed to such individuals, and 53,457 shares of common stock and a warrant to purchase 16,037 shares of common stock as part of a settlement of outstanding amounts due to the law firm.

On October 21, 2014, the Company issued to a then member of the Company’s Board of Directors 100,000 shares of common stock and a warrant to purchase 75,000 shares of common stock at an exercise price of $4.80 per share upon conversion of a note payable in the principal amount of $200,000 issued by the Company. The Company recorded a loss on this conversion in the amount $257,394.

Stock Options

Options to purchase an aggregate of 3,011,498 shares of common stock were outstanding as of December 31, 2015, and options to purchase an aggregate of 1,861,952 shares of common stock were exercisable as of December 31, 2015.

During the year ended December 31, 2014, the Company issued options to purchase an aggregate of 438,131 shares, respectively, of common stock to non-employee members of the Company’s Board of Directors at a weighted average exercise price of $3.70 per share. These options have a ten-year term and vest in equal quarterly installments over three years. No such options were issued in 2015.

During the years ended December 31, 2015 and 2014, the Company issued options to purchase an aggregate of 6,650 and 2,849,050 shares of common stock to employees of the Company at a weighted average exercise price of $1.90 and $3.70 per share. These options have a ten-year term and vest in equal quarterly installments over three years.

Warrants

Warrants to purchase an aggregate of 4,781,574 shares of the Company’s common stock were outstanding and exercisable as of December 31, 2015:

Issue Date	Number of Underlying Shares of Common Stock		Per Share Exercise Price		Expiration Date
February 2, 2011		2,000		100.00	February 2, 2016
February 23, 2011		1,500		100.00	February 23, 2016
March 15, 2011		1,200		100.00	March 15, 2016
April 6, 2011		2,000		100.00	April 6, 2016
April 15, 2011		1,200		100.00	April 15, 2016
April 26, 2011		2,500		100.00	April 26, 2016
April 29, 2011		3,000		100.00	April 29, 2016
June 26, 2011		104,057		65.00	June 26, 2016
June 26, 2011		52,028		100.00	June 26, 2016
July 1, 2011		5,300		65.00	July 1, 2016
May 23, 2012		30,000		30.00	May 23, 2017
July 1, 2012		10,000		75.00	July 1, 2017
August 20, 2012		90,000		38.00	August 20, 2017
March 27, 2013		173,917		3.00	March 27, 2018
March 17, 2014		15,000		4.90	March 17, 2019
April 29, 2014		832,950		4.80	April 29, 2018
April 29, 2014		277,650		4.80	April 29, 2018
April 29, 2014		35,000		4.80	April 29, 2018
April 29, 2014		351,060		2.00	April 29, 2018
May 6, 2014		1,025,438		4.80	May 6, 2018
May 6, 2014		341,813		4.80	May 6, 2018
May 21, 2014		261,693		4.80	May 21, 2018
May 21, 2014		89,731		4.80	May 21, 2018
June 13, 2014		533,625		4.80	June 13, 2018
June 13, 2014		177,875		4.80	June 13, 2018
June 13, 2014		16,037		4.80	June 13, 2018
July 10, 2014		15,000		4.80	July 10, 2018
July 10, 2014		5,000		4.80	July 10, 2018
October 21, 2014		75,000		4.80	October 21, 2018
December 8, 2014		250,000		3.75	December 8, 2019
		4,781,574

During the year ended December 31, 2014, the Company issued to investors in its private placement warrants to purchase an aggregate of 2,668,706 shares of common stock at an exercise price of $4.80 per share and to the placement agent in the private placement as partial consideration for its services in connection with the private placement warrants to purchase an aggregate of 892,069 shares of common stock at an exercise price of $4.80 per share. The Company also issued the placement agent a warrant to purchase 35,000 shares of common stock at an exercise price of $4.80 per share as compensation for a debt conversion transaction. These warrants have a four-year term and were immediately vested and exercisable as of the date of grant.

In addition, during the year ended December 31, 2014, the Company issued to its then Chairman of the Board a warrant to purchase 351,060 shares of common stock at an exercise price of $2.00 per share in addition to 546,553 shares of common stock upon conversion of four convertible promissory notes of the Company in the aggregate principal amount of $1,050,000. See note 13 to the consolidated financial statements. This warrant has a four-year term and was immediately vested and exercisable as of the date of grant, resulting in Black-Scholes fair value of $803,221 included within “settlement loss on notes payable – related parties” on the consolidated statements of operations during the year ended December 31, 2014.

In addition, during the year ended December 31, 2014, the Company issued a warrant to purchase 75,000 shares of common stock at an exercise price of $4.80 per share in addition to 100,000 shares of common stock to a member of the Company’s Board of Directors upon conversion of a non-interest bearing and unsecured note in the principal amount of $200,000. See note 13 to the consolidated financial statements. This warrant has a four-year term and was immediately vested and exercisable as of the date of grant, resulting in Black-Scholes fair value of $107,395 included within “settlement loss on notes payable – related parties” on the consolidated statements of operations during the year ended December 31, 2014.

In addition, during the year ended December 31, 2014, the Company issued to a law firm a four-year warrant to purchase 16,037 shares of common stock at an exercise price of $4.80 as part of a settlement of outstanding amounts due to the law firm. This warrant has a four-year term and was immediately vested and exercisable as of the date of grant, resulting in Black-Scholes fair value of $24,393 included within “general and administrative expenses” on the consolidated statements of operations during the year ended December 31, 2014.

In addition, during the year ended December 31, 2014, the Company issued to an independent consultant a warrant to purchase 15,000 shares of common stock at an exercise price of $4.90 in consideration for services. This warrant has a five-year term and vested in monthly installments over one year, resulting in 15,000 vested shares and a Black-Scholes warrant expense of $25,976 during the year ended December 31, 2014 and a mark to market adjustment of $516 during the year ended December 31, 2015. In addition, during the year ended December 31, 2014, the Company issued to its investor relations firm a warrant to purchase 250,000 shares of common stock at an exercise price of $3.75 in consideration for investor relations services for one year, which commenced on December 15, 2014 and ended in 2015. This warrant has a five-year term and was immediately vested and exercisable as of the date of grant, resulting in Black-Scholes warrant value of $517,576, of which $496,010and $21,566 was expensed in general and administrative expenses during the years ended December 31, 2015 and 2014.

The Company estimates the fair value of warrants using a Black-Scholes model that considers assumptions noted in the table below:

	2014

Risk-free interest rate	1.11	–	1.67%
Expected life in years	4.0	–	5.0
Expected volatility	64%	-	66%
Expected dividend yield		—