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SUBSEQUENT EVENTS | 3 Months Ended
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Mar. 31, 2019
Subsequent Events [Abstract] |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS Convertible Notes Through the issuance date of this Report on Form 10-Q, approximately $3.7 million of the total $4.1 million of convertible notes that were outstanding at March 31, 2019, plus interest, has been converted into a total of approximately 1,061,069 shares of common stock of the Company. April 2019 Note Issuance. On April 16, 2019, the Company entered into the Amendment No.2 Agreement amending and restating the terms of the 2018 Note Agreement (as first amended pursuant to the Amendment and Restatement dated November 29, 2018). The Amendment No. 2 Agreement provides for the issuance of up to approximately $989,011 of April 2019 Additional Notes and Warrants on substantially the same terms and conditions as the notes and warrants that were issued in connection with the original amendment and restatement. The April 2019 Additional Notes and Warrants shall be purchased no later than May 31, 2019, and were subscribed for by investors that previously participated in the 2018 Note Agreement. Upon issuance of the April 2019 Additional Notes, the Company will calculate any debt issuance costs, including possible beneficial conversion features, and record them as a reduction of the debt in its condensed consolidated balance sheet, similar to the Bridge Notes that the Company issued during 2018 (see Note 7 – Convertible Notes). The conversion price of the April 2019 Additional Notes shall be equal to the greater of $3.75 or $0.75 above the closing bid price of our common stock on the date prior to the original issue date. In the event the notes are not paid in full prior to 180 days after the original issue date, the conversion price shall be equal to 80% of the lowest volume weighted average price (“VWAP”) in the 10 trading days prior to the date of the notice of conversion, but in no event below the floor price of $2.25. On April 16, 2019, the initial closing of April 2019 Additional Notes provided the Company with approximately $900,000 of gross proceeds for the issuance of notes with an aggregate principal of approximately $989,011. As part of the transaction, the investors also received 146,520 warrants to purchase common stock of the Company exercisable at a price of $5.40. May 2019 Note Issuance. On May 14, 2019, the Company entered into the May 2019 Note Agreement and May 2019 Transaction, pursuant to which the Company would issue up to approximately $1,098,901 in Senior Secured Convertible Promissory Notes along with warrants. The number of warrants is equal to the number of shares of common stock issuable upon conversion of the notes based on the conversion price at the time of issuance. The warrants have a five year term.The May 2019 Note Agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. The Transaction consists of a series of unregistered Senior Secured Convertible Notes (the “May 2019 Bridge Notes”), bearing interest at a rate of 8% annually and an original issue discount of 9%. The May 2019 Bridge Notes are convertible at a price of $7.12 per share, provided that (a) if the notes are not repaid within 180 days of the note’s issuance date or (b) upon a Registration Statement (as defined in the May 2019 Note Agreement) being declared effective, whichever occurs earlier, the conversion price shall be adjusted to 80% of the lowest volume weighted average price during the prior 10 days, subject to a minimum conversion price of $2.25 per share. The closing of the May 2019 Transaction provided the Company with proceeds of $1,000,000, net of an original issue discount of 9% and before debt issuance costs, for the issuance of notes with an aggregate principal of $1,098,901. The May 2019 Bridge Notes are payable by the Company on the earlier of (i) April 16, 2020 or (ii) upon the closing of a qualified offering, namely the Company raising gross proceeds of at least $7,000,000 (the “Maturity Date”). At any time, provided that the Company gives 5 business days written notice, the Company has the right to redeem the outstanding principal amount of the May 2019 Bridge Notes, including accrued but unpaid interest, all liquidated damages and all other amounts due under the May 2019 Bridge Notes, for cash as follows: (i) an amount which is equal to the sum of 105% if the Company exercises its right to redeem the May 2019 Bridge Notes within 90 days of the initial closing, (ii) 110% if the Company exercises its right to redeem the May 2019 Bridge Notes within 180 days of the initial closing, or (iii) 115% if the Company exercises its right to redeem after 180 days from the initial closing. The terms of the May 2019 Note Agreement also stipulate that upon written demand by one of the investors after August 22, 2019, the Company shall file a registration statement within thirty (30) days after written demand covering the resale of all or such portion of the conversion shares for an offering to be made on a continuous basis pursuant to Rule 415. The registration statement filed shall be on Form S‑3 or Form S‑1, at the option of the Company. If the Company does not file a registration statement in accordance with the terms of the May 2019 Note Agreement, then on the business day following the applicable filing date and on each monthly anniversary of the business day following the applicable filing date (if no registration statement shall have been filed by the Company in accordance herewith by such date), the Company shall pay to the investors an amount in cash, as partial liquidated damages, equal to 1% per month (pro-rata for partial months) based upon the gross purchase price of the May 2019 Bridge Notes (calculated on a daily basis) under the May 2019 Note Agreement. The obligations under the May 2019 Bridge Notes are secured, subject to certain exceptions and other permitted payments by a perfected security interest on the assets of the Company. The 9% discount associated with the May 2019 Bridge Notes was approximately $98,901 and was recorded as a debt discount. As part of the closing of the May 2019 Note Agreement, the investors received 154,343 warrants to purchase 154,343 shares of common stock of the Company (the “May 2019 Warrants”), exercisable at $9.56.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 + Details
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