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Subsequent Event

3 Months Ended

Mar. 31, 2017

Subsequent Events [Abstract]

Subsequent Event

(8) SUBSEQUENT EVENT

Registered Direct Offering

On April 25, 2017, the Company entered into a subscription agreement with certain investors relating to the issuance and sale of shares of the Company’s common stock at a purchase price of $7.78 per share, which was the closing price of its common stock on April 24, 2017. The offering closed on April 28, 2017. The Company sold 29,566 shares of its common stock and received net proceeds of approximately $219,000, after deducting estimated offering expenses.

The Company intends to use the net proceeds of the offering for general corporate purposes, which may include working capital, general and administrative expenses, capital expenditures and implementation of its strategic priorities.

The shares were offered and sold pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration Statement No. 333-215271) filed with the Securities and Exchange Commission (“SEC”) on December 22, 2016 and declared effective by the SEC on February 2, 2017, and the base prospectus included therein, as supplemented by a prospectus supplement filed with the SEC in connection with the takedown relating to the offering.

As previously reported, in November 2015, the Company received a letter from the NYSE Regulation Inc. stating that it is not in compliance with Section 1003(a)(iii) of the NYSE MKT Company Guide because the Company reported stockholders’ equity of less than $6 million as of September 30, 2015 and had net losses in five of its most recent fiscal years ended December 31, 2014. In December 2015, the Company submitted a plan to NYSE Regulation advising of actions it has taken or will take to regain compliance with Section 1003(a)(iii) by May 13, 2017. In January 2016, NYSE Regulation notified the Company that NYSE Regulation has accepted the Company’s plan and granted the Company a plan period that extends through May 13, 2017 to regain compliance with Section 1003(a)(iii).

In April 2016, as previously reported, the Company received a second letter from NYSE Regulation stating that it is not in compliance with Section 1003(a)(ii) of the Company Guide because the Company reported stockholders’ equity of less than $4 million as of December 31, 2015 and had net losses in three of its four most recent fiscal years ended December 31, 2015. As a result, the Company continues to be subject to the procedures and requirements of Section 1009 of the Company Guide. Because this instance of noncompliance is in addition to the Company’s noncompliance with Section 1003(a)(iii) of the Company Guide discussed above, the Company was not required to submit a new compliance plan.

Under Section 1003(a)(i) of the Company Guide, the NYSE MKT will normally consider suspending dealings in, or removing from the list, securities of an issuer which has stockholders’ equity of less than $2 million if such issuer has sustained losses from continuing operations and/or net losses in two of its three most recent fiscal years. The Company had net losses in two of its three most recent fiscal years ended December 31, 2015. The Company’s stockholders’ equity at September 30, 2016 was $1.8 million, and accordingly, the Company was below compliance with Section 1003(a)(i), as well. However, in the Company’s November 2016 offering it raised approximately $2.7 million, and the Company’s stockholders’ equity at December 31, 2016 was approximately $4.1 million. The Company also raised approximately $1.6 million in March 2017.

The listing of the Company’s common stock on the NYSE MKT is being continued during the plan period. The NYSE Regulation staff reviews the Company periodically for compliance with initiatives outlined in the Company’s plan. If the Company is not in compliance with the listing requirements with which it is currently not in compliance by May 13, 2017 or if the Company does not make progress consistent with its plan during the plan period, NYSE Regulation staff will initiate delisting proceedings as appropriate. The Company has continued to make progress consistent with its plan during the plan period. Raising capital in the offering described above is consistent with the initiatives outlined in the Company’s plan to regain compliance, and after giving effect to the offering described above, the Company believes it will have regained compliance with Sections 1003 (a)(i), (ii) and (iii) of the Company Guide, however determination of whether the Company has regained such compliance will be made by NYSE Regulation and will be publicly disclosed by the Company.

The following table shows the Company’s stockholders’ equity balance as of March 31, 2017 as reported and on a pro forma basis as if the Company completed the offering described above as of March 31, 2017.

		As of March 31, 2017
		As reported				Net proceeds from April 2017 offering				Pro forma
Total stockholders’ equity		$	5,828,000			$	219,000			$	6,047,000