Quarterly report pursuant to Section 13 or 15(d)

Share Holders Equity (Deficit)

v3.19.3
Share Holders Equity (Deficit)
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Share Holders Equity (Deficit) SHARE HOLDERS EQUITY (DEFICIT)
2018 Stock Offerings
On June 22, 2017, the Company entered into an at the market issuance sales agreement with Cowen and Company, LLC (“Cowen”) under which the Company may offer and sell shares of its Common Stock having an aggregate offering price of up to $25 million. For the nine months ended September 30, 2019 and 2018, the Company issued 1,609,373 and 1,794,621 shares under this agreement for net proceeds of approximately $1.5 million and $3.7 million, respectively. This agreement was canceled in the first quarter of 2019.
On April 26, 2018, the Company closed Subscription Agreements with accredited investors (the “April 2018 Accredited Investors”) who purchased 531,066 shares of the Company’s common stock for a purchase price of $1.4 million or $2.72 per share. Stephen Burns, Benjamin Samuels, Gerald Budde and Julio Rodriguez, executive officers and/or directors of the Company at the time of the offering, participated in this offering.
On June 4, 2018, the Company and holders of all outstanding Warrants to Purchase Common Stock of the Company issued on September 18, 2017 (collectively, the “Warrants”) entered into exchange agreements, pursuant to which the Company issued 1,968,736 shares of the Company’s common stock in exchange for the Warrants. In the second quarter of 2018, the “Down Round” feature of the Warrants was triggered, causing the strike price to decrease from $3.80 per share to $2.62 per share. As a result, the Company recorded a deemed dividend of $765,179 which represents the fair value transferred to the Warrant holders from the Down Round feature being triggered. The deemed dividend was recorded as a reduction of Retained Earnings and increase in Additional Paid-in-Capital and increased the net loss to common shareholders by the same amount.
On August 9, 2018, the Company entered into an Underwriting Agreement with National Securities Corporation (the "Underwriter"), for the public offering of 9,000,000 shares of our Common Stock at a price per share of $1.15 for net proceeds of $9.6 million. On August 14, 2018, the Underwriter exercised its over-allotment option and sold an additional 1,288,800 shares of Common Stock at a price per share of $1.15 for net proceeds of $1.4 million.

2019 Stock Offerings
In February 2019, the Company sold 1,616,683 shares of common stock to investors (the “February 2019 Investors”) for net proceeds of $1.5 million. Through July 2019, if the Company issued shares of its common stock for a price per share less than the price paid by the February 2019 Investors (a “Down Round”), the Company was required to issue additional shares of common stock (for no additional consideration) such that the effective purchase price per share is equal to the purchase price per share paid in the Down Round. On May 1, 2019 the Down Round provision of the agreement was triggered and an additional 116,496 shares of common stock were issued to the February 2019 Investors. The issuance of the additional shares was accounted for as a $86,207 deemed dividend. The deemed dividend was recorded as a reduction of Retained Earnings and increase in Additional Paid-in-Capital and increased the net loss to common shareholders by the same amount.
Benjamin Samuels and Gerald Budde, directors of the Company, acquired 841,928 and 26,310 shares of common stock, respectively, as part of the February 2019 offering at a price per share of $0.9501, which was above the closing price the date prior to close. They did not receive the Down Round protection.
On May 1, 2019, the Company closed a registered public offering for the sale of 3,957,432 shares of Common Stock for a purchase price of $0.74 per share. The net proceeds to the Company were approximately $2.9 million.
Warrants
In connection with the issuance of debt and preferred stock, the Company has issued warrants to purchase shares of the Company's Common Stock. The following table summarizes warrant activity for the period:
Number of Warrants Weighted Average Exercise Price per Warrant Weighted Average Remaining Exercise Term in Months
Balance, December 31, 2018 17,818,844    $ 1.84    52
Granted, Series B Preferred Stock 9,262,500    1.62    48
Granted, Marathon debt 1,840,275    1.40    60
Exercised —   
Balance, September 30, 2019 28,921,619    $ 1.74    49