|6 Months Ended|
Jun. 30, 2017
|Subsequent Events [Abstract]|
12. Subsequent Event
On July 25, 2017, the Company completed the second closing of the Preferred Stock Financing (See Note 11). The Company received gross proceeds of approximately $1,698,000, which was the balance of the Preferred Stock Financing. The full $3,000,000 of Preferred Stock is convertible into twelve million shares of the Company’s common stock, based on a fixed conversion price of $0.25 per share on an as-converted basis. In addition, the Company issued warrants to purchase an aggregate of 6,024,124 shares of common stock at the second closing. The warrants have a term of seven years from the date of issuance are non-exercisable until six months after issuance, and have an exercise price of $0.31 per share.
On July 27, 2017, the Company entered into an agreement to amend the warrants issued in connection with the Preferred Stock Financing to provide notification and objection requirements with respect to the change of control provisions. The change of control provisions in the warrants had previously caused the warrants to be treated as a derivative liability as opposed to being treated as equity on the Company’s balance sheet. The warrants have been replaced by amended and restated warrants containing such notification and objection requirements (the “Amended and Restated Common Stock Purchase Warrants”) so that the Amended and Restated Common Stock Purchase Warrants will be treated as equity on the Company’s balance sheet. All other terms of the original warrants remain unchanged by the Amended and Restated Common Stock Purchase Warrants.
The pro forma information set forth below is illustrative only and represents the effect of the reclassification of the Amended and Restated Common Stock Purchase Warrants to equity, as if these warrants had been amended as of June 30, 2017:
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef