| STOCKHOLDERS' EQUITY |
NOTE 10 – STOCKHOLDERS' EQUITY
Warrants
There were warrants to purchase a total of 35,733,943 shares of common stock outstanding at December 31, 2012. All warrants were exercisable at December 31, 2012. The warrants had various exercise prices and terms as follows:
| |
Warrants |
|
|
Exercise |
|
Expiration |
| Summary of Warrants |
|
Outstanding |
|
|
Price |
|
Date |
2012 Series B private placement (a) |
20,000,000 |
|
$ |
0.50 |
|
10/24/18 |
2012 investor relations advisor (b) |
30,000 |
|
|
1.77 |
|
4/19/14 |
2011 November private placement (c) |
2,144,656 |
|
|
1.67 |
|
5/10&30/14 |
2011 November private placement (c) |
2,144,656 |
|
|
2.00 |
|
11/10&30/16 |
2011 November placement agent warrants (c) |
36,893 |
|
|
1.67&2.00 |
|
11/10&30/16 |
2011 investor relations advisor (d) |
12,500 |
|
|
2.30 |
|
4/15/14 |
2010 December registered direct offering (e) |
930,664 |
|
|
3.06 |
|
12/14/15 |
2010 January registered direct offering (f) |
1,041,432 |
|
|
3.00 |
|
1/26/15 |
2010 January placement agent warrants (f) |
125,109 |
|
|
3.75 |
|
1/26/15 |
2010 investor relations advisor (g) |
60,000 |
|
|
2.16 |
|
10/1/13 |
2010 investor relations advisor (h) |
55,000 |
|
|
2.63 |
|
10/14/13 |
2009 investor relations advisor (i) |
25,000 |
|
|
3.50 |
|
11/4/14 |
2009 business consultant (j) |
60,000 |
|
|
2.07 |
|
7/23/14 |
2008 preferred stock offering (k) |
499,584 |
|
|
0.50 |
|
2/24/14 |
2008 Somanta accounts payable (l) |
246,753 |
|
|
3.50 |
|
1/4/14 |
2008 investor relations advisor (m) |
50,000 |
|
|
3.15 |
|
1/3/13 |
2008 investor relations advisor (n) |
40,000 |
|
|
3.00 |
|
9/1/13 |
2007 preferred stock offering (o) |
3,649,880 |
|
|
0.50 |
|
11/10/13 |
2006 convertible note (p) |
3,818,180 |
|
|
1.32 |
|
2/16/15 |
2006 convertible note (p) |
386,364 |
|
|
1.32 |
|
10/24/15 |
2006 convertible note (p) |
377,272 |
|
|
1.32 |
|
12/6/15 |
Total |
35,733,943 |
|
|
|
|
|
a) |
In connection with a private placement offering on October 25, 2012, warrants to purchase 20,000,000 shares of common stock at $0.50 per share were issued. All of the warrants are exercisable immediately and expire on October 24, 2018. |
b) |
During 2012, an investor relations advisor received warrants to purchase 30,000 shares of common stock at an exercise price of $1.77 per share exercisable at any time until April 19, 2014, for investor relations consulting services rendered in 2012. The expense recorded for the year ended December 31, 2012 was $10,000. |
c) |
In connection with a private placement offering on November 10 and 30, 2011, warrants to purchase 2,144,656 shares of common stock at $1.67 per share were issued. All of the warrants are exercisable immediately and 1,857,156 warrants expire May 10, 2014 and 287,500 warrants expire May 30, 2014. |
In connection with a private placement offering on November 10 and 30, 2011, additional warrants to purchase 2,144,656 shares of common stock at $2.00 per share were issued. All of the warrants are exercisable immediately and 1,857,156 warrants expire November 10, 2016 and 287,500 warrants expire November 30, 2016.
Also in connection with a private placement offering on November 10 and 30, 2011, placement agent warrants to purchase 18,447 shares of common stock at $1.67 per share were issued. Also in connection with a private placement offering on November 10 and 30, 2011, placement agent warrants to purchase 18,446 shares of common stock at $2.00 per share were issued. All the placement agent warrants are exercisable immediately and 18,447 warrants expire November 10, 2016 and 18,446 warrants expire November 30, 2016.
d) |
During 2011, an investor relations advisor received warrants to purchase 12,500 shares of common stock at an exercise price of $2.30 per share at any time until April 15, 2014, for investor relations consulting services rendered in 2011. The expense recorded for the year ended December 31, 2011 was $17,000. |
e) |
In connection with a registered direct offering on December 14, 2010, warrants to purchase 930,664 shares of common stock at $3.06 per share were issued. All of the warrants are exercisable immediately and expire December 14, 2015. |
f) |
In connection with a registered direct offering on January 26, 2010, warrants to purchase 1,041,432 shares of common stock at $3.00 per share were issued. All of the warrants are exercisable immediately and expire January 26, 2015. |
In addition, we issued warrants for placement agent fees to purchase 125,109 shares of our common stock at an exercise price of $3.75 per share. All of the warrants are exercisable immediately and expire January 26, 2015.
g) |
During 2010, an investor relations advisor received warrants to purchase 194,000 shares of common stock at an exercise price of $2.16 per share for investor relations consulting services rendered in 2010 and 2011. Our common stock did not reach a target price by February 28, 2011 and according to the agreement 134,000 warrants expired and no further expense was recorded. Warrants to purchase 60,000 shares of common stock are exercisable and outstanding at December 31, 2011 and expire October 1, 2013. |
h) |
During 2010, an investor relations advisor received warrants to purchase 55,000 shares of common stock at an exercise price of $2.63 per share at any time until October 14, 2013, for investor relations consulting services rendered in 2010. |
i) |
During 2010, an investor relations advisor received warrants to purchase 25,000 shares of common stock at an exercise price of $3.50 per share at any time until November 4, 2014, for investor relations consulting services rendered in 2010. |
j) |
During 2009, a business consultant received warrants to purchase 150,000 shares of common stock at an exercise price of $2.07 per share at any time until July 23, 2014, for business consulting services rendered in 2009. 60,000 of the warrants were exercisable on December 31, 2011. The remaining 90,000 warrants expired July 23, 2010 because our stock did not reach specified trading prices. |
k) |
In connection with the preferred stock offering in February 2008, warrants to purchase a total of 499,584 shares of common stock were issued. All of the warrants are exercisable immediately and expire February 24, 2014. The fair value of the warrants was $2.29 per share on the date of the grant using the Black-Scholes pricing model with the following assumptions: expected dividend yield 0.0%, risk-free interest rate 2.75%, expected volatility 110% and a term of 6 years. The exercise price of $3.50 was decreased to $3.00 after the January 2010 placement; to $2.55 after the December 2010 placement; to $1.45 after the November 2011 placement; and, to $0.50 after the October 2012 placement. |
l) |
In connection with our acquisition of Somanta Pharmaceuticals, Inc. (Somanta) we exchanged for $1,576,000 due to Somanta vendors, for 538,508 shares of our common stock and warrants to purchase 246,753 shares of common stock at $3.50. The warrants expire January 4, 2014. |
m) |
During 2008, an investor relations advisor received warrants to purchase 50,000 shares of common stock at an exercise price of $3.15 per share at any time until January 3, 2013, for investor relations consulting services rendered in 2008. |
n) |
During 2008, an investor relations advisor received warrants to purchase 40,000 shares of common stock at an exercise price of $3.00 per share at any time until September 1, 2013, for investor relations consulting services. All of the warrants are exercisable. |
o) |
In connection with the preferred stock offering in November 2007, warrants to purchase a total of 3,649,880 shares of common stock were issued. All of the warrants are exercisable immediately and expire six years from date of issue. The fair value of the warrants was $2.50 per share on the date of the grant using the Black-Scholes pricing model with the following assumptions: expected dividend yield 0.0%, risk-free interest rate 3.84%, expected volatility 114% and a term of 6 years. The exercise price of $3.50 was decreased to $3.00 after the January 2010 placement; to $2.55 after the December 2010 placement; to $1.45 after the November 2011 placement; and, to $0.50 after the October 2012 placement. |
p) |
In connection with the convertible note offerings in 2006, warrants to purchase a total of 4,581,816 shares of common stock at $1.32 per share were issued. All of the warrants are exercisable immediately and expire six years from date of issue. On February 10, 2012 these warrants were extended an additional three years. |
2011 Private Placement Offering – New Common Stock and Warrants
On November 10 and 30, 2011, we completed the sale of 4,289,312 shares of our common stock and two and one half year warrants to purchase 2,144,656 shares of our common stock at an exercise price of $1.67 per share and five year warrants to purchase 2,144,656 shares of our common stock at an exercise price of $2.00 per share for an aggregate purchase price of $6.2 million. Proceeds, net of cash issuance costs from the sale, were $5.8 million.
In connection with the sale we issued warrants for placement agent fees to purchase 18,447 shares of common stock at $1.67 per share and 18,446 shares of common stock at $2.00 per share. All of the warrants are exercisable immediately and expire five years from the date of issue.
2012 Warrant Adjustments
On February 10, 2012, we entered into amendment agreements for 4,581,816 currently outstanding warrants which extended the expiration dates of such warrants to February 16, 2015 for 3,818,180 warrants; to October 24, 2015 for 386,364 warrants; and to December 6, 2015 for 377,272 warrants. The holders of such warrants are SCO Capital Partners LLC, Lake End Capital LLC and Beach Capital LLC. These holders may be deemed to be affiliates of Jeffrey B. Davis and Steven H. Rouhandeh, our Chief Executive Officer and a director, respectively, as well as other un-affiliated warrant holders. The warrants that were amended were for the purchase of an aggregate of 4,581,816 shares of our common stock. In connection with the amendments, the holders of such warrants agreed to waive any damages that they may have incurred relating to the Company's inability to register the shares of common stock issuable upon exercise of the warrants, other than liquidated damages that may have already accrued relating to such inability to register such shares.
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