NOTE 5 – EQUITY

Public Offering

On December 7, 2016, the Company entered into a securities purchase agreement with various purchasers pursuant to which the Company issued and sold to the purchasers in a registered offering an aggregate of 3,885,000 shares of its common stock, together with Series A common stock purchase warrants (“Series A Warrants”) exercisable for up to an aggregate of 1,942,501 shares of common stock and Series B common stock purchase warrants (“Series B Warrants”) exercisable for up to an aggregate of 3,885,000 shares of common stock. The offering closed on December 13, 2016 and the Company received net proceeds of approximately $6.8 million, after deducting placement agent fees and offering expenses payable by the Company.

The Series A Warrant has an exercise price of $2.75 per share and the Series B Warrant has an exercise price of $3.00 per share. The Series A Warrants are immediately exercisable and will expire on the five year anniversary of the date of issuance. The Series B Warrants are immediately exercisable and will expire on the six month anniversary of the date of issuance.

Common Stock Warrants

Below is a table summarizing the warrants issued and outstanding as of December 31, 2016 (“Price” reflects the weighted average exercise price per share):

Stock Based Compensation

The Company’s Consolidated 2016 Stock Plan (“the Plan”) provides for granting stock options and restricted stock awards to employees, directors and consultants of the Company.

Warrants. During the three months ended December 31, 2016, the Company did not recognize any expense related to warrants granted as stock based compensation. As of December 31, 2016, there was no unamortized expense, and the warrants had no intrinsic value. Refer to the Common Stock Warrants table within this note for information regarding all outstanding warrants.

Options. During the three months ended December 31, 2016, the Company recognized $566,573 of expense related to options granted. Unamortized option expense as of December 31, 2016 for all options outstanding amounted to $1,950,631. The Company expects to recognize this compensation cost over a weighted-average period of .98 years.

Below is a table summarizing the Company’s activity for the three months ended December 31, 2016 (“Price” reflects the weighted average exercise price per share):

As of December 31, 2016, the outstanding options have no intrinsic value.

Restricted Stock. During the three months ended December 31, 2016, the Company recognized $440,052 of expense related to restricted stock awards. As of December 31, 2016, there was $729,581 of unamortized expense. The Company expects to recognize this compensation cost over a weighted-average period of 1.03 years.

Below is a table summarizing the Company’s activity for the three months ended December 31, 2016: