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Subsequent Events
12 Months Ended
Dec. 31, 2015
Subsequent Events.  
Subsequent Events

 

25.Subsequent Events

 

Stockholder approval of Sentient Note Conversion and Warrant Exercise Price Adjustment

 

Subsequent to December 31, 2015 the Company’s stockholders approved, at a special meeting of the stockholders held on January 19, 2016, the issuance of shares of the Company’s common stock upon conversion of the Sentient Note (see Note 11).

 

Pursuant to certain dilution adjustment provisions in the warrant agreements governing the September 2012 and 2014 Warrants, the exercise price of the warrants was adjusted downward as a result of stockholder approval of the convertibility of the Sentient Note.  At January 19, 2016, the date of the stockholders’ approval, the lowest conversion price determinable for the Sentient Note, pursuant to the terms of the Sentient Note, was $0.29, a price equal to 90 percent of the 15-day VWAP for the period immediately preceding the Loan closing date of October 27, 2015.  As a result, effective January 19, 2016, the number of shares of common stock issuable upon exercise of the September 2012 Warrants was increased from 4,031,409 shares to 5,084,193 shares (1,052,784 share increase) and the exercise price was reduced from $7.17 per share to $5.68 per share.  The number of shares of common stock issuable upon exercise of the September 2014 Warrants was increased from 4,746,000 shares to 5,108,347 shares (362,347 share increase) and the exercise price was reduced from $1.21 per share to $1.01 per share.

 

Conversion of Sentient Note and Warrant Exercise Price Adjustment

 

Also subsequent to December 31, 2015, on February 11, 2016, Sentient converted approximately $3.9 million of principal and $0.1 million of accrued interest (representing the total amount of accrued interest at the conversion date) pursuant to the Sentient Note into 23,335,000 shares of the Company’s common stock at an exercise price of approximately $0.172 per share, reflecting 90% of the 15-day VWAP immediately preceding the conversion date.  Following the conversion, approximately $1.1 million of principal remained outstanding.  If the remaining principal and additional accrued interest from February 11, 2016 is not converted into the Company’s common stock, the Company would owe approximately $1.2 million to Sentient on the October 27, 2016 maturity date.

 

As a result ofthe Sentient Note conversion on February 11, 2016, the number of shares of common stock issuable upon exercise of the September 2012 Warrants was increased pursuant to applicable anti-dilution provisions from 5,084,193 shares to 5,677,757 shares (593,564 share increase) and the exercise price was reduced from $5.68 per share to $5.09 per share.  The number of shares of common stock issuable upon exercise of the September 2014 Warrants was increased from 5,108,347 shares to 5,365,983 shares (257,636 share increase) and the exercise price was reduced from $1.01 per share to $0.91 per share.

 

If all or a portion of the remaining principal and interest under the Sentient Loan is converted at a lower conversion price than the February 11 $0.172 conversion price, the number of shares of common stock issuable upon exercise of the warrants would be further increased and the exercise price of the 2012 and 2014 Warrants would be further decreased.