Note 12 - Subsequent Events

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Subsequent Events [Text Block]

12. Subsequent events

On

November 1, 2017

the Company held a Special Shareholders meeting, requesting shareholders, both common and Series A, to approve a proposed amendment to the Company’s Certificate of Incorporation to permit the Company to pay dividends on the Company’s Series A Convertible Preferred Stock in either cash or shares of the Company’s Common Stock, which was approved by the shareholders. As a result of this amendment, the Company is able to assert there will be sufficient authorized shares available to settle the Series A warrants. Upon this assertion, the Series A warrants were reclassified from liabilities to stockholders’ equity. Prior to the amendment, for accounting purposes, the warrants were recorded as a liability under U.S. generally accepted accounting principles. The warrant liability resulted in a reduction of our stockholders’ equity, as of

March 31, 2017

and

June 30, 2017,

below the required level under the Nasdaq Capital Market’s continued listing standards. The Charter Amendment, by permitting the Company to assert share settlement of the warrants, resulted in a reclassification of the warrant liability to stockholders’ equity as of the date of the amendment.

It is therefore the belief of the Company that this fundamental change will allow the Company to regain its N

ASDAQ

compliant status. The following pro-forma information shows adjustments to the

September 30, 2017

balances to (i) remove the Series A warrant liability of

$16.3

million as of

September 30, 2017

from total liabilities, (ii) show the reclassification of the fair value of the Series A warrants of

$13.2

million as of

November 1, 2017

to APIC, and (iii) to adjust the accumulated deficit balance for the change in fair value of the Series A warrants from

September 30, 2017

to

November 1, 2017

of

$3.2

million.

	As of September 30, 2017
	Actual			Adjustments				Pro-forma
Total assets	$	28,327,243		$	—			$	28,327,243
Total liabilities		21,970,547			(16,316,054	)	(i)		5,654,493
Convertible preferred stock		—			—				—
Stockholders' equity
Common stock		14,504			—				14,504
Additional paid-in-capital		69,686,744			13,153,524		(ii)		82,840,268
Accumulated deficit		(63,344,552	)		3,162,530		(iii)		(60,182,022	)
Total stockholders' equity		6,356,696			16,316,054				22,672,750
Total liabilities, convertible preferred stock and stockholders' equity	$	28,327,243		$	—			$	28,327,243