STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Stockholders Equity Note Disclosure [Text Block]

NOTE 8 — STOCKHOLDERS’ EQUITY

August 2015 Warrants

As a result of the Series B Preferred Stock having a floor price of $1.20 in the February 2016 offering, the exercise price of the unexercised Series A warrants remaining from the August 2015 Financing was adjusted to $1.20. On April 29, 2016, the Company entered into additional amendments with certain holders of the Series A warrants to reduce the exercise price to between $0.60 and $0.84. From February 29, 2016 to June 30, 2016, 496,462 of the Series A Warrants were exercised into 496,462 shares of the Company’s common stock. The Company received $367,000 in gross proceeds from the exercise. At the time the Company modifies an exercise price, the warrant liabilities are marked to market with the resulting change in fair value included in change in fair value of derivative liabilities on the condensed consolidated statement of operations.

February 2016 Warrants

On April 29, 2016, the Company entered into amendments with certain holders of the February warrants to reduce the exercise price to $0.84. From April 1, 2016 to June 30, 2016, 148,196 of the warrants issued in connection with the February 2016 financing, have been exercised into 148,195 shares of common stock. The Company received $125,000 in gross proceeds from the exercise. At the time the Company modifies an exercise price, the warrant liabilities are marked to market with the resulting change in fair value included in change in fair value of derivative liabilities on the condensed consolidated statement of operations.

May 2016 Financing

On May 16, 2016, the Company closed an offering of units in which the Company offered 1,166,667 Units, at a price of $0.84 per Unit, each consisting of one share of common stock, par value $0.00001 per share, and one warrant to purchase one share of common stock at an exercise price of $1.3788 per share. The Company received approximately $980,000 in gross proceeds from the offering, before deducting placement agent fees and offering expenses of $187,000. Roth Capital Partners acted as sole placement agent for the offering. The Warrants will be exercisable beginning on November 16, 2016 at an exercise price of $1.3788 per share. The Warrants will expire on the fifth (5th) anniversary of the initial date of issuance.

As discussed in Note 9, the warrants issued in the May 2016 Financing contain provisions whereby the holder can net cash settle upon certain events occurring at the Company. As such, the warrants were recorded by the Company as derivative liabilities upon completion of the May 2016 Financing. Of the total gross proceeds, $826,000 were recorded as derivative liabilities and $154,000 were recorded within stockholders’ equity at the date of issuance. Of the total aggregate costs of the offering, $158,000 were included in other expense on the condensed consolidated statements of operations for the three and six months ended June 30, 2016 and $29,000 were recorded as a reduction to stockholders’ equity.

Conversions of 8% Notes

During the six months ended June 30, 2016, the holders of the 8% Convertible notes converted $250,000 principal into 150,790 shares of common stock.

Conversion of April 2016 Notes

As of June 30, 2016, the holders of the April 2016 Convertible notes converted $215,000 principal into 242,420 shares of common stock.

Other Common Stock Issuances

During the six months ended June 30, 2016, the Company issued a total of 818,942 shares of common stock having a fair value to employees, directors, consultants and general counsel in lieu of paying $1,020,000 worth of services.

Warrants and Options

During the three and six months ended June 30, 2016, the Company recorded $82,000 and $182,000 as stock compensation expense from the amortization of stock options issued in prior periods. During the three and six months ended June 30, 2015, the Company recorded $145,000 and $278,000 as stock compensation expense from the amortization of stock options issued in prior periods.

The Company has issued warrants and options outside of the equity incentive plans. A summary of the warrant and option activity is as follows:

	Number of Warrants		Weighted Average
	and Options (in Shares)		Exercise Price
Outstanding January 1, 2016		776,879	$	80.04
Granted		1,314,865		1.32
Exercised		(644,658)		0.48
Forfeited or Expired		(11,198)		2,266.34
Outstanding, June 30, 2016		1,435,888		26.62
Exercisable, June 30, 2016		260,993	$	138.88