15. Warrants

On March 22, 2013, SafeStitch entered into a stock purchase agreement (the “2013 Stock Purchase Agreement”) with approximately 17 investors (the “2013 PIPE Investors”) pursuant to which the 2013 PIPE Investors agreed to purchase an aggregate of approximately 12,100,000 shares of common stock at a price of $0.25 per share for aggregate consideration of approximately $3.0 million. Included in this private placement was the issuance of PIPE Warrants to purchase approximately 6,048,000 common shares, representing one warrant for every two common shares purchased, with an exercise price of $0.33 per share and five year expiration. Among the 2013 PIPE Investors purchasing Shares were related parties who purchased 6.4 million shares and received 3.2 million warrants. There were approximately 6 million warrants outstanding that were assumed as of the Merger. During the year ended December 31, 2013, 270,000 warrants were exercised.

On January 17, 2012, TransEnterix Surgical entered into the SVB-Oxford Loan and Security Agreement with Silicon Valley Bank (“SVB”) and Oxford Finance LLC (“Oxford”). Pursuant to this agreement, TransEnterix Surgical issued preferred stock warrants to SVB and Oxford on January 17, 2012 and December 21, 2012, respectively, to purchase shares of capital stock. The warrants expire 10 years from the issue date. The warrants were remeasured immediately prior to the Merger. As a result of the remeasurement, the Company recorded approximately $1.8 million of other expense in the accompanying statements of operations and other comprehensive income (loss). As of the Merger, the preferred stock warrants converted to common stock warrants, adjusted based on the Exchange Ratio of 1.1533, and the preferred stock warrant liability was reclassified to additional paid-in capital.

These warrants are exercisable for an aggregate of approximately 1,397,939 shares of common stock. During the year ended December 31, 2013, 698,967 warrants were exercised in a cashless transaction for 563,834 shares of common stock. The summary of warrant activity for the years ended December 31, 2012 and 2013 is as follows:

				Weighted
		Weighted		Average
		Average		Remaining		Weighted
	Number of	Exercise		Contractual		Average
	Warrants	Price		Life (in years)		Fair Value

Outstanding at January 1, 2012	-	$	-		-	$	-
Granted	1,397,939		0.29		9.1		0.11
Exercised	-		-		-		-
Expired/cancelled	-		-		-		-

Outstanding at December 31, 2012	1,397,939	$	0.29		9.1	$	0.09
Granted
Warrants assumed in merger with
SafeStitch	5,998,000		0.33		4.3		0.23
Exercised	(968,969)		0.29		-		1.05
Expired/cancelled	-		-		-		-

Outstanding at December 31, 2013	6,426,970	$	0.29		4.7	$	0.35

The aggregate intrinsic value of the preferred stock warrants in the above table was $8.7 million and $0 at December 31, 2013 and 2012, respectively. The aggregate intrinsic value is before applicable income taxes and is calculated based on the difference between the exercise price of the warrants and the estimated fair market value of the Company’s Series B-1 Preferred Stock as of the respective dates.