Subsequent Events

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

4. Subsequent Events

Private Placement of Preferred Shares and Warrants

On April 16, 2013, the Company closed on an offering in which the Company raised $5,000,000 in gross proceeds, before deducting placement agents’ fees and other offering expenses, in a private placement of 5,000 shares of the Company’s Series A Preferred Stock. The Series A Preferred Stock does not have a dividend right, nor does it have any preferences over the common stock, including liquidation rights. Subject to certain ownership limitations, shares of Series A Preferred Stock are convertible, at the option of the holder thereof, into an aggregate of up to 1,377,412 shares of the Company’s common stock. Also included in the offering were warrants to purchase common stock, as follows:

(A) Series A Warrants to purchase 1,377,412 shares of the Company’s common stock, which are exercisable immediately after issuance, have a five-year term and a per share exercise price of $3.40; and

(B) Series B Warrants to purchase 1,377,412 shares of the Company’s common stock, which are exercisable immediately after issuance, have a two-year term and a per share exercise price of $3.40.

At the closing, the Company also issued to its placement agent and related persons Series A Warrants to purchase 82,645 shares of the Company’s common stock. The Company’s placement agent is also entitled to receive Series A Warrants to purchase up to an additional 82,645 shares of the Company’s common stock if the Series B Warrants are exercised for cash.

The warrants contain limitations that prevent the holders of the warrants from acquiring shares upon exercise of a warrant that would result in the number of shares beneficially owned by it and its affiliates exceeding 9.99% of the total number of shares of the Company’s common stock then issued and outstanding. In addition, upon certain changes in control of the Company, the holder of shares of Series A Preferred Stock or a Series A or Series B warrant can elect to receive, subject to certain limitations and assumptions, securities in a successor entity equal to the value of the warrant or if holders of common stock are given a choice of cash or property, then cash or property equal to the value of the outstanding warrants. In connection with the private placement, the Company filed a registration statement on Form S-3 on April 24, 2013, pursuant to the terms of a Registration Rights Agreement between the Company and the investors, to register the shares of common stock issuable upon conversion of the Series A Preferred Stock and upon exercise of the Series A Warrants and the Series B Warrants.

Facility Lease

The company amended its current facility lease to extend the term to June 30, 2014 and adjust the base monthly rent starting July 1, 2013 to June 30, 2014 to $16,616.25. The lease is for a total of 5,275 square feet of office space located in South San Francisco, California.