Note 13—Subsequent Event
On December 17, 2012, the Company closed a private placement whereby it issued an aggregate of 28,800,000 shares of the Company’s common stock at a purchase price of $0.25 per share, and warrants to purchase an aggregate of 14,400,000 shares of the Company’s common stock, for proceeds to the Company of $7.2 million (the “December 2012 Private Placement”). After deducting for fees and expenses, the aggregate net proceeds from the sale of the common stock and the warrants in the December 2012 Private Placement were approximately $6.5 million.
Pursuant to the terms of the Securities Purchase Agreement, each investor was issued a warrant to purchase up to a number of shares of the Company’s common stock equal to 50% of the shares issued to such investor. The warrants have an exercise price of $0.26 per share, are exercisable immediately upon issuance and have a term of exercise equal to four years.
In addition, pursuant to the terms of a placement agent agreement entered into with the lead placement agent, the Company agreed to pay the placement agent and certain financial advisors to the Company fees equal to 6% of the aggregate gross proceeds raised in the private placement of $432,000 and reimbursement to the lead placement agent for certain expenses in an amount equal to 1% of the aggregate gross proceeds raised in the private placement of $72,000. In connection with the agreement, the Company also issued to the placement agent and financial advisors warrants to purchase 5% of the aggregate common stock issued in the December 2012 Private Placement, or a total of 1,440,000 shares of common stock.