Annual report pursuant to Section 13 and 15(d)

Common Stock Transactions

v3.3.0.814
Common Stock Transactions
12 Months Ended
Jul. 31, 2015
Other Equity and Common Stock Transactions  
Common Stock Transactions

Note 8—Common Stock Transactions

 

Reverse Stock Split

 

On May 18, 2015, the Company effected a 1-for-20 reverse stock split. As a result, the accompanying consolidated financial statements for the annual prior periods presented have been retroactively adjusted to reflect the effects of the reverse stock split.

 

June 2015 Public Offering

 

On June 8, 2015, the Company closed a registered direct public offering of an aggregate of 2,469,091 shares of the Company’s common stock at a purchase price of $5.50 per share, for gross proceeds to us of approximately $13.6 million (the “June 2015 Public Offering”). After deducting for fees and expenses, the aggregate net proceeds from the sale of the common stock in the June 2015 Public Offering were approximately $12.5 million.  In connection with the June 2015 Public Offering, the Company paid placement agent fees consisting of (i) a cash fee equal to 6% of the gross proceeds of the offering, as well as a non-accountable expense allowance equal to 1% of the gross proceeds and (ii) warrants to purchase up to an aggregate of 5% of the aggregate number of shares of common stock sold in the offering, or 123,455 shares of the Company’s common stock (the “June 2015 Placement Agent Warrants”).  The June 2015 Placement Agent Warrants will be exercisable at $6.88 per share as of December 8, 2015 and will expire on May 12, 2019. The fair value of the June 2015 Placement Agent Warrants was $571,868 (based on the Black-Scholes Option Pricing Model assuming no dividend yield, volatility of 88.40% and a risk free interest rate of 1.72%) and was recorded as an offering cost. The June 2015 Placement Agent Warrants and the shares of the Company’s common stock underlying the June 2015 Placement Agent Warrants have not been registered under the Securities Act. The Company completed an evaluation of the June 2015 Placement Agent warrants issued and determined the warrants should be classified as equity within the balance sheet.

 

June 2014 Public Offering

 

On June 6, 2014, the Company closed a registered public offering of an aggregate of 1,126,761 shares of the Company’s common stock and warrants to purchase an aggregate of 394,367 shares of common stock for gross proceeds to the Company of approximately $16.0 million (the “June 2014 Public Offering”).  After deducting for fees and expenses, the aggregate net proceeds from the sale of the common stock and the warrants to the purchasers in the June 2014 Public Offering were approximately $14.9 million.  In connection with the June 2014 Public Offering, the Company paid placement agent and financial advisory fees equal to 6% of the gross proceeds of the June 2014 Public Offering, as well as a non-accountable expense allowance equal to 1% of the gross proceeds of the June 2014 Public Offering and an accountable legal expense reimbursement of $25,000.  In addition, the Company agreed to issue warrants to purchase an aggregate of up to 6% of the aggregate number of shares of Common Stock sold in the June 2014 Public Offering to the placement agent or its designees (the “June 2014 Placement Agent Warrants”).  The June 2014 Placement Agent Warrants have substantially the same terms as the warrants issued to the purchasers in the June 2014 Public Offering, except that such warrants shall expire on May 12, 2019. The fair value of the June 2014 Placement Agent Warrants was $631,707 (based on the Black-Scholes Option Pricing Model assuming no dividend yield, volatility of 90.30% and a risk free interest rate of 1.53%), and was recorded as an offering cost. The June 2014 Placement Agent Warrants and the shares of the Company’s common stock underlying the June 2014 Placement Agent Warrants have not been registered under the Securities Act.

 

The fair value of the warrants issued the purchasers in connection with the June 2014 Public Offering, based on their fair value relative to the common stock issued, was $2,756,979 (based on the Black-Scholes Option Pricing Model assuming no dividend yield, volatility of 90.30%, and a risk-free interest rate of 1.53%).  The Company completed an evaluation of all of the warrants issued to the purchasers and determined the warrants should be classified as equity within the consolidated balance sheet.

 

September 2013 Public Offering

 

On September 18, 2013, the Company closed a registered public offering of an aggregate of 2,389,600 shares of the Company’s common stock and warrants to purchase an aggregate of 1,194,800 shares of common stock for gross proceeds to the Company of approximately $11.95 million (the “September 2013 Public Offering”). After deducting for fees and expenses, the aggregate net proceeds from the sale of the common stock and the warrants in the September 2013 Public Offering were approximately $11.1 million.

 

Pursuant to the terms of the securities purchase agreement, at the closing each purchaser 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 purchaser in the offering.  The warrants have an exercise price of $7.00 per share, are exercisable immediately upon issuance and have a term of exercise equal to four years from the date of issuance of the warrants, or September 18, 2017.

 

In connection with the September 13, 2013 Public Offering, the Company agreed to pay an aggregate cash fee for placement agent and financial advisory services equal to 6% of the gross proceeds of the offering, as well as a non-accountable expense allowance equal to 1% of the gross proceeds of the offering. In addition, the Company agreed to issue warrants to purchase an aggregate of up to 5% of the aggregate number of shares of Common Stock sold in the offering, or 119,480, to the placement agent or its designees (the “September 2013 Placement Agent Warrants”). The September 2013 Placement Agent Warrants have substantially the same terms as the warrants issued to the purchasers in the offering, except that such warrants have an exercise price of $6.25 and shall expire on September 18, 2018.  The fair value of the September 2013 Placement Agent Warrants was $410,535 (based on the Black-Scholes Option Pricing Model assuming no dividend yield, volatility of 94.57%, and a risk-free interest rate of 1.43%), and was recorded as an offering cost.  The September 2013 Placement Agent Warrants and the shares of the Company’s common stock underlying the September 2013 Placement Agent Warrants have not been registered under the Securities Act.The fair value of the warrants issued in connection with the September 2013 Public Offering to the purchasers, based on their fair value relative to the common stock issued, was $2,461,008 (based on the Black-Scholes Option Pricing Model assuming no dividend yield, volatility of 83.62%, and a risk-free interest rate of 1.43%).  The Company completed an evaluation of all of the warrants issued in connection with this offering and determined the warrants should be classified as equity within the consolidated balance sheet.

 

Outstanding Warrants

 

At July 31, 2015, the Company had outstanding warrants to purchase 1,895,102 shares of common stock, with exercise prices ranging from $5.20 to $24.00, all of which were classified as equity instruments.  These warrants expire at various times between March 2016 and June 2019.

 

Dividends

 

The Company has not adopted any policy regarding payment of dividends and no dividends have been paid during the periods presented.