Note 14 – Subsequent Events

From December 5 through December 20, 2017, the Company conducted private equity offerings, in which accredited investors purchased unregistered common stock at $0.50 per share with warrant coverage of 100%, based on the number of shares of common stock purchased. Pursuant to the offerings, the Company sold a total of 2,948,666 shares of common stock for aggregate gross proceeds of approximately $1.5 million and issued warrants covering an aggregate of 2,948,666 shares of common stock with a five-year term and an exercise price of $0.75 per share. In connection with the offerings, the placement agent received warrants covering 243,667 shares (or 10% of total shares sold to investors) with an exercise price of $0.55 per share.

On December 21, 2017, the Company extended the expiration date for the warrant tender Offer, as fully described in Note 6 above, to January 26, 2018.

The Tax Cuts and Jobs Act (“TCJA”) was enacted into law on December 22, 2017 (the enactment date). The corporate tax rate will be reduced to 21% from 35% for tax years beginning after December 31, 2017. This will affect the value of the Company’s deferred tax asset and related valuation allowance. However, the Company’s deferred tax asset has a full valuation allowance. The TCJA also limits net operating loss carryforwards (“NOLs”) arising in tax years beginning after December 31, 2017, however, existing NOLs that arose in years prior to December 31, 2017 are not affected by the TCJA. The Company is currently evaluating the TCJA and its potential effects on its financial statements.

On December 29, 2017, the Company conducted a private equity offering, in which accredited investors purchased unregistered common stock at $0.50 per share with warrant coverage of 100%, based on the number of shares of common stock purchased. Pursuant to the offering, the Company sold a total of 1,777,638 shares of common stock for aggregate gross proceeds of approximately $0.9 million and issued warrants covering an aggregate of 1,777,638 shares of common stock with a five-year term and an exercise price of $0.75 per share. In connection with the offerings, the placement agent received warrants covering 177,764 shares (or 10% of total shares sold to investors) with an exercise price of $0.55 per share.