Annual report pursuant to section 13 and 15(d)

COMMON STOCK

v2.4.0.6
COMMON STOCK
 12 Months Ended
Dec. 31, 2012
COMMON STOCK
9. COMMON STOCK:

Common stock – At December 31, 2012, the Company has reserved common stock for issuance in relation to the following:

 

Employee stock options

      1,087,973   

Shares subject to warrants

      485,953   

Shares subject to Series B preferred stock

      153   

Shares subject to Series C preferred stock

      14,515,895   

Shares subject to Series C preferred stock accrued dividends as of December 31, 2012

      44,354   

Shares subject to Series D preferred stock

      1,712,171   

The Company is required to issue additional shares of common stock upon conversion of the Series C preferred stock if a liquidity event occurs (Note 8).

In addition, for so long as shares of the Series B, Series C and/or Series E (Note 17) preferred stock are outstanding, the Company is prohibited from declaring dividends without the consent of the holders of at least a majority of the then outstanding Series B, Series C and Series E preferred stock.

 

Stock warrants – The Company has 485,953 warrants outstanding in connection with the transactions described below.

The Company has granted a 10-year warrant (“Kingstone Warrants”) for 289,187 shares of common stock at an exercise price of $4.30 per share to Brett Kingstone. Mr. Kingstone was the chief executive officer of the Company until December 31, 2005 and was the chairman of the board of the Company until March 11, 2009. The warrant was granted on September 9, 2005.

In conjunction with a Note and Warrant Purchase Agreement that the Company entered into on June 18, 2009, the Company issued 196,766 warrants (the “2009 Note Warrants”) on February 25, 2010. The warrants were immediately exercisable at an exercise price of $6.43 per share and expired unexercised in February 2013.

The total number of shares under warrants to purchase common stock as of December 31, 2012 is listed in the table below:

 

Associated Transaction

    Number of
Warrants		  

Kingstone Warrants

      289,187   

2009 Note Warrants

      196,766   
  

 

 

  

Total Shares Subject to Warrants

      485,953