NOTE 12—SUBSEQUENT EVENTS

On August 1, 2016, the Company entered into a securities purchase agreement with several institutional and individual investors, and certain of its directors and officers, under which the Company agreed to sell an aggregate of 88,494 unregistered shares of its convertible preferred stock at the price of $113.00 per share, and warrants to purchase up to an aggregate of 2,035,398 unregistered shares of its common stock at an exercise price of $2.00 per share.  Each share of preferred stock will initially be convertible into 100 shares of common stock, reflecting a conversion price equal to $1.13, the closing price of the Company’s common stock quoted on NASDAQ on July 29, 2016. The warrants become exercisable on February 8, 2017, six months after the closing of the private placement, and have a term of five years from the date of issuance. Following the closing, the Company will be required to hold a meeting of its stockholders in order to, among other things, satisfy NASDAQ requirements with respect to the issuance of common stock upon conversion of the convertible preferred stock and exercise of the warrants.  The conversion of the preferred stock will occur automatically upon receipt of such stockholder approval.  In addition, the Company agreed to use commercially reasonable efforts to file, within 30 days following receipt of the stockholder approval, a registration statement with the Securities and Exchange Commission to register the resale of the shares of common stock underlying the preferred stock and warrants.