Annual report pursuant to Section 13 and 15(d)

Warrants to Purchase Common Stock

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Warrants to Purchase Common Stock
12 Months Ended
Dec. 31, 2016
Warrants to Purchase Common Stock  
Warrants to Purchase Common Stock
8. Warrants to Purchase Common Stock
 
On December 4, 2015, the Company issued a warrant to purchase up to an aggregate of 125,000 shares of common stock at an exercise price of $29.32 per share.  The warrant expires on the fifth anniversary of its issuance and had an initial fair value of $2,507,000 which is included in General and administrative expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2015. The warrant provides that if the Company declares a dividend, or makes any other distribution of its assets, to holders of common stock, then the warrant holder shall be entitled to participate in such dividend or distribution to the same extent that the holder would have participated had it held the number of shares of common stock acquirable upon complete exercise of the warrant. The Company estimated the fair value of this warrant using the Black‑Scholes option‑pricing model, based on the inputs for the estimated fair value of the underlying common stock at the valuation measurement date, the contractual term of the warrant, risk‑free interest rates, expected dividend rates and expected volatility of the price of the underlying common stock. The warrant was issued in connection with a November 18, 2015 financing the Company elected not to pursue.
 
 
On October 31, 2015, warrants issued in 2005 to purchase an aggregate of 4,874 shares of common stock at $41.04 per share expired.

On June 30, 2016, in connection with the benznidazole acquisition the Company issued to Savant a five year warrant (the “Savant Warrant”) to purchase 200,000 shares of the Company’s Common Stock, at an exercise price of $2.25 per share, subject to adjustment. The Savant Warrant is exercisable for 25% of the shares immediately and exercisable for the remaining shares upon reaching certain regulatory related milestones. In addition, pursuant to the MDC Agreement, the Company has granted Savant certain “piggyback” registration rights for the shares issuable under the Warrant.

The Company determined the initial fair value of the Savant Warrant to be approximately $670,000 as of June 30, 2016.  The Company reevaluated the performance conditions and expected vesting of the Savant Warrant as of September 30 and December 31, 2016  and recorded total expense of approximately $361,000 during the year ended December 31, 2016, which is included in Research and development expenses in the accompanying Consolidated Statement of Operations and Comprehensive Loss.

The Company will continue to reevaluate the performance conditions and expected vesting of the Savant Warrant on a quarterly basis until all performance conditions have been met.

On December 1, 2016 the Company issued a warrant to purchase up to an aggregate of 25,000 shares of common stock at an exercise price of $4.00 per share.  The warrant expires on the one year anniversary of its issuance and had a fair value of approximately $40,000 which is included in General and administrative expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The warrant provides that if the Company declares a dividend, or makes any other distribution of its assets, to holders of common stock, then the warrant holder shall be entitled to participate in such dividend or distribution to the same extent that the holder would have participated had it held the number of shares of common stock acquirable upon complete exercise of the warrant. The warrant was issued in connection with the engagement agreement related to certain investor relations activities.