Page 7 of 14 – SEC Filing
| CUSIP No. 253862 10 6 | 13D | Page 7 of 14 Pages |
(d) No Reporting Person, nor any
person listed on Schedule A to this Schedule 13D, has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) No Reporting Person, nor any
person listed on Schedule A to this Schedule 13D, has, during the last five years, been party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) Mr. Abbe and each of the other
persons listed on Schedule A to this Schedule 13D is a citizen of the United States of America.
| Item 3. | Source and Amount of Funds or Other Consideration. |
The Shares, Warrants and Convertible Note
purchased by the Reporting Persons were purchased with working capital.
November 2016 Subscription
On November 15, 2016, the Issuer entered in
a subscription agreement (the “November 2016 Subscription Agreement” with a number of different investors (the
“November 2016 Offering,” including Iroquois Master Fund and Iroquois Investment, to purchase an aggregate of
901,666 units (the “Units”) at $0.60 per Unit for an aggregate purchase price of approximately $541,000. Each
Unit consisted of one Share and one warrant to purchase one Share at an exercise price of $0.80 per Share (the “November
2016 Warrants”). In the November 2016 Offering, Iroquois Master Fund subscribed to 166,665 Units and Iroquois Investment
subscribed to 83,335 Units. Under the terms of the November Subscription Agreement, Iroquois Master Fund, Iroquois Investment,
and other investors who purchased at least $100,000 thereunder received the right to participate in the purchase of up to 50% of
the securities offered by the Issuer in any future financing transactions, with limited exceptions.
In connection with the November 2016 Offering,
the Issuer entered into a registration rights agreement with such investors (the “Registration Rights Agreement”).
Pursuant thereto, the Issuer filed a registration statement on Form S-3 on December 21, 2016 (File No. 333-215237) which was declared
effective by the Securities and Exchange Commission (the “SEC”) on January 9, 2017, which registered the Shares
and the Shares underlying the November 2016 Warrants sold in the November 2016 Offering, including those comprising part of the
Units subscribed to by Iroquois Master Fund and Iroquois Investment.
The November 2016 Warrants became exercisable
on May 15, 2017 and entitle the holders to purchase Shares at an exercise price of $0.80 per share for a period of three years
from the date of issuance. The November 2016 Warrants may be exercised for cash or, upon the failure to maintain an effective registration
statement, on a cashless basis. The November 2016 Warrants are subject to a beneficial ownership limitation such that the holder
may not acquire Shares upon the exercise thereof if the holder, with its affiliates, would beneficially own (as defined in the
November 2016 Warrants) in excess of 4.99% of the number of Shares outstanding immediately after such exercise; provided, that
such limitation may be decreased at any time by the holder, or may be increased up to 9.99% by the holder upon not less than 61
days’ prior written notice to the Issuer.
The foregoing are only brief descriptions
of the material terms of the November 2016 Subscription Agreement, the November 2016 Warrants, and Registration Rights Agreement,
which are filed as Exhibits 99.1, 99.2, and 99.3, respectively, and incorporated by reference herein. The foregoing descriptions
are qualified in their entirety by reference to the full text of such exhibits.
