Page 6 of 9 – SEC Filing
Item 4. Ownership.
(a)
and (b):
(i) Immediately
following the consummation of the underwritten public offering by the Issuer on April 26, 2017 (the “Offering”)
(as disclosed in the Form 8-K filed by the Issuer with the Securities and Exchange Commission on April 27, 2017), each of the
Reporting Persons may have been deemed to have beneficial ownership of 714,288 shares of Common Stock, and
all such shares of Common Stock represented beneficial ownership of approximately 5.6% of the Common Stock, based on (1) 7,741,782
shares of Common Stock outstanding as of April 12, 2017 as reported by the Issuer, plus (2) 5,030,000
shares of Common Stock that were issued at the closing of the Offering. The foregoing excludes:
(I) 405,901 shares of Common Stock issuable upon exercise of a warrant held by Intracoastal (“Intracoastal
Warrant 1”) because Intracoastal Warrant 1 is not exercisable until the effective date of the upcoming amendment
to the Issuer’s Articles of Incorporation to increase the number of authorized shares of Common Stock from 15,000,000 to
30,000,000 (and Intracoastal Warrant 1 contains a blocker provision under which the holder thereof does not have the right to
exercise Intracoastal Warrant 1 to the extent that such exercise would result in beneficial ownership by the holder thereof, together
with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s
affiliates, of more than 4.99% of the Common Stock) and (II) 535,716 shares of Common Stock issuable upon exercise of a
second warrant held by Intracoastal (“Intracoastal Warrant 2”) because Intracoastal Warrant 2 is not exercisable
until the date on which the Issuer publicly announces through the filing of a Current Report on Form 8-K that the Issuer has received
approval of the Issuer’s shareholders as required by Nevada law to amend the Issuer’s Articles of Incorporation to
increase the number of authorized shares of Common Stock from 15,000,000 to 30,000,000 and the amendment to the Issuer’s
Articles of Incorporation has become effective (and Intracoastal Warrant 2 contains a blocker provision under which the holder
thereof does not have the right to exercise Intracoastal Warrant 2 to the extent that such exercise would result in beneficial
ownership by the holder thereof, together with the holder’s affiliates, and any other
persons acting as a group together with the holder or any of the holder’s affiliates, of more than 4.99% of the Common
Stock). Without such blocker provisions (and assuming each of Intracoastal Warrant 1 and Intracoastal Warrant 2 were currently
exercisable), each of the Reporting Persons may have been deemed to have beneficial ownership of 1,655,905 shares of Common Stock.
(ii) As
of the close of business on May 2, 2017, each of the Reporting Persons may be deemed to have beneficial ownership of 281,730 shares
of Common Stock, and all such shares of Common Stock represent beneficial ownership of approximately 2.2% of the Common Stock,
based on (1) 7,741,782 shares of Common Stock outstanding as of April 12, 2017 as reported
by the Issuer, plus (2) 5,030,000 shares of Common Stock
that were issued at the closing of the Offering. The foregoing excludes (I) 405,901 shares of Common Stock issuable upon
exercise of Intracoastal Warrant 1 because Intracoastal Warrant 1 is not exercisable until
the effective date of the upcoming amendment to the Issuer’s Articles of Incorporation to increase the number of authorized
shares of Common Stock from 15,000,000 to 30,000,000 (and Intracoastal Warrant 1 contains a blocker provision under which the
holder thereof does not have the right to exercise Intracoastal Warrant 1 to the extent that such exercise would result in beneficial
ownership by the holder thereof, together with the holder’s affiliates, and any other
persons acting as a group together with the holder or any of the holder’s affiliates, of more than 4.99% of the Common
Stock) and (II) 535,716 shares of Common Stock issuable upon exercise of Intracoastal Warrant 2 because Intracoastal Warrant 2
is not exercisable until the date on which the Issuer publicly announces through the filing of a Current Report on Form 8-K that
the Issuer has received approval of the Issuer’s shareholders as required by Nevada law to amend the Issuer’s Articles
of Incorporation to increase the number of authorized shares of Common Stock from 15,000,000 to 30,000,000 and the amendment to
the Issuer’s Articles of Incorporation has become effective (and Intracoastal Warrant 2 contains a blocker provision under
which the holder thereof does not have the right to exercise Intracoastal Warrant 2 to the extent that such exercise would result
in beneficial ownership by the holder thereof, together with the holder’s affiliates,
and any other persons acting as a group together with the holder or any of the holder’s affiliates, of more than
4.99% of the Common Stock). Without such blocker provisions (and assuming each of Intracoastal Warrant 1 and Intracoastal Warrant
2 were currently exercisable), each of the Reporting Persons may have been deemed to have beneficial ownership of 1,223,347 shares
of Common Stock.
(c)
Number
of shares as to which each Reporting Person has:
(1)
Sole power to vote or to direct the vote: 0 .
(2)
Shared power to vote or to direct the vote: 281,730 .
(3)
Sole power to dispose or to direct the disposition of 0 .
(4)
Shared power to dispose or to direct the disposition of 281,730 .
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