As approved by the Company’s Board of Directors, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Series B Preferred Stock on October 13, 2016, and subsequently filed a Second Amended and Restated Certificate of Designation of Series B Preferred Stock (the “Amended Series B Certificate of Designation”). Pursuant to the Amended Series B Certificate of Designation, the Company designated 2,500,000 shares as Series B preferred stock. Each share of Series B preferred stock has a stated value of $0.001 per share. In the event of a liquidation, dissolution or winding up of the Company, each share of Series B preferred stock will be entitled to a per share preferential payment equal to $4.00, the stated value. Each share of Series A preferred stock is convertible into one (1) share of common stock (i.e., an initial conversion price of $4.00). The conversion ratio is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. In addition, subject to shareholder approval, if the Company issues or sells common stock or common stock equivalents entitling the grantee or purchaser to acquire shares of common stock at an effective price per share that is lower than the then applicable Series B conversion price (such lower price, the “Base Conversion Price”), the Series B conversion price will be reduced to the Base Conversion Price. Except as otherwise provided in the Amended Series B Certificate of Designation or as otherwise required by law, the Series B has no voting rights.

On November 7, 2016, the Company closed on an approximate $10 million underwritten public offering issuing 2,424,242 units (the “Units”) at a purchase price of $4.125 per unit (the “Public Offering Close”). The Units sold consisted of (i) 484,849 shares of convertible Series B Preferred Stock (the “Shares”) and a Class A Warrant (the “Class A Warrant”) to purchase one share of the Company common stock, par value $0.001 per share (the “Common Stock”) with an exercise price of $4.00 per warrant, and (ii) 1,939,393 shares of convertible Series B Preferred Stock (also, the “Shares”) and a Class B Warrant (the “Class B Warrant” and together with the Class A Warrant, the “Warrants”) to purchase one share of Common Stock, each with an exercise price of $4.00 per warrant.

Pursuant to the terms therein and in connection with the Public Offering Close, the balances of the Period Notes were settled as follows: