On the Company entered into a line of credit (“Line of Credit”) agreement in the maximum amount of with a non-related lender (“Lender”). Borrowings under the Line of Credit bear interest at per annum, with all unpaid principal and accrued interest due and payable in pursuant to the terms of the Secured Convertible Promissory Note (the “Note”). In addition, at the election of Lender, all or any portion of the outstanding principal, accrued but unpaid interest and/or late charges under the Line of Credit be converted into shares of the Company

 

In connection with the Line of Credit, the Company granted a warrant to the Lender to purchase a certain number of shares of common stock of the Company equal to the outstanding advances under the Line of Credit divided by the conversion price of for a term of years, at an exercise price per share equal to Accordingly, in connection with the advance of Lender is entitled to purchase up to shares of common stock upon exercise of the warrant at per share. The Lender has no other material relationship with the Company or its affiliates. The estimated relative fair value of warrants issued in connection with advances under the Line of Credit was recorded as a debt discount and amortized as additional interest expense over the term of the underlying debt. The Company recorded debt discount of approximately based on the relative fair value of these warrants. In addition, as the effective conversion price of the debt was less than the market price of the underlying common stock on the date of issuance, the Company recorded additional debt discount of approximately related to the beneficial conversion feature. As of the principal amount outstanding under this agreement is presented net of unamortized debt discount totaling During the months ended and the Company recorded debt discount amortization of approximately and respectively, which is included in interest expense in the accompanying condensed consolidated statements of operations.

 

The Company retained Security Research Associates Inc. (“SRA”), on a best-efforts basis, as its placement agent for the placement of the Line of Credit. The Company agreed to pay SRA a cash amount equal to of the gross proceeds raised and a warrant for the purchase of the common stock of the Company. The number of common stock shares subject to the warrant equals of the aggregate gross proceeds from the Line of Credit received by the Company from the Lender divided by per share. The warrant had a term of years, an exercise price equal to per share and also included cashless exercise provisions as well as representations and warranties that are customary and standard in warrants issued to placement agents or underwriters. During fiscal and in connection with the Line of Credit, SRA earned a commission of and warrants to purchase shares of the Company