GNPX 2017 Annual Report

76 (2) On June 7, August 1 and September 1, 2017, we entered into a series of subscription agreements with various investors, pursuant to which we issued and sold to such investors an aggregate of 150,214 shares of our preferred stock at a purchase price of $5.27 per share, and received gross proceeds of $793,971. (3) On May 15, 2017, we granted 73,526 shares of our common stock under our 2009 Equity Incentive Plan to one of our employees. The offers, sales and issuances of the securities described in paragraphs (1) and (2) were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) (or Regulation D promulgated thereunder) in that the issuance of securities to the accredited investors did not involve a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited investor under Rule 501 of Regulation D. The offer, sale and issuance of the securities described in paragraph (3) were deemed to be exempt from registration under the Securities Act in reliance on either Rule 701 thereunder in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided under Rule 701 or Section 4(2) in that the issuance of securities to the accredited investors did not involve a public offering. The recipient of such securities was our employee and received the securities under our 2009 Plan. Each of the recipients of securities in these transactions had adequate access, through employment, business or other relationships, to information about us. Use of Proceeds On December 29, 2017, our Registration Statement on Form S-1, as amended (file No. 333-219386) was declared effective by the SEC for our initial public offering of common stock. We issued 1,280,000 shares of common stock at an offering price of $5.00 per share for gross proceeds of $6.4 million. After deducting underwriting discounts, commissions and offering costs incurred by us of $1.375 million, the net proceeds from the offering were $5.025 million. The offering was completed on April 3, 2018. The lead underwriter for the offering was Network 1 Financial Securities, Inc. No offering costs were paid or are payable, directly or indirectly, to our directors or officers, to persons owning 10% or more of any class of our equity securities, or to any of our affiliates. We used approximately $200,000 of the net proceeds of our initial public offering to repay a loan from Domecq Sebastian, LLC, an owner of 10% or more of our common stock, as discussed under “Certain Relationships and Related Transactions, and Director Independence – Loan from Domecq Sebastian, LLC.” We used approximately $25,000 of the net proceeds of our initial public offering to repay a loan from Viet Ly, an owner of 10% or more of our common stock, as discussed under “Certain Relationships and Related Transactions, and Director Independence – Loan from Viet Ly.” We used approximately $45,000 of the net proceeds of our initial public offering to repay a loan from Rodney Varner, our Chief Executive Officer and an owner of 10% or more of our common stock, as discussed under “Certain Relationships and Related Transactions, and Director Independence – Loan from Rodney Varner.” There has been no material change in the expected use of the net proceeds from our initial public offering as described in the final prospectus filed with the SEC on March 29, 2018 relating to the recently completed initial public offering of our common stock. Through April 6, 2018, we have used approximately $260,000 of the net proceeds from the offering. Pending such uses, we plan to continue investing the unused proceeds from the recently completed initial public offering of our common stock in fixed, non- speculative income instruments. We have granted to Network 1 Financial Securities, Inc. an over-allotment option, which is exercisable on or before May 12, 2018, 45 days from the date of the underwriting agreement entered into in connection with our initial public offering and which permits the Network 1 Financial securities, Inc. to purchase up to 192,000 additional shares of our common stock (15% of the shares sold in our initial public offering) from us to cover over-allotments, if any. If the underwriter exercises all or part of this option, the underwriter will purchase shares covered by the option at the price of $5.00 per share, less the underwriting discount. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.