Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.7.0.1
Subsequent Events
3 Months Ended
Mar. 31, 2017
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

16. SUBSEQUENT EVENTS 

 

Assignment of Tim Hannibal Note

 

On April 3, 2017, Tim Hannibal assigned 100% of his 8% convertible promissory note in the original principal amount of $1,215, due October 9, 2017, to RDW Capital, LLC (“RDW”). This note was convertible at a price of $6.37. RDW then exchanged this original note for a new 2.5% convertible promissory note with a principal amount of $1,215 due April 4, 2018. This conversion price in effect on any conversion date shall be equal to 75% of the average of the five lowest VWAPS over the seven trading days prior to the date of conversion.

 

Assignment of Scott Davis Note and Return of Interest in Nottingham

 

On April 3, 2017, Scott Davis assigned 100% of his promissory note in the original principal amount of $250, reduced to $225 based on a $25 conversion into common stock, to RDW. This note was convertible at a price of $2.22 and was due on demand. As consideration for the assignment RDW paid Scott Davis $40. RDW then exchanged this original note for a new 2.5% convertible promissory note with a principal amount of $100 due April 3, 2018. This conversion price in effect on any conversion date shall be equal to 75% of the average of the five lowest VWAPS over the seven trading days prior to the date of conversion.

 

In addition, the Company returned its 40% interest in Nottingham to Scott Davis effective April 1, 2017, for no consideration.

 

Sale of the AWS Entities

 

On April 25, 2017, the Company entered into and closed on an Asset Purchase Agreement (“Mantra APA”) with Mantra Venture Group Ltd. (“Mantra”). Pursuant to the terms of the Mantra APA, the Company agreed to sell to Mantra 80.1% of the assets associated with the Company’s AWS Entities (the “Business”) subsidiaries. The purchase price paid by Mantra for the assets included the assumption of certain liabilities and contracts associated with the Business, the issuance to the Company of a one-year convertible promissory note in the principal amount of $2,000, which accrues interest at a rate of 8% per annum, and a potential earn-out after six months in an amount equal to the lesser of (i) three times EBITDA (as defined in the Mantra APA) of the Business for the six-month period immediately following the closing and (ii) $1,500. In addition, the Mantra APA contains a working capital adjustment.

 

Reverse Stock-Split

 

A 1:4 reverse stock-split of the Company’s common stock was approved by the Company’s stockholders on August 29, 2016 at the 2016 Annual Meeting of stockholders and by the Company’s board of directors in April 2017. The Company has requested the required regulatory approval from FINRA (Financial Industry Regulatory Authority) in order to effect the reverse stock-split. To date, the Company has not received the approval and the reverse stock-split has not been effected.