Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.7.0.1
Subsequent Events
6 Months Ended
Jun. 30, 2017
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

16. SUBSEQUENT EVENTS

 

Reverse Stock Split

 

On July 10, 2017, the Financial Industry Regulatory Authority (FINRA) approved the Company’s 1:4 reverse stock split of the Company’s common stock. The 1:4 reverse stock split 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 effective date of the reverse stock split was July 12, 2017. As discussed in Note 1, Summary of Significant Accounting Policies, all common share, warrant, stock option, and per share information in the unaudited condensed consolidated financial statements gives retroactive effect to the reverse stock split.

 

Debt Reclassifications

 

During July 2017, the Company determined that Forward Investments, LLC was no longer a related party. The outstanding debt to Forward Investments, LLC was reclassed from notes payable, related parties to term loans effective January 1, 2016. As discussed in note 1, Summary of Significant Accounting Policies, amounts outstanding as of December 31, 2016 were retrospectively updated to match the presentation on the unaudited condensed consolidated balance sheet as of June 30, 2017. Additionally, interest expense was retrospectively updated for the three and six months ended June 30, 2016 to match the presentation on the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2017.

 

During July 2017, the Company determined that Frank Jadevaia, the former owner of IPC and former President of the Company, was no longer a related party due to his resignation from his role as the Company’s President on November 4, 2016. The outstanding debt to Frank Jadevaia was reclassed from notes payable, related parties to term loans, effective November 4, 2016. As discussed in note 1, Summary of Significant Accounting Policies, amounts outstanding as of December 31, 2016 were retrospectively updated to match the presentation on the unaudited condensed consolidated balance sheet as of June 30, 2017. Additionally, interest expense related to this debt was unchanged for the three and six months ended June 30, 2016.

 

RDW July 14, 2017 9.9 % Convertible Promissory Note

 

On July 14, 2017, the Company entered into a convertible promissory note with RDW in the principal amount of $155, witch interest accruing at the rate of 9.9% per annum, which matures on July 14, 2018. The note is convertible at the lower of (i) $0.04 or (ii) 75% of the lowest five VWAPS over the seven trading days prior to the date of conversion.

 

Assignment of Tim Hannibal Note – RDW July 18, 2017 2.5% Convertible Promissory Note

 

On July 18, 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. This note was convertible into the Company’s common stock at a price of $25.48 per share. RDW then exchanged this original note for a new 2.5% convertible promissory note with a principal amount of $1,215 due July 18, 2018. The 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, Tim Hannibal forgave all outstanding interest relating to the original note.

 

RDW July 18, 2017 2.5% Convertible Promissory Note – First Amendment

 

On July 20, 2017, the Company and RDW entered into the first amendment of the RDW July 18, 2017 2.5% Convertible Promissory Note to amend the conversion price. Per the amendment, the conversion price is now equal to the lower of (i) $0.04 or (ii) 75% of the lowest five VWAPS over the seven trading days prior to the date of conversion.

  

Designation of Series J Preferred Stock

 

On July 20, 2017, the Board of Directors designated 1,000 shares of the Company’s authorized preferred stock, with a par value of $0.000 per share, as Series J preferred stock. The Series J preferred stock has a stated value of $4,916 per share, is not redeemable and, except as otherwise required by law, shall be voted together with the Company’s common stock and any other series of preferred stock then outstanding, and not as a separate class, at any meeting of the stockholders of the Company upon any matter upon which the holders of common stock have the right to vote, except that the aggregate voting power of the Series J preferred stock shall be equal to 51% of the total voting power of the Company. The holders of Series J preferred stock also have a liquidation preference in the amount of $4,916 per share that is senior to the distributions, if any, to be paid to the holders of common stock.

 

Warrants Issued to TNS President

 

On July 24, 2017, the Company issued a warrant to Joel Raven, TNS President, to purchase up to a total of 28,330,000 shares of the Company’s common stock. The warrant is exercisable at $0.001 per share and expires on July 23, 2019.

 

Warrants Issued to TNS General Manager

 

On July 24, 2017, the Company issued a warrant to Mike Roeske, TNS General Manager, to purchase up to a total of 9,900,000 shares of the Company’s common stock. The warrant is exercisable at $0.001 per share and expires on July 23, 2019.

 

 Exchange of Related Party Debt for Restricted Equity

 

On July 25, 2017, Mark Munro, CEO, and Mark Durfee, Board Member, exchanged their outstanding related party debt for the Company’s Series J preferred stock with special voting rights, as discussed above. Mark Munro converted principal and interest of $1,709 and $195, respectively. Mark Durfee converted principal and interest of $2,550 and $464, respectively. As a result of the exchange, Mark Munro and Mark Durfee received 387 and 613 shares, respectively, of the Company’s Series J preferred stock.

 

Dominion November 4, 2016 Exchange Agreement Conversions

 

During July 2017, the Company issued an aggregate of 17,811,834 shares of its common stock to Dominion Capital LLC upon the conversion of $509 of principal and accrued interest of a note outstanding.

 

RDW April 3, 2017 2.5% Convertible Promissory Note Conversions

 

During July 2017, the Company issued an aggregate of 621,590 shares of its common stock to RDW upon the conversion of $50 of principal of a note outstanding.

 

RDW July 18, 2017 2.5% Convertible Promissory Note Conversions

 

During July 2017, the Company issued an aggregate of 12,547,039 shares of its common stock to RDW upon the conversion of $253 of principal of a note outstanding.

 

From August 1 through August 14, 2017, the Company issued an aggregate of 11,164,325 shares of its common stock to RDW upon the conversion of $153 of principal of a note outstanding.

 

MEF I, L.P. Exchange Note Conversions

 

During July 2017, the Company issued and aggregate of 20,614,455 shares of its common stock to MEF I, L.P. upon the conversion of $461 of principal and accrued interest of a note outstanding.

 

From August 1 through August 14, 2017, the Company issued an aggregate of 6,578,421 shares of its common stock to MEF I, L.P. upon the conversion of $96 of principal and accrued interest of a note outstanding.

 

JGB Concord Promissory Note Conversions

 

During July 2017, the Company issued an aggregate of 10,655,548 shares of its common stock to JGB Concord upon the conversion of $100 of principal and accrued interest of a note outstanding.

 

JGB Waltham Promissory Note Conversions

 

During July 2017, the Company issued an aggregate of 37,343,753 shares of its common stock to JGB Waltham upon the conversion of $351 of principal and accrued interest of a note outstanding.

 

From August 1 through August 14, 2017, the Company issued an aggregate of 10,642,438 shares of its common stock to JGB Waltham upon the conversion of $100 of principal and accrued interest of a note outstanding.

 

Forward Investments, LLC Promissory Note Conversions

 

During July 2017, the Company issued an aggregate of 44,641,199 shares of its common stock to Forward Investments, LLC upon the conversion of $1,172 of principal of a note outstanding.

 

From August 1 through August 14, 2017, the Company issued an aggregate of 19,198,474 shares of its common stock to Forward Investments, LLC upon the conversion of $311 of principal of a note outstanding.

 

Smithline Senior Convertible Note Debt Conversions

 

During July 2017, the Company issued an aggregate of 3,398,058 shares of its common stock to Smithline upon the conversion of $140 of principal and accrued interest of a note outstanding.