|3 Months Ended|
Mar. 31, 2019
|Subsequent Events [Abstract]|
Note 15 - Subsequent Events
During the three months ending June 30, 2019, the Company issued 835,740 shares of common stock in connection with the exercise of 1,392,900 warrants through cashless exercises.
During the three months ending June 30, 2019, 1,517 shares of Series 5 Preferred were converted into 455,556 shares of the Company’s common stock.
During the three months ending June 30, 2019, the Company granted stock options for the purchase of 2,337,500 shares of common stock to employees and consultants of the Company. These stock options vest pro-rata over 12 to 48 months, have a life of ten years and an exercise price of $0.75 per share.
On April 10, 2019, the Company and the Holder of the Original Note, with an outstanding balance of $2,689,868 as of April 10, 2019, entered into an exchange agreement, pursuant to which the Company and the Holder agreed to (i) partition a new promissory note in the form of the Original Note (the “Partitioned Note”) in the original principal amount equal to $500,000 (the “Exchange Amount”) and then cause the Outstanding Balance to be reduced by the Exchange Amount; and (ii) exchange the Partitioned Note for the delivery of 626,566 shares of the Company’s common stock, at an effective price per share equal to $0.798. The exchange was completed on April 12, 2019.
On April 24, 2019, the Company and the Holder of the Original Note, with an outstanding balance of $2,198,400 as of April 24, 2019 (the “Outstanding Balance”), entered into an exchange agreement, pursuant to which the Company and the Holder agreed to (i) partition a new promissory note in the form of the Original Note (the “Partitioned Note”) in the original principal amount equal to $400,000 (the “Exchange Amount”) and then cause the Outstanding Balance to be reduced by the Exchange Amount; and (ii) exchange the Partitioned Note for the delivery of 444,988 shares of the Company’s common stock at an effective price per share equal to $0.8989. The exchange was completed on April 25, 2019.
Second Amendment to Sysorex Loan Documents
On April 2, 2019, the Company and Sysorex, Inc. entered into that certain Second Amendment Agreement to that certain Note Purchase Agreement, dated as of December 31, 2018 (as amended from time to time in accordance with its terms, the “NPA”), and that certain Secured Promissory Note issued to the Company by Sysorex on December 31, 2018 (as amended from time to time in accordance with its terms, the “Note,” together with the NPA, the “Sysorex Loan Documents”). Pursuant to the Second Amendment Agreement, the Sysorex Loan Documents were amended to increase the maximum principal amount that may be outstanding at any time under the Note from $5,000,000 to $8,000,000.
May 2019 Note Purchase Agreement and Promissory Note
On May 3, 2019, the Company entered into a note purchase agreement (the “Purchase Agreement”) with the Holder, pursuant to which the Company agreed to issue and sell to the Holder an unsecured promissory note (the “May 2019 Note”) in an aggregate principal amount of $3,770,000 (the “Initial Principal Amount”), which is payable on or before the date that is 10 months from the issuance date. The Initial Principal Amount includes an original issue discount of $750,000 and $20,000 that the Company agreed to pay to the Holder to cover the Holder’s legal fees, accounting costs, due diligence, monitoring and other transaction costs. In exchange for the Note, the Holder paid an aggregate purchase price of $3,000,000. Interest on the Note accrues at a rate of 10% per annum and is payable on the maturity date or otherwise in accordance with the May 2019 Note. The Company may pay all or any portion of the amount owed earlier than it is due; provided, that in the event the Company elects to prepay all or any portion of the outstanding balance, it shall pay to the Holder 115% of the portion of the outstanding balance the Company elects to prepay. Beginning on the date that is 6 months from the issuance date and at the intervals indicated below until the May 2019 Note is paid in full, the Holder shall have the right to redeem up to an aggregate of 1/3 of the initial principal balance of the Note each month (each monthly exercise, a “Monthly Redemption Amount”) by providing written notice (each, a “Monthly Redemption Notice”) delivered to the Company; provided, however, that if the Holder does not exercise any Monthly Redemption Amount in its corresponding month then such Monthly Redemption Amount shall be available for the Holder to redeem in any future month in addition to such future month’s Monthly Redemption Amount. Upon receipt of any Monthly Redemption Notice, the Company shall pay the applicable Monthly Redemption Amount in cash to the Holder within five business days of the Company’s receipt of such Monthly Redemption Notice.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef