|12 Months Ended|
Dec. 31, 2019
|Subsequent Events [Abstract]|
Note 27 - Subsequent Events
On January 3, 2020, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada to effect a 1-for-45 reverse stock split of the Company's issued and outstanding shares of common stock, effective as of January 7, 2020.
On January 14, 2020, the Company exchanged approximately $1,500,000 of the outstanding principal and interest under the May 2019 Note for 410,958 shares of the Company's common stock at an exchange price of $3.65 per share.
On January 16, 2020, the Company exchanged approximately $458,000 of the outstanding principal and interest under the May 2019 Note for 113,182 shares of the Company's common stock at an exchange price of $4.05 per share.
On February 7, 2020, the Company exchanged approximately $300,290 of the outstanding principal and interest under the June 2019 Note for 115,000 shares of the Company's common stock at an exchange price of $3.046 per share.
On February 12, 2020, the Company exchanged approximately $490,000 of the outstanding principal and interest under the June 2019 Note for 175,000 shares of the Company's common stock at an exchange price of $2.80 per share.
Sysorex Note Amendment
On March 1, 2020, the Company amended the Secured Note to extend the maturity date from December 31, 2020 to December 31, 2022, increase the default interest rate from 18% to 21% or the maximum rate allowable by law and to require a cash payment to the Company by Sysorex against the Loan Amount in an amount equal to no less than 6% of the aggregate gross proceeds raised following the completion of any financing, or series of related financings, in which Sysorex raises aggregate gross proceeds of at least $5 million.
Equity Distribution Agreement
On March 3, 2020, the Company entered into an Equity Distribution Agreement (the "Sales Agreement") with Maxim Group LLC ("Maxim") under which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $50 million (the "Shares") from time to time through Maxim, acting exclusively as the Company's sales agent (the "Offering"). The Company intends to use the net proceeds of the Offering primarily for working capital and general corporate purposes. The Company may also use a portion of the net proceeds to invest in or acquire businesses or technologies that it believes are complementary to its own, although the Company has no current plans, commitments or agreements with respect to any acquisitions as of the date of this Annual Report on Form 10-K. Any Shares offered and sold in the Offering will be issued pursuant to the Company's Registration Statement on Form S-3 (File No. 333-223960) filed with the Securities and Exchange Commission on March 27, 2018, as amended on May 15, 2018 and declared effective on June 5, 2018 (the "Form S-3"), the base prospectus dated June 5, 2018 included in the Form S-3 and the prospectus supplement relating to the Offering to be filed with the SEC on or about March 3, 2020. Maxim will be entitled to compensation at a fixed commission rate of 4.0% of the gross sales price per Share sold. In addition, the Company has agreed to reimburse Maxim for its costs and out-of-pocket expenses incurred in connection with its services, including the fees and out-of-pocket expenses of its legal counsel.
The Company is not obligated to make any sales of the Shares under the Sales Agreement and no assurance can be given that the Company will sell any Shares under the Sales Agreement, or if it does, as to the price or amount of Shares that the Company will sell, or the dates on which any such sales will take place. The Sales Agreement will continue until the earliest of (i) twelve (12) months following the date of the Sales Agreement, (ii) the sale of Shares having an aggregate offering price of $50 million, and (iii) the termination by either the Agent or the Company upon the provision of 15 days written notice or otherwise pursuant to the terms of the Sales Agreement.
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