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Subsequent Events
12 Months Ended
Dec. 31, 2014
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

20.   SUBSEQUENT EVENTS

 

On January 21, 2014, Full Circle purchased, for $500,000, warrants, which allowed Full Circle to purchase up to 1,000,000 shares of our common stock, at a price of $5.50 per share, at any time on or prior to January 21, 2017 (the “Warrant Agreement”). The Company and Full Circle entered into Amendment No. 1 to the Series C Warrants (the “Warrant Amendment”), which changed the exercise price of these warrants to $4.00 per share of the Company’s common stock, and increased the amount of warrants issuable to 1,400,000 warrants to purchase shares of the Company’s common stock. The Warrant Agreement set forth the option for Full Circle to execute a cashless exercise of the warrants under certain circumstances. On January 23, 2015, the Company issued Full Circle 660,263 shares in exchange for the cancellation of 1,215,000 warrants, with Full Circle being issued a new warrant in the amount of 185,000 shares.

 

On February 19, 2015, the Company completed the closing of a private placement financing transaction with Infinity Capital, which purchased a Senior Secured Note (the “Note”) from the Company in the principal amount of up to $250,000. Michael Feinsod, who is a director of the Company, is deemed to be the beneficial owner of Infinity Capital. Infinity Capital agreed to make advances to the Company from time to time in amounts not to exceed the aggregate principal amount of the Note of $250,000.  The Company’s Note balance to Infinity Capital was approximately $210,000 on April 14, 2015.

 

Interest on the Note shall accrue at 5.0%.  Interest on the then-outstanding principal amount shall be payable monthly in arrears commencing June 30, 2015, until the Note’s maturity date on August 31, 2015.  The Note may be prepaid at any time upon 5 business days’ notice to the Investor.  As collateral for payment of the Note, the Company granted Infinity Capital a lien and security interest in substantially all of the Company’s business assets and property.  The Company believes that the arrangement was on terms that were at least as favorable as it could have obtained from third parties.

 

In March 2015, GC Security, LLC, a Colorado limited liability company (“GCS”), and wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “APA”) by and among the Company, GCS and Iron Protection Group, LLC, a Colorado limited liability company (the “Seller”), whereby GCS agreed to acquire substantially all of the assets of Seller (the “Acquisition”). There are certain assets and liabilities of the Seller that will not be assumed. Prior to entering into the APA, the Company had no relationship with the Seller or its sole shareholder.

 

Pursuant to the terms of the APA, the Company will deliver to Seller 500,000 restricted shares of the Company’s common stock (the “Stock Consideration”), which will vest over a one-year period. In addition, the Company will deliver to Seller three year warrants (the “Warrants”) to purchase an aggregate of 500,000 shares of the Company’s common stock at an exercise price of: (i) $4.50 for warrants to purchase 250,000 shares of the Company’s common stock, and (i) $5.00 for warrants to purchase another 250,000 shares of the Company’s common stock. The APA contains certain provisions that require Seller to forfeit a portion of the Stock Consideration in the event that Seller violates its obligations under the APA relating to non-competition and non-disclosure. The closing date of the Acquisition was March 26, 2015 and the Company has initially calculated the purchase price of the Acquisition to be approximately $1,500,000.

 

From January 1, 2015 to April 14, 2015, three of the January 2014 Issuance note holders and one of the December 2013 Issuance note holders converted loan notes with principal balances totaling $290,000 and accrued interest of $1,063 into 58,213 shares of the Company’s common stock at a conversion price of $5.00 per share.

 

In accordance with ASC Topic 855, Subsequent Events, the Company has evaluated events that occurred subsequent to the balance sheet date through April 14, 2015, the date of available issuance of these unaudited financial statements. The Company determined that other than as disclosed above, there were no material reportable subsequent events to be disclosed.