UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported: May 25, 2017
Function(x) Inc.
(Exact name of Registrant as Specified in its Charter)
| Delaware | 0-13803 | 33-0637631 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
902
Broadway, 11th Floor |
10010 | |
| (Address of principal executive offices) | (Zip Code) |
(212) 231-0092
(Registrant’s Telephone Number, including Area Code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions ( see General Instruction A.2 below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425). |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
As previously reported on the Company’s Current Report on Form 8-K filed on April 19,2017, on April 18, 2017, the Company entered into a Note Exchange Agreement (the “Exchange Agreement”) with the holder of the $3,000,000 promissory note issued by the Company on July 8, 2016, in connection with the Company’s acquisition of the assets of Rant, Inc., and issued its Amended and Restated 12% Secured Convertible Promissory Note (the “Note”) in the amount of $3,284,000, which Note matures on June 1, 2017. The failure of the Company to file its Form 10-Q for the period ending March 31, 2017, constitutes a “Public Information Failure” (as defined in the Exchange Agreement) and as a result, the Company became obligated to pay the Holder, an amount in cash equal to one percent (1%) of the greater of the product of (A) the aggregate number of shares of common stock which the holder is entitled to convert pursuant to the Note and (B) the closing bid price of the common stock on the trading day immediately preceding the Public Information Failure, and on every 30th day (prorated for periods less than thirty days) thereafter until the Public Information Failure is cured. The payments are due on the earlier of the last day of the month in which the Public Information Failure occurred and the third business day after the failure is cured. If not paid timely such payments bear interest at the rate of 1.5% per month (prorated when made). The Company does not anticipate it will be able to pay the Note on the due date and therefore will be in default under the Note on the date that is five business days following the due date.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On May 25, 2017, Function(x) Inc. (the “Company”) received written notice from the Listing Qualifications Department (the “Staff”) of The NASDAQ Stock Market LLC (“Nasdaq”) indicating that the Company no longer satisfied Nasdaq’s filing requirement, as set forth in Nasdaq Listing Rule 5250(c)(1), due to its failure to timely file the Form 10-Q for the period ended March 31, 2017 (the “Form 10-Q”) with the Securities and Exchange Commission (the “SEC”) and that the Company’s common stock was subject to delisting from Nasdaq unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”).
The Company requested a hearing before the Panel, at which hearing the Company will present its plan to regain compliance with the filing requirement and to request an extension, if necessary, within which to do so. The hearing request will automatically stay any delisting action by the Staff through June 16, 2017; however, as part of the hearing request, the Company also requested that the stay be extended pending the issuance of the Panel’s decision and the expiration of any extension granted by the Panel following the hearing. There can be no assurance that the stay will be extended or that the Panel will ultimately grant the Company’s request for continued listing on Nasdaq.
The filing deficiency is in addition to the bid price deficiency, of which the Company was notified by the Staff on April 7, 2017 and granted a grace period within which to regain compliance through October 4, 2017, as reported on the Current Report on Form 8-K filed on April 13, 2017.
Item 8.01 Other Events
On June 1, 2017, the Company issued a press release relating to the notice received from the Staff. A copy of the press release is attached as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press release issued June 1, 2017 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FUNCTION(X) INC. | ||
| By: | /s/ Mitchell J. Nelson | |
| Name: | Mitchell J. Nelson | |
| Title: | Executive Vice President and Secretary | |
| DATE: June 1, 2017 | ||
Function(x) Receives Nasdaq Notice;
Hearing Requested
NEW YORK –June 1, 2017 – Function(x) Inc. (Nasdaq: FNCX) (the “Company”), today announced that on May 25, 2017, the Listing Qualifications Department of The NASDAQ Stock Market LLC (“NASDAQ”) notified the Company that, due to the late filing of its Form 10-Q for the period ending March 31, 2017 (the “Form 10-Q”) with the Securities and Exchange Commission, the Company’s securities would be subject to delisting unless the Company timely requests a hearing before the NASDAQ Hearings Panel (the “Panel”).
The Company today requested a hearing before the Panel. At the hearing, the Company will present its plan to file the Form 10-Q to the Panel and request a further extension to do so. The hearing request will automatically stay any delisting action by NASDAQ, but only for a period of 15 days. As such, the Company also requested a further stay of any delisting action by NASDAQ at least until the Panel has issued its decision following the hearing and the expiration of any extension that may be granted by the Panel.
For further details, please refer to the company’s Current Report on Form 8-K as filed with the Securities and Exchange Commission.
About Function(x)
Function(x) operates Wetpaint.com and Rant. Wetpaint is the leading online destination for entertainment news for millennial women, covering the latest in television, music, and pop culture. Rant is a leading digital publisher with original content in multiple different verticals, most notably in sports, entertainment, and pets. Function(x), Inc. is also the largest shareholder of DraftDay Gaming Group, which is well-positioned to become a significant participant in the expanding fantasy sports market, offering a high-quality daily fantasy sports experience both directly to consumers and to businesses desiring turnkey solutions to new revenue streams. Function(x), Inc. also owns Choose Digital, a digital marketplace platform that allows companies to incorporate digital content into existing rewards and loyalty programs in support of marketing and sales initiatives. For more information, visit www.functionxinc.com.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. All information provided in this press release is as of the date of this release. Except as required by law, Function(x), Inc. undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Jason Assad
Investor Relations
678-570-6791
jassad@functionxinc.com
Michelle Lanken
Chief Financial Officer
212-231-0092
mlanken@functionxinc.com