13.

Subsequent Events

Notification of Potential Nasdaq Stock Market delisting

On January 4, 2018, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market notifying us that it believes that we no longer have an operating business following the closing of the sale of the Content Delivery business assets and as a consequence the Nasdaq Listing Qualifications Department considers us a “public shell” under Nasdaq criteria. As such, the Nasdaq Listing Qualifications Department determined that the continued listing of our common stock on the Nasdaq Global Market is no longer warranted. We dispute the Nasdaq’s determination and have taken the necessary steps to appeal the Nasdaq Listing Qualifications Department’s determination to delist our securities by requesting a hearing before a Nasdaq Listing Qualifications Panel (the “Listing Panel”) and tendering the appropriate fee. Our common stock will continue to trade on the Nasdaq Global Market until our appeal is adjudicated before the Listing Panel. There can be no assurances that our appeal will be successful. During the pendency of the Company’s appeal of the Nasdaq Listing Qualifications Department’s determination, the Board of Directors of the Company and its subcommittee constituted by the Board of Directors to evaluate options to maximize the value of our remaining assets (the “Investment Committee”) will continue to evaluate options to maximize the value of the Company’s assets, including opportunities to invest in or acquire one or more operating businesses that provide opportunities for appreciation in value. A hearing before the Listing Panel is scheduled for February 15, 2018 and we expect a decision from the Listing Panel within or up to thirty (30) days of the hearing.

Interim CEO and New Director Appointment

Effective February 8, 2018 and upon recommendation of the Nominating Committee, the Board appointed David Nicol to serve on the Board until the 2018 annual meeting of stockholders of the Company (the “2018 Meeting”). The Board intends to nominate Mr. Nicol for election as an independent director of the Company and recommend in favor of his election by stockholders at the 2018 Meeting. The Board also appointed Mr. Nicol as (i) Audit Committee Chairman and Audit Committee Financial Expert, replacing Wayne Barr, Jr. in those positions, and (ii) as a member of the Compensation and Nominating committees. Mr. Nicol will receive the non-employee director compensation designated for directors and the Audit Committee Chairman as outlined in the Company’s 2017 annual proxy and an additional grant of 7,500 in restricted stock awarded to directors on February 8, 2018 with restrictions lapsing in equal installments on the anniversary of the grant date over a three-year period.

Mr. Nicol is a seasoned board director and advisor for technology-based businesses. He currently serves on the board of directors for two private companies and on the board of a public company, Evolving Systems, Inc., for which he chairs both the Audit and Compensation committees. Mr. Nicol is an active member of the National Association of Corporate Directors and Financial Executives International, and is a qualified SEC/NYSE Audit Committee Expert. Since 2015 he has been on the faculty in the Finance Department at the Bloch School of Management at UMKC. From 2012 through 2014, Mr. Nicol was President/COO of a security innovation company that has since been acquired. Prior to that assignment, he was a consultant to several companies, each subsequently acquired by listed companies. From 2006 through 2009, he was EVP/Chief Financial Officer for Solutionary, a managed IT security services provider, since acquired by NTT Security. Prior to 2006, he held numerous senior executive positions focused on operations, strategy, product management and business development at communication and technology service companies, which included F500 companies as well smaller earlier stage/growth companies. Mr. Nicol holds a B.Sc. from Ohio State University, an M.A. from Case Institute of Technology, and a Ph.D. from Case Western Reserve University.

On February 13, 2018, Mr. Wayne Barr, Jr. most recently the Chairman of the Board, was appointed to a new position as Executive Chairman, CEO and President of the Company on an interim basis to fill the vacancy left after the departure of the Company’s former CEO and President on December 31, 2017. As a result of his new appointment, the Board determined that Mr. Barr will not be considered an independent director during the corresponding interim period. As such, effective upon his appointment on February 13, 2018, Mr. Barr resigned from his memberships on the Audit, Compensation and Nominating committees. Mr. Barr will remain as a member of the Investment Committee.

In his capacity as Executive Chairman, Mr. Barr will continue to serve as and execute the duties of the Chairman of the Board as set forth in the Company’s by-laws and Corporate Governance Guidelines. In his capacity as CEO and President, Mr. Barr shall perform, on a consultant basis, the senior executive officer and managerial job duties customary to such position, in light of the Company’s post-sale structure and as necessary to the operations of the Company and other duties as may be assigned from time to time by the Board.

During the period in which he serves as Executive Chairman, CEO, and President of the Company, Mr. Barr shall be paid $15,000 in monthly installments for his services to the Company. Such compensation is in lieu of the previously disclosed annual cash compensation that would have been payable to Mr. Barr for his service as a director, Chairman of the Board, and Chair of the Audit Committee, which totaled $47,500 annually and was payable in quarterly installments. Mr. Barr’s total compensation for his interim service shall consist of: (i) $15,000 in monthly installments during the interim period, (ii) a Non-Qualified Stock Option, as defined in the Company’s 2011 Amended and Restated Stock Incentive Plan (the “Stock Plan”), for the purchase of fifteen thousand (15,000) shares of the Company’s common stock, $.01 par value (the “Stock”); such grant shall occur on and at an option price per share equal to the closing market price on the second business day following the Company’s earnings release and shall vest and become exercisable in equal installments on the anniversary of the grant date over a three-year period (the “Granted Stock Option”), (iii) reimbursement by the Company for all reasonable out-of-pocket expenses incurred in accordance with the policies and procedures established by the Company for its senior executives and (iv) any long-term incentive awards granted to directors, specifically including an award of 7,500 shares of restricted stock awarded to directors on February 8, 2018, with restrictions lapsing in equal installments on the anniversary of the grant date over a three-year period.

Upon (i) the Board’s termination of Mr. Barr’s service as CEO and President of the Company, which shall not include termination based on (a) Mr. Barr’s resignation unless such resignation is in conjunction with or conditioned on the Company’s purchase of a significant operating asset or a sale or merger of the Company or (b) the Board’s finding of Due Cause or (ii) upon a “change of control” as defined in the Stock Plan, the Granted Stock Option shall accelerate and become immediately vested and exercisable. The term "Due Cause", as used herein, shall mean that (a) Mr. Barr has committed a willful serious act, such as (but not limited to) embezzlement, against the Company intended to enrich himself at the expense of the Company or has been convicted of a felony, or of a misdemeanor involving moral turpitude; (b) Mr. Barr has (i) willfully or grossly neglected his duties hereunder, (ii) committed a material violation of the Company’s policies or procedures, or (iii) intentionally failed to observe specific lawful directives or policies of the Board of Directors; (c) Mr. Barr undertook to provide any chief executive officer certification required under the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act") without taking reasonable and appropriate steps as outlined by the Company’s audit committee to determine whether the certification was accurate; or (d) Mr. Barr’s failure to fulfill any of his duties under, or violation of any provision of, the Sarbanes-Oxley Act, including, but not limited to, failure to establish and administer effectively systems and controls as outlined by the Company’s audit committee necessary for compliance with the Sarbanes-Oxley Act.

During his service as Executive Chairman, CEO and President of the Company Mr. Barr shall not participate in the Company’s bonus or benefits programs for senior executives other than as set forth above. Upon termination of Mr. Barr’s interim service as CEO and President of the Company, it is the Board’s intention that Mr. Barr will continue to serve on the Board and stand for election at the 2018 Meeting.

Other than the notification of potential Nasdaq Global Market delisting described above and agreements entered into with our CFO and former independent director discussed in Note 12, we have evaluated subsequent events through the date these financial statements were issued and determined that there were no other material subsequent events that require recognition or additional disclosure in our consolidated financial statements.