Note 11 - Subsequent Events

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

11

.     

S

ubsequent Events

On

July 23, 2019,

the Company entered into and closed a private placement with an accredited investor, pursuant to which the Company issued and sold to such investor an unsecured convertible promissory note in the original principal amount of

$1,000,000

(the

“July 2019

Note”).   After

six

months and subject to the receipt of stockholder approval of the conversion feature of the

July 2019

Note, such note is convertible into shares of the Company's common stock at a conversion price equal to the lower of (a)

$1.80

per share or (b)

90%

of the closing sale price of the Company’s common stock on the date of conversion (subject to a floor conversion price of

$0.10

). On

August 12, 2019,

the

July 2019

Note was amended to raise the floor conversion price from

$0.10

to

$0.50.

  All other terms of the

July 2019

Note remained unchanged. 

The

July 2019

Note bears interest at the rate of

twenty-four

percent (

24%

) per annum and is payable quarterly in arrears.  Unless sooner converted in the manner described below, all principal under the

July 2019

Note, together with all accrued and unpaid interest thereupon, will be due and payable

three

years from the date of the issuance on

July 31, 2022. 

However, if stockholder approval of the conversion feature of the

July 2019

Note is

not

obtained at the Company’s next annual meeting of stockholders, the maturity date will accelerate to the date that is

fourteen

days after the next annual meeting.  The

July 2019

Note

may

be prepaid without penalty at any time after the it becomes convertible (at which time the holder will have the right to convert the it before prepayment thereof).

On the date that is

six

months after the issuance of the

July 2019

Note, but subject to stockholder approval of the conversion feature described above, and for so long thereafter as any principal and accrued but unpaid interest under the

July 2019

Note remains outstanding, the holder

may

convert the

July 2019

Note, in whole or in part, into a number of shares of Company common stock equal to (i) the principal amount being converted, together with any accrued or unpaid interest thereon, divided by (ii) the conversion price in effect at the time of conversion. The

July 2019

Note has customary conversion blockers at

4.99%

and

9.99%

unless otherwise agreed to by the Company and the holder.

In addition, on

July 23, 2019,

the Company entered into Amendment

No.

1

to the Convertible Note Agreement, dated

January 29, 2019,

by the Company and Orbrex USA Co. Limited. Under the terms of this Amendment, the maturity date of the

January 2019

Note was extended from

July 29, 2020

to

July 31, 2022.

All other terms of the Convertible Note Agreement remain the same.