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SUBSEQUENT EVENTS
9 Months Ended
Jun. 30, 2014
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

On August 8, 2014, we issued and sold a senior secured convertible note in the principal amount of $20,000 and warrants to purchase up to 31,250 shares of common stock to an  investor pursuant to a letter agreement.  The note is convertible into shares of common stock at an initial conversion price of the lower of (x) prior to April 3, 2014, $4.00 per share (subject to adjustment as provided herein) (the “Fixed Conversion Price”) and (y) on or after April 3, 2014, the lower of (I) the Fixed Conversion Price and (II) sixty percent (60%) of the lowest weighted average price of the common stock on any trading day during the sixty (60) consecutive trading days ending on the trading day immediately preceding the date of conversion. The warrants are exercisable at an initial exercise price of $0.30 per share.

 

 On August 22, 2014, we filed a certificate of amendment to our articles of incorporation to effect a 1 for 200 reverse split of our issued and outstanding common stock.  The reverse split was effective with the Financial Industry Regulatory Authority (FINRA) on August 27, 2014.  All per share amounts referenced in this Quarterly Report are reflective of the Reverse Split.

 

 On August 25, 2014, we issued and sold a senior secured convertible note in the principal amount of $20,000 and warrants to purchase up to 31,250  shares of common stock to an  investor pursuant to a letter agreement.  The note is convertible into shares of common stock at an initial conversion price of the lower of (x) prior to April 3, 2014, $4.00 per share (subject to adjustment as provided herein) (the “Fixed Conversion Price”) and (y) on or after April 3, 2014, the lower of (I) the Fixed Conversion Price and (II) sixty percent (60%) of the lowest weighted average price of the common stock on any trading day during the sixty (60) consecutive trading days ending on the trading day immediately preceding the date of conversion. The warrants are exercisable at an initial exercise price of $0.30 per share.

 

 On August 27, 2014, we entered into a series of exchange agreements with certain holders of convertible debentures and promissory notes in the principal face amount of $1,697,000.  Pursuant to the exchange agreements, the holders exchanged the notes and relinquished any and all other rights they may have pursuant to the notes in exchange for 1,500,000 shares of newly designated Series A Convertible Preferred Stock (the “Series A Preferred Stock”).  Such exchanges were conducted pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

 

 Each share of Series A Preferred Stock has a stated value of $2.00 and is convertible into shares of common stock equal to the stated value (and all accrued but unpaid dividends) divided by a conversion price equal to the lower of (i) $0.02 and (ii) twenty percent (20%) of the lowest VWAP of the common stock on the trading day during the twenty  (20) consecutive trading days ending on the trading day immediately preceding the conversion date (subject to adjustment).  The Series A Preferred Stock accrues dividends at a rate of 12% per annum, payable quarterly in arrears in cash or in kind, subject to certain conditions being met.  The Series A Preferred Stock contains a seven year “make-whole” provision such that if the Series A Preferred Stock is converted prior to the seventh anniversary of the date of original issuance, the holder will be entitled to receive the remaining amount of dividends that would accrued from the of the conversion until such seven year anniversary.  The Company is prohibited from effecting the conversion of the Series A Preferred Stock to the extent that, as a result of such conversion, the holder beneficially owns more than 2.49%, in the aggregate, of the issued and outstanding shares of the Company’s common stock calculated immediately after giving effect to the issuance of shares of common stock upon the conversion of the Series A Preferred Stock.   

 

 On August 27, 2014, the Company filed the Series A Certificate of Designation with the Secretary of State of the State of Nevada.

 

 In June, July and August of 2014 the Company entered into agreements with several of its vendors and creditors in which approximately $2,519,000 of  obligations shall be extinguished upon the repayment of $251,238 to such vendors, in the aggregate, which is anticipated to occur during September 2014.