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Subsequent Events
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

(14) Subsequent Events

 

On November 13, 2019, we entered into a Securities Purchase Agreement (the “SPA”) with Mr. Whitmore pursuant to which he agreed to purchase a Convertible Note from the Company for $2,000,000 and otherwise including representations, warranties and covenants which are customary for similar transactions.  The transactions contemplated by the SPA are expected to close on November 20, 2019.

 

Pursuant to the SPA, the Company has agreed to issue a 2% Secured Convertible Promissory Note in the original principal amount of $2,000,000 (the “Convertible Note”), the principal amount of which is payable to the order of Mr. Whitmore and his registered assigns and successors in a single payment on May 15, 2024 (the “Maturity Date”). The principal amount and, at the holder’s option, accrued interest under the Convertible Note is convertible at the holder’s option into additional shares of the Company’s common stock in whole or in part and from time to time up to the Maturity Date at a conversion price of $0.20 per share.

Pursuant to the Convertible Note, we have agreed to reserve sufficient shares of our common stock for the conversion of the Convertible Note. Our Board of Directors has proposed, and has summited to our stockholders for adoption at our 2019 annual meeting, an amendment to our certificate of incorporation to increase the number of authorized shares of common stock (the “Certificate Amendment”). If the Certificate Amendment is adopted by our stockholders and filed with the Delaware Secretary of State, we will be able to reserve a sufficient number of shares for the conversion of the Convertible Note. If the Certificate Amendment is not so filed on or before December 31, 2019, an amount equal to 105% of the outstanding principal amount of the Convertible Note (plus all accrued and unpaid interest, if any) will be immediately due and payable.

 

If there is a change in control transaction, Mr. Whitmore shall have the right to require the Company or its successor to the Convertible Note, in whole or in part, at a redemption price equal to 105% of the outstanding Principal Amount (plus any accrued interest or applicable late charges) being redeemed.