Item 1.01 Entry into a Material Definitive Agreement
On July 9, 2014, we entered into a Stock Purchase Agreement and a Registration
Rights Agreement with Kodiak Capital Group, LLC ("Kodiak.") Under the Stock
Purchase Agreement, Kodiak has agreed to provide us with up to $1,500,000 of
equity financing following effectiveness of a registration statement on Form
S-1.We plan to file a registration statement shortly.
Under the agreements, at such time as the registration statement is declared
effective by the Securities and Exchange Commission, we can from time to time
require Kodiak to purchase shares of our Common Stock for an amount of financing
to be determined by us, up to an aggregate of $1,500,000, by delivering to
Kodiak a notice specifying the amount. The number of shares of Common Stock
that Kodiak will purchase pursuant to each notice is determined by dividing the
amount set forth in the notice by the purchase price, which is based on a
discount from the daily volume weighted average price (VWAP) of the common stock
during the five trading days immediately following the date of the Put Notice.
There is no minimum amount we can specify in a Put Notice at any one time.
Pursuant to the Stock Purchase Agreement, Kodiak and its affiliates will not be
issued shares of our Common Stock to the extent such issuance would result in
its beneficial ownership equaling more than 9.99% of our outstanding Common
Item 3.02. Unregistered Sales of Equity Securities.
On April 30, 2014, as a commitment fee in connection with securing the Stock
Purchase Agreement, we issued an aggregate of 1,500,000 shares of our Common
Stock, restricted in accordance with Rule 144, to Kodiak. We believe the
issuance was exempt from registration pursuant to Section 4(a) (2) of the
Securities Act of 1933.