ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On August 27, 2014, the Company accepted subscriptions for an aggregate of
1,100,333 shares (the "Shares") of the Company's Series F Convertible Preferred
Stock, par value $0.0001 per share (the "Series F Preferred Stock"), each of
which is convertible into one (1) share of Common Stock, with such rights and
designations as set forth in the Certificate of Designation of Preferences,
Rights and Limitations of Series F Convertible Preferred Stock, attached as an
exhibit to this Current Report (the "Series F Certificate of Designation") in a
private placement (the "Private Placement") of up to $1,500,000 of its
securities to certain accredited investors (the "Investors") at a purchase price
of $0.75 per Share pursuant to subscription agreements (the "Subscription
Agreements") for an aggregate purchase price of $825,250.
The Company agreed with the Investors not to issue any shares of common stock or
securities exercisable or convertible into shares of common stock of the Company
for a price lower than $0.75 per share for a period of 24 months from the
closing of the Private Placement without the consent of the Investors, subject
to certain customary exceptions. Each share of the Series F Preferred Stock is
convertible into one (1) share of Common Stock and has a stated value of
$0.0001. The conversion ratio is subject to adjustment in the event of stock
splits, stock dividends, combination of shares and similar recapitalization
transactions. The Company is prohibited from effecting the conversion of the
Series F Preferred Stock to the extent that, as a result of such conversion, the
holder would beneficially own more than 3.33% (provided that certain Investors
elected to block their beneficial ownership at 4.99%), 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 F Preferred Stock (the "Beneficial Ownership
Limitation"). Each share of the Series F Preferred Stock is entitled to the
number of votes equal to the number of shares of Common Stock such share is
convertible into at such time, but not in excess of the Beneficial Ownership
The Shares of Series F Preferred Stock issued to investors in the Private
Placement were not registered under the Securities Act of 1933, as amended (the
"Securities Act") and were issued in reliance upon the exemption from
registration provided by Section 4(a)(2) of the Securities Act and Rule 506
promulgated thereunder. Certificates representing these Shares will contain a
legend stating the restrictions applicable to such Shares.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
The information set forth in Item 1.01 is incorporated by reference herein.
The transactions did not involve any underwriters, underwriting discounts or
commissions, or any public offering. The issuance of these securities was deemed
to be exempt from the registration requirements of the Securities Act by virtue
of Section 4(a)(2) and/or Rule 506 thereunder, as a transaction by an issuer not
involving a public offering.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
The information set forth in Items 1.01 and 3.02 is incorporated by reference
On August 27, 2014, we filed a Certificate of Designation of Preferences, Rights
and Limitations of Series F Convertible Preferred Stock authorizing the issuance
of up to 2,000,000 shares of Series F Preferred Stock.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits. The following exhibits are filed with this Report:
3.1 Certificate of Designation of Series F Preferred Stock filed with
the Nevada Secretary of State on August 27, 2014
10.1 Form of Subscription Agreement