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Subsequent Events
12 Months Ended
Jul. 31, 2015
Subsequent Events [Abstract]  
Subsequent Events

13. Subsequent Events

 

On October 23, 2015, we closed a private placement financing (the “Private Placement Financing”) with Franchise Brands, LLC (the “Investor”) pursuant to a securities purchase agreement (the “Securities Purchase Agreement”), providing for the issuance and sale by us to the Investor of (i) an aggregate of 13,333,333 shares (collectively, the “Purchase Shares”) of our common stock (the “Common Stock”) at a purchase price of $0.45 per share, (ii) a warrant to purchase up to an aggregate of 6,666,666 shares of Common Stock with a term of five years (the “Five-Year Warrant”) and (iii) a warrant to purchase up to an aggregate of 8,666,666 shares of Common Stock with a term of six months and only exercisable for cash (the “Six-Month Warrant”, together with the Five-Year Warrant, the “Warrants” and the shares issuable upon exercise of the Warrants, collectively, the “Warrant Shares”), for aggregate gross proceeds to us of $6.0 million.  We did not engage a placement agent or investment banker to facilitate the Private Placement Financing.  We intend to use the aggregate net proceeds of the Private Placement Financing primarily for working capital and general corporate purposes.  

 

The Warrants have an exercise price of $0.45 per share, are exercisable immediately after their issuance and will have a term of exercise equal to the earlier of (i) five years or six months, for the Five-Year Warrant and Six-Month Warrant, respectively, after their issuance date or (ii) the consummation of an Acquisition Event (as defined in the Warrants). The Warrants are subject to a broad-based anti-dilution adjustment in the event that we issue shares of Common Stock without consideration or for consideration per share less than the exercise price in effect immediately prior to such issuance; provided however, that such adjustment does not apply to an Excluded Issuance (as such term is defined in the Warrants).  Additionally, the number of Warrant Shares issuable upon exercise of the Warrants and the applicable exercise price therefor are subject to adjustment in the event of a stock dividend, stock split or combination as set forth in the Warrants. 

We also entered into a registration rights agreement with the Investor (the “Registration Rights Agreement”), pursuant to which we will be obligated, upon request of the Investor and subject to certain conditions, to file with the Commission as soon as practicable, but in any event within 60 days after receiving such applicable request, a registration statement on Form S-1 (the “Resale Registration Statement”) to register the Purchase Shares and the Warrant Shares for resale under the Securities Act of 1933, as amended (the “Securities Act”) and other securities issued or issuable with respect to or in exchange for the Purchase Shares or Warrant Shares.  We are obligated to use our commercially reasonable efforts to cause the Resale Registration Statement to be declared effective by the Commission as promptly as reasonably practicable after the filing of the Resale Registration Statement, but no monetary penalty or liquidated damages will be imposed upon the Company if the Registration Statement is not declared effective by the Commission.