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Subsequent Events
6 Months Ended
Jun. 30, 2013
Subsequent Events [Abstract]  
13. Subsequent Events

The Company evaluated all events or transactions after June 30, 2013 through the date the condensed consolidated financial statements were issued.

 

On July 24, 2013, the Company closed on the acquisition of a group of patents in the mobile communication sector (the “Purchased Patents”) from Rockstar Consortium US LP, a Delaware limited partnership (“Rockstar”). In consideration for the Purchased Patents, the Company paid an aggregate $3 million in consideration to Rockstar, which consisted of a $2 million cash payment and $1million of the Company’s common stock (176,991 shares at $5.65 per share). The Shares are subject to a lock-up agreement, subject to certain leak-out provisions, which shall expire on the earlier of (i) six months from the issuance of the Shares and (ii) the date that the Company’s Common Stock achieves a trading volume of at least 50,000 shares per day and a closing price of at least $15 per share for a period of five consecutive days. The Company has agreed to file a registration statement covering the resale of the Shares with the Securities and Exchange Commission (the “SEC”) within thirty (30) days of the closing of the acquisition and to use its best efforts to cause such registration statement to be declared effective by the SEC within one hundred and twenty (120) days from closing. Rockstar will also be entitled to receive a percentage of future profits after recovery of patent monetization costs and an initial priority return on investment to the Company.

 

On August 6, 2013, the Company sold a promissory note in the principal amount of $500,000 (the “Note”) to North South Holdings, Inc. pursuant to the terms of a Note Purchase Agreement (the “Note Purchase Agreement”) with gross proceeds to the Company of $500,000.  The Note accrues interest at the rate of 0.25% per annum and is due and payable twenty four months from the date of issuance, subject to acceleration in the event of default and may be prepaid in whole or in part without penalty or premium. The foregoing is a summary description of the terms and conditions of the sale of the Note and the Note Purchase Agreement and does not purport to be complete and is qualified in its entirety by reference to the Note Purchase Agreement and the form of Note. At the effective time of the Merger the Note will be retired.