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Subsequent Events
6 Months Ended
Mar. 31, 2013
Subsequent Events [Abstract]  
Subsequent Events

Unregistered Sales of Equity Securities

 

On April 12, 2013, the Company issued an aggregate 4,416,908, shares of the Company's common stock to 25 accredited investors in lieu of cash in order to pay the interest accrued for the fiscal quarters ended December 31, 2012 and March 31, 2013 on its 12% Subordinated Secured Convertible Notes issued by the Company to certain investors on various dates between December 23, 2010 and July 19, 2011.

 

On April 22, 2013 the Company and Costa Brava entered into the Sixth Omnibus Amendment, which amends and modifies the terms of certain promissory notes of the Company and the Security Agreement, dated March 16, 2011, as amended, between the Company and Costa Brava (as amended from time to time, the "Security Agreement"), to permit the issuance of, among other promissory notes, the notes referred to below, subordinate the liens securing certain promissory notes to the Notes, and make the Notes and certain senior subordinated notes rank pari passu with one another upon a liquidation of the Company. Costa Brava is the Company's largest stockholder and one of its largest creditors.

 

On April 30, 2013, the Company consummated an offering ("Offering") consisting of the issuance of senior subordinated secured convertible promissory notes to certain accredited investors ("Holders") in the principal amount of $1,145,000 (the "April 30 Notes"). The April 30, Notes, which are part of a series of notes intended to be issued by the Company aggregating up to $4.0 million in principal amount, and are part of the same series of notes as the 12% senior subordinated promissory notes issued on or after September 27, 2012 to The Griffin Fund, LP, mature on the earlier of September 30, 2013 or the date that the Company issues securities to investors in one or more transactions resulting in gross proceeds to the Company of at least $5.0 million (a "Qualified Financing").

 

     The April 30 Notes accrue simple interest at the rate of 12% per annum, and are secured by all assets of the Company under the terms of the Security Agreement. Costa Brava serves as the representative of the Holders under the Security Agreement and has broad discretion as the Holder representative in exercising the rights of the Holders under the Security Agreement. Costa Brava holds a significant portion of the April 30 Notes and is a significant stockholder of the Company.