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Subsequent Events
6 Months Ended
Jun. 30, 2017
Subsequent Events [Abstract]  
Subsequent Events

Note 14

Subsequent Events:

 

Notice of Delisting from NASDAQ

 

On July 5, 2017, the Company received another notice (the July 5th Notice) from NASDAQ indicating that, based upon the Companys non-compliance with NASDAQ Listing Rule 5110a, which requires an issuer to file an initial listing application and satisfy the initial listing criteria upon completion of a change of control transaction, the NASDAQ Hearings Panel had determined to delist the Companys common stock from NASDAQ and that trading of the Companys common stock would be suspended on NASDAQ effective with the open of business on July 7, 2017.

 

The Company has appealed the Panels determination; however, the appeal does not stay the suspension of trading of the Companys securities on NASDAQ. The Company has already filed an initial listing application with NASDAQ, and is working to evidence full compliance with the applicable NASDAQ Listing Rules as soon as possible.

 

Upon the suspension of trading on NASDAQ, the Companys common stock moved to trade over-the-counter via the OTC Markets’ “Pinktier. On July 24, 2017, the Company received written notice that its common stock had been up-listed and approved for trading on OTCQB, the higher tier of the OTC Markets, under its existing symbol PHMD.The Securities and Exchange Commission (the SEC) considers the OTCQB marketplace to be an established public marketfor the purpose of determining the public market price of a companys stock when registering securities for resale with the SEC, and the majority of broker-dealers trade stocks on the OTCQB marketplace. Listing on the OTCQB generally provides that a company maintain higher reporting standards and requirements and imposes management certification and compliance requirements. The Company believes that trading its stock on the OTCQB will likely enhance liquidity and shareholder value while its NASDAQ appeal is pending.

 

Agreement with ICTV Brands, Inc.

 

On July 12, 2017 the Company, along with its subsidiaries Radiancy, Inc. (“Radiancy”); PhotoTherapeutics Ltd. (“PHMD UK”); and Radiancy (Israel) Limited (“Radiancy Israel” and together with the Company, Radiancy and PHMD UK the “Sellers” and each individually a “Seller”) entered into a Termination and Release Agreement (the “Release”) between the Sellers and ICTV Brands Inc. (“ICTV”) and its subsidiary ICTV Holdings, Inc. (“ICTV Holdings”). The Sellers, ICTV and ICTV Holdings are referred to herein individually as a “Party” and collectively as the “Parties.”

 

Under the terms of the Release, the Asset Purchase Agreement among the Parties, dated October 4, 2016, as amended by the First Amendment to the Asset Purchase Agreement, dated January 23, 2017 (as so amended, the “Purchase Agreement”), is terminated and of no further force and effect, except for certain surviving rights, obligations and covenants described in the Release. Pursuant to the Release, each of the Sellers, on one hand, and ICTV and ICTV Holdings, on the other hand, fully release, forever discharge and covenant not to sue any other Party, from and with respect to any and all past and present claims arising out of, based upon or relating to the Purchase Agreement (other than the surviving covenants described in the Purchase Agreement) or the transactions contemplated thereby.

 

Pursuant to the terms of the Release, ICTV paid to PHMD, within 3 business days of the date of the Release, $2,000 in cash and in immediately available funds (the “Payment”). Subject to this Payment, neither ICTV nor ICTV Holdings shall have any further royalty or other payment obligations under the Purchase Agreement. The Company received $2,000 on July 13, 2017.

 

As partial consideration for the releases provided by ICTV Holdings to the Sellers pursuant to the Release and in accordance with the terms therein, on July 12, 2017, the Sellers and ICTV Holdings entered into a Bill of Sale and Assignment (“Bill of Sale”), which provides that each Seller sell, assign, transfer, convey and deliver to ICTV Holdings, and ICTV Holdings purchase and accept from each Seller, all of the right, title and interest, legal or equitable, of each such Seller in and to a deposit in the amount of $210 held by Sigmatron International, Inc. (“Sigmatron”), pursuant to an arrangement between one or more of the Sellers and Sigmatron.

 

Johnson Employment Agreement

 

On July 28, 2017, PhotoMedex, Inc. (the “Company”) (OTCQB, Nasdaq and TASE: PHMD) entered into an Employment Agreement (the “Johnson Agreement”) with Stephen Johnson, under which Mr. Johnson will serve as Chief Financial Officer of the Company. The term of the Johnson Agreement is for a period commencing on May 17, 2017 (the “Effective Date”) and ending on the second (2nd) anniversary of the Effective Date (the “Term”). The Term shall be renewed automatically for additional one (1) year period(s) unless terminated by either the Company or Mr. Johnson in writing delivered no less than ninety (90) days prior to the expiration of the then-applicable Term.

 

Mr. Johnson shall be entitled to a base salary of $300 per annum (the “Base Salary”), payable in accordance with the Company’s normal payroll practices. Increases in the Base Salary during the Term will be determined from time to time in the sole discretion of the Board. Mr. Johnson will also be entitled to a bonus of not less than 35% of his Base Salary, subject to achieving certain milestones to be set by the Company’s compensation committee within thirty (30) days after the committee receives a business plan for the Company from Mr. Johnson and Suneet Singal, the Company’s Chief Executive Officer. In addition, Mr. Johnson will be entitled to receive equity compensation in an amount and with a vesting schedule to be determined by the Company’s compensation committee within thirty (30) days after receipt of the business plan.

 

Mr. Johnson and his family will be eligible to participate in the Company’s healthcare, welfare benefit, life insurance, fringe benefit and any qualified or non-qualified retirement plans in effect at the Company (collectively, the “Employee Benefits”) on the same basis as those benefits are made available to the other senior executives of the Company. If the Company does provide a health insurance plan for which Mr. Johnson is eligible, he will be reimbursed by the Company for the cost of the health insurance paid by him for himself and his family. If the Company does not provide a health insurance plan for which he is eligible, Mr. Johnson will be reimbursed by the Company for the cost of health insurance paid by him for himself and his family, grossed-up to cover any taxes Mr. Johnson would be required to pay for that reimbursement. Additionally, Mr. Johnson will receive such perquisites as are or have previously been made available to other senior executives of the Company, as well as four (4) weeks paid vacation per year, and will be paid annually in cash for vacation days not taken by him so long as no more than four (4) weeks of vacation are accrued each year for purposes of cash payments.

 

Mr. Johnson’s employment may be terminated by the Company for Cause, as defined in the Agreement, upon delivery of a Notice of Termination by the Company to him, except where he is entitled to a cure period, in which case the Date of Termination will be upon the expiration of the cure period if the matter constituting Cause was not cured. His employment will terminate automatically upon his resignation (other than for Good Reason or due to the Executive’s death or Disability).

 

If Mr. Johnson’s employment is terminated by the Company for Cause, or if he resigns other than for Good Reason, he is entitled to receive (a) any earned but unpaid Base Salary and/or accrued but unused vacation days, all vested equity, and any earned but unpaid bonus awards through the Date of Termination, (b) reimbursement for any unreimbursed business expenses incurred by him in accordance with the Company’s policy prior to the Date of Termination, and (c) such Employee Benefits, if any, to which he may be entitled upon termination of employment under the terms of the plan documents and applicable law (including under the applicable provisions of Consolidated Omnibus Budget Reconciliation Act of 1985, as amended).

 

If Mr. Johnson’s employment is terminated by the Company other than for Cause, immediately upon delivery of a Notice of Termination by the Company to him, or if it terminates automatically and immediately upon his resignation for Good Reason at the end of any applicable cure period (if the circumstances giving rise to Good Reason are not cured), then Mr. Johnson will receive (a) any earned but unpaid Base Salary and/or accrued but unused vacation, all vested equity, and any earned but unpaid bonus awards through the Date of Termination, plus an additional twelve (12) months of Annual Compensation, together in a lump sum payment; (b) acceleration of any then-unvested stock options, restricted stock grants or other equity awards; (c) payment or reimbursement, as applicable, of the full health insurance costs for Mr. Johnson and his family under a Company-provided group health plan or otherwise for twenty-four (24) months, in compliance with the provisions regarding deferred compensation under Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”), if applicable; (d) if any bonus or other form of additional compensation was paid to any other executive(s) of the Company for the fiscal year during which Mr. Johnson’s employment ceased pursuant to this Section 5(c), a cash amount equal to the largest bonus or other form of additional compensation payment made by the Company to any other executive of the Company during that fiscal year; (e) reimbursement for any accrued but unused vacation days and/or unreimbursed business expenses incurred by Mr. Johnson in accordance with the Company’s policy prior to the Date of Termination; and (f) other Employee Benefits, if any, as to which he may be entitled upon termination of employment.

 

Moreover, if Mr. Johnson resigns for Good Reason due to a Change of Control, as defined in the Johnson Agreement, then he will be entitled to payment of an additional eighteen (18) months of Annual Compensation, not twelve (12) months as provided in the previous paragraph, along with payment of the other amounts and benefits as provided in that paragraph.

 

Finally, Mr. Johnson’s employment terminates upon his death and may be terminated by the Company, within ten (10) days after the delivery of a Notice of Termination by the Company to Mr. Johnson (or his legal representative) in the event of his disability. In such instances, Mr. Johnson will receive the same payments and other items as he would be entitled to receive if his employment was terminated for other than Cause, or if he resigned for Good Cause, except that he (in case of disability) or his estate (in the event of death) will have the right to exercise any unexercised and vested options for a period of 90 days, and, in addition, to receive payment for accrued but unpaid vacation time, if any.

 

The Agreement is governed by the laws of the State of New York and contains customary general contract provisions.

 

Singal Agreement

 

Additionally, the Company has amended the Employment Agreement of Suneet Singal, entered into on May 17, 2017, to provide that Mr. Singal’s annual compensation (his “Base Salary”) will be set initially at $250; that amount will be adjusted going forward as Mr. Singal transitions to the provision of services to the Company on a full-time basis. Mr. Singal will also be entitled to a bonus, amount to be determined and subject to achieving certain milestones, to be set by the Company’s compensation committee within thirty (30) days after the committee receives a business plan for the Company from Mr. Johnson and Suneet Singal, the Company’s Chief Executive Officer, and he will be entitled to receive equity compensation in an amount and with a vesting schedule to be determined by the Company’s compensation committee within thirty (30) days after receipt of the business plan.

 

First Amendment to the Interest Contribution Agreement

 

On August 3, 2017, the Company entered into a First Amendment (the “First Amendment”) to the Interest Contribution Agreement, dated March 31, 2017, by and among First Capital Real Estate Operating Partnership, L.P., First Capital Real Estate Trust Incorporated (together, the “Contributor Parties”), FC Global Realty Operating Partnership, LLC and PhotoMedex, Inc. (together, the “Acquiror Parties”), as modified by the Agreement to Waive First Closing Deliverables, dated May 17, 2017, and the Agreement to Waive Second Closing Deliverables, dated July 3, 2017 (collectively, the “Contribution Agreement”). Under the First Amendment, the Contributor Parties irrevocably waived any conditions to the closings set under the Contribution Agreement, including those conditions contained in Section 7 of the Contribution Agreement that require the Company to maintain its listing and active trading of its securities on any of the NASDAQ markets. The Contributor Parties also reaffirmed their obligation to use their best efforts to satisfy the Mandatory Contribution Conditions and contribute the Mandatory Entity Interests, both as defined in the Contribution Agreement, on or before December 31, 2017. Additionally, the Acquiror Parties confirmed the Contributor Parties’ understanding that the failure of the Contributor Parties to satisfy the Mandatory Contribution Conditions after using commercially reasonable efforts to do so does not give rise to a unilateral right of the Acquiror Parties to terminate the Contribution Agreement pursuant to Article 10 of the Contribution Agreement.

 

Finally, the First Amendment clarified that references in the Contribution Agreement and its Exhibits to NASDAQ shall, to the extent necessary, be deemed to be references to NASDAQ or such other trading market as the Company’s securities may be trading on, including, without limitation, the OTCQB. For purposes of calculating the number of the Company’s shares into which the principal of the Payout Notes under the Contribution Agreement will be converted, if the Company’s shares are not traded on NASDAQ on the approval date of those Payout Notes, VWAP shall be calculated with respect to the transaction in the Company’s shares executed on the OTCQB or such other market as the Company’s shares may then be traded on instead of NASDAQ.

 

The First Amendment contains customary representations and warranties and general contract terms.