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Subsequent Events
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
13. Subsequent Events

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed.

 

Employment Agreement

 

On January 11, 2016, the Company entered into an employment agreement (the “Employment Agreement”) with Mr. Daniel Seliga.  The terms of the Employment Agreement include a term of two years beginning on January 1, 2016 with an extension provision, the titles and positions of Chief Operating Officer and Chief Financial Officer, an initial base salary of $150,000 per year, subject to certain bonus and severance provisions.  Mr. Seliga’s agreement is bound by restrictive covenants regarding disclosure of confidential information, non-solicitation and employee non-competition.

 

Notes Payable

 

On January 11, 2016, the Company entered into an Amendment to Promissory Note with a lender, effective October 31, 2015, which extended the maturity date of the note payable from November 1, 2015 to October 31, 2016.  In consideration of the extension of the maturity date of the note payable, the Company issued to the lender a five-year warrant to purchase 75,000 shares of Common Stock at an exercise price of $0.25 per share. The warrant contains customary anti-dilution provisions.

 

On January 19, 2016, the Company entered into an Amended and Restated Promissory Note with its Lender, effective December 31, 2015, which extended the maturity date of the Senior Note from December 31, 2015 to May 31, 2016 (the January 2016 Note).  As part of the extension, the Senior Note contains financial covenants which require the Company to meet certain minimum targets for EBITDAS for the quarters ending December 31, 2015 and March 31, 2016.  The other material January 2016 Note terms are unchanged from the Senior Note.

 

Operating Leases

 

The Company entered into an amendment to the lease agreement related to its corporate headquarters in Florence, Kentucky, which extended the lease for an additional three years.  Per the amendment, the monthly lease rate will be $7,770 in 2016, $6,649 in 2017, $6,886 in 2018 and $7,124 in 2019.  The lease expires on January 1, 2020.