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SUBSEQUENT EVENTS
3 Months Ended
Mar. 31, 2016
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 9. SUBSEQUENT EVENTS

 

The Company evaluates events that have occurred after the balance sheet date but before the condensed consolidated 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 accompanying unaudited condensed consolidated financial statements other than those set forth below.

 

On May 2, 2016, the OTC Markets notified the Company that, based upon its non-compliance with the minimum $0.01 bid price requirement for the prior 30 consecutive business days, the Company – in accordance with the OTC Markets Listing Rules – is provided a grace period, through October 29, 2016, to regain compliance with the minimum bid price requirement.

 

On May 4, 2016, the Company determined that it had insufficient shares of Common Stock authorized to allow for the exercise of Series A Warrants or stock options, or allow the conversion of the Series A Preferred Stock. The Company is seeking the necessary approval from FINRA to implement a reverse stock split that was previously approved by the Company’s stockholders. In the event that FINRA approves the reverse stock split and the split is effected, the Company would have sufficient authorized shares of Common Stock to meet its obligations pursuant to its outstanding warrants, Series A Preferred Stock and stock options.

 

From April 1, 2016 through May 10, 2016, 15,994 Series A Warrants were exercised through the cashless exercise provision in the Series A Warrant resulting in the issuance of approximately 4,953,943,720 shares of the Common Stock. As of May 12, 2016, there were 4,999,106,905 shares of the Common Stock issued and outstanding.

 

On May 4, 2016, the Company determined it had insufficient shares of Common Stock available for future issuances. The Company currently is not permitted to elect to issue Common Stock in lieu of cash payments to satisfy its obligations pursuant to a cashless exercise of the Series A Warrants. If all of the outstanding Series A Warrants were fully exercised as of May 12, 2016, the amounts payable to the holders of the Series A Warrants on a cashless basis would be approximately $77.1 million, using a Black Scholes Value of $75.80 per Series A Warrant. On May 3, 2016, the Company entered into Third Amended and Restated Standstill Agreements with holders of over 85% of the outstanding Series A Warrants, pursuant to which, among other things, the holders agreed not to exercise their Series A Warrants pursuant to the "cashless exercise" provisions of the Series A Warrants prior to the earlier of (1) June 2, 2016, or (2) the date the Company completes its previously approved reverse stock split.