On October 10, 2016, the Company granted 83,333 shares of common stock under the 2007 Equity Plan to its former chief financial officer in connection with a transition and separation agreement. On October 17, 2016, 273 shares of the Company’s Series G Preferred Stock were converted into 606,668 shares of the Company’s common stock.

On October 14, 2016, the Company received a letter from the holders of the Tegal Notes (see note 4) demanding payment of the amounts that were due on July 12, 2016 of approximately $0.2 million, and that the holders reserved the right to declare an event of default under the terms of the notes in the event the amounts due were not paid. To date, the Company has not received further communication from the holders of the Tegal Notes and the entire amount due remains outstanding.

On October 26, 2016, the Company entered into an agreement to purchase certain assets related to a rural critical access hospital, the owners of which have filed a petition under Chapter 11 of the United States Bankruptcy Code. Closing of the purchase is subject to open bid procedures in connection with the bankruptcy proceedings. The purchase price for the assets is $0.6 million, and the Company has placed a deposit into escrow in the amount of $60,000. The Company has the ability to terminate the agreement without penalty, other than forfeiture of the deposit.

The Company has not made the last two required payments under a senior secured convertible debenture with an outstanding principal amount of $3.0 million, and currently does not have the financial resources to satisfy this obligation. The Company is currently negotiating a forbearance agreement with the lender and is exploring several alternatives to refinance the debenture.