|9 Months Ended|
Sep. 30, 2019
|Subsequent Events [Abstract]|
Note 19 – Subsequent Events
Loans From Mr. Diamantis
Subsequent to September 30, 2019 and through November 30, 2019, Mr. Diamantis advanced the Company $0.7 million for working capital purposes. The Company incurred interest of $65,000 on the advance.
Issuance of Common Stock
Subsequent to September 30, 2019 and through December 26, 2019, the Company issued an aggregate of 1,250,000,000 shares of common stock for conversions of preferred stock. The following table presents the dilutive effect of our various potential common shares as of December 26, 2019.
On October 4, 2019, the Board of Directors authorized the issuance and sale of certain shares of Series K Preferred Stock to Alcimede LLC pursuant to the terms of an Exchange Agreement. The Board considered all options to secure additional financing required to continue operations and determined this authorization to be necessary to secure needed financing in the required time frame. As a result of this authorization, as of the date of filing this report, the Company believes that it has the ability to have sufficient authorized shares of its common stock to cover all potentially dilutive common shares outstanding. Following is a summary of certain terms of the Series K Preferred Stock:
General. The Company’s Board of Directors has designated 250,000 shares of the 5,000,000 authorized shares of preferred stock as the Series K Preferred Stock. Each share of the Series K Preferred Stock has a stated value of $1.00.
Voting Rights. Each holder of the Series K Preferred Stock shall be entitled to vote on all matters submitted to a vote of the holders of the Company’s common stock. With respect to a vote of stockholders to approve either or both a reverse stock split of the Company’s common stock (and any reduction in the authorized shares) and an increase in the authorized shares of common stock from 10 billion shares to up to 12.5 billion shares, no later than December 31, 2019 only, each share of the Series K Preferred Stock shall be entitled to the whole number of votes equal to 40,000 shares of common stock. With respect to all other matters, and from and after December 31, 2019, each share of the Series K Preferred Stock shall be entitled to the whole number of votes equal to the number of shares of common stock into which it is then convertible. The Series K Preferred Stock shall vote with the common stock as if they were a single class of securities.
Dividends. Holders of the Series K Preferred Stock shall be entitled to receive dividends on shares of the Series K Preferred Stock equal (on an as-converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if dividends are paid on shares of common stock.
Rank. The Series K Preferred Stock ranks with respect to dividends or a liquidation, (i) on parity with the common stock, the Company’s Series G Convertible Preferred Stock and the Company’s Series H Convertible Preferred Stock, (ii) senior to the Company’s Series F Convertible Preferred Stock, and (iii) junior to the Company’s Series I-1 Convertible Preferred Stock and the Company’s Series 1-2 Convertible Preferred Stock.
Conversion. Each share of the Series K Preferred Stock is convertible into shares of the Company’s common stock at any time at the option of the holder, into that number of shares of common stock determined by dividing the stated value of such share of Preferred Stock plus any accrued and unpaid dividends thereon, by the conversion price. The conversion price is equal to the average closing price of the common stock on the 10 trading days immediately prior to the conversion date.
Liquidation Preference. Upon any liquidation, dissolution or winding up of the Company, the holders of the Series K Preferred Stock shall be entitled to receive an amount equal to the stated value of the Series K Preferred Stock, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon for each share of the Series K Preferred Stock before any distribution or payment shall be made on any junior securities.
Redemption. At any time the Company shall have the right to redeem all, or any part, of the Series K Preferred Stock then outstanding. The Series K Preferred Stock subject to redemption shall be redeemed by the Company in cash in an amount equal to the stated value of the shares of the Series K Preferred Stock being redeemed plus all accrued and unpaid dividends.
Exchange of Series J Preferred Stock for Series K Preferred Stock
On December 23, 2019, the Company entered into an Exchange Agreement (the “Agreement”) with Alcimede. Pursuant to the Agreement, the Company issued to Alcimede 250,000 shares of its Series K Preferred Stock in exchange for the 250,000 shares of the Company’s Series J Preferred Stock. The holder of the Series J Preferred Stock was entitled to receive, when and as declared by the Board of Directors of the Company, but only out of funds that were legally available therefore, cumulative cash dividends at the rate of 8% of the stated value per annum on each share of Series J Preferred Stock. The Series J Preferred Stock had been issued to Alcimede on July 23, 2018 and upon the issuance of the Series K Preferred Stock to Alcimede, the shares of Series J Preferred Stock were cancelled. Under the Agreement, Alcimede relinquished all rights to any cumulative dividends on the Series J Preferred Stock. The terms of the Series K Preferred Stock do not provide for cumulative dividends.
Redemption of Series G Preferred Stock
On December 9, 2019, the Company redeemed all 215 shares of its Series G Preferred Stock that were outstanding.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef