|
Item 3.02
|
Unregistered Sales of Equity Securities
|
On February 10 through February 15, 2017,
certain holders of the 2016 Notes, dated July 1, 2016, were issued shares of the Company’s common stock, par value $0.0001
per share (the “Common Stock”), pursuant to Section 3(a)(9) of the U.S. Securities Act of 1933, as amended (the “Securities
Act”), in connection with conversions at the election of such holders pursuant to the terms of the 2016 Notes. In
connection with the conversions, the Company issued 201,000,000 shares of Common Stock (the “Conversion Shares”). As
per the terms of the 2016 Notes, the Conversion Shares immediately reduced the principal amount outstanding of the 2016 Notes by
$317,610 based upon a conversion price between $0.00126 and $0.00189 per share. The issuance of the Conversion Shares pursuant
to the conversion of the 2016 Notes described herein is exempt from registration under the Securities Act pursuant to the provisions
of Section 3(a)(9) thereof as securities exchanged by the issuer with its existing security holders exclusively where no commission
or other remuneration is paid or given directly or indirectly for soliciting such exchange.
As of February 16, 2017, a total principal
amount of $3.5 million of the 2016 Notes has been converted into shares of Common Stock. Approximately $34.3 million in principal
remains to be converted. Restrictions on a total of $11.0 million in the Company’s restricted cash accounts has been released
including $6.0 million at closing and $5.0 million in early releases from the restricted cash accounts. $19.7 million remains in
the restricted cash accounts to have the restrictions removed and become available to the Company at future dates pursuant to terms
of the 2016 Notes.
As of February 16, 2017, there are 1,079,273,911
shares of Common Stock issued and outstanding.
|
Item 3.03
|
Material Modifications to Rights of Security Holders
|
The information disclosed in Item 1.01 of this Current
Report on Form 8-K is incorporated by reference into this Item 3.03.
In connection with the conversion of a portion of the principal
outstanding under the 2016 Notes in Item 3.02 hereof (the “Conversions”), the exercise prices of certain of our issued
and outstanding securities were automatically adjusted to take into account the conversion price of the 2016 Notes. The
exercise prices of the following securities were adjusted as follows.
Class A and Class B Warrants
As of February 15, 2017, the Company had
outstanding Class A Warrants to purchase 48 shares of Common Stock and Class B Warrants to purchase 29 shares of Common Stock.
The Class A and Class B Warrants include a provision which provides that the exercise price of the Class A and Class B Warrants
will be adjusted in connection with certain equity issuances by the Company. The consummation of the Conversions triggers
an adjustment to the exercise price of the Class A and Class B Warrants. Therefore, as of February 15, 2017, the exercise
price for the Class A and Class B Warrants was adjusted from $0.0018 to $0.00126 per share of Common Stock.
Common Stock Warrants
As of February 15, 2017, the Company had
outstanding certain Common Stock warrants to purchase 2 shares of Common Stock. As a result of the Conversions,
as of February 15, 2017, the exercise price for certain Common Stock warrants was adjusted from $0.0018 to $0.00126 per share of
common stock.
Series B Warrants
As of February 15, 2017, the Company had
outstanding Series B Warrants to purchase 34 shares of Common Stock. The Series B Warrants include a provision which
provides that the exercise prices of the Series B Warrants will be adjusted in connection with certain equity issuances by the
Company. As a result of the Conversions, as of February 15, 2017, the exercise price for Series B Warrants was adjusted
from $361,012 to $355,106 per share of Common Stock.
Series D and 2015 Subordination Warrants
As of February 15, 2017, the Company had
outstanding Series D Warrants to purchase 2,361,468 shares of Common Stock and 2015 Subordination Warrants to purchase 71,129 shares
of Common Stock. The Series D and 2015 Subordination Warrants include a provision which provides that the exercise prices of the
Series D and 2015 Subordination Warrants will be adjusted in connection with certain equity issuances by the Company. The
consummation of the Conversions triggers an adjustment to the exercise price of the Series D and 2015 Subordination Warrants. Therefore,
as of February 15, 2017, the exercise price for the Series D and 2015 Subordination Warrants was adjusted from $0.0018 to $0.00126
per share of Common Stock.
Series G Warrants
As of February 15, 2017, the Company had
outstanding Series G Warrants to purchase 159 shares of Common Stock. The Series G Warrants include a provision which provides
that the exercise price of the Series G Warrants will be adjusted in connection with certain equity issuances by the Company.
The consummation of the Conversions triggers an adjustment to the exercise price of the Series G Warrants. Therefore,
as of February 15, 2017, the exercise price for the Series G Warrants was adjusted from $0.0018 to $0.00126 per share of Common
Stock.
Series H and 2016 Subordination Warrants
As of February 15, 2017, the Company had
outstanding Series H Warrants to purchase 2,346 shares of Common Stock and 2016 Subordination Warrants to purchase 71 shares of
Common Stock. The Series H and 2016 Subordination Warrants include a provision which provides that the exercise prices of the Series
H and 2016 Subordination Warrants will be adjusted in connection with certain equity issuances by the Company. The consummation
of the Conversions triggers an adjustment to the exercise price of the Series H and 2016 Subordination Warrants. Therefore,
as of February 3, 2017, the exercise price for the Series H and 2016 Subordination Warrants was adjusted from $0.0018 to $0.00126
per share of Common Stock.
Series F Convertible Preferred Stock
As of February 15, 2017, the Company has
outstanding 5,860 shares of Series F Convertible Preferred Stock. The Series F Convertible Preferred Stock includes
a provision which provides that the conversion price of the Series F Convertible Preferred Stock will be adjusted in connection
with certain equity issuances by the Company. As a result of the Conversions, as of February 15, 2017, the conversion
price for the Series F Convertible Preferred Stock was adjusted from $0.0018 to $0.00126 per share of Common Stock.