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Item 8.01
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Other
Information
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On June 9,
2017, Sileas Corp. (“Sileas”), a related party to the Company, entered into a transaction with The Longview Fund,
L.P.(“Longview”) to settle its February 20, 2009 note with Longview in the original principal amount of
$13,524,405 (the “Note”). The parties agreed to a conversion by Longview of $3,358,538 of the amount due under
the Note into 2,798,782 shares of Company common stock owned by Sileas and previously pledged to Longview as security with
respect to the Note. Simultaneously therewith, Sileas made a $250,000.00 cash payment to Longview, and Longview agreed to
satisfy $10,571,791 of the amount due under the Note. The remaining amount due under the Note is $64,000 which shall be paid
in cash by Sileas to Longview on a quarterly basis, upon the payment of quarterly dividends by the Company, over the next
four calendar quarters commencing on or about June 30, 2017. In order to effect the above, Longview also released the pledge
on all Company shares owned by Sileas and previously pledged to Longview.
Simultaneously with the above, Sileas sold 800,000 shares
of Company common stock to Danny Schoening and Karen Hawkins at a price equal to $314,000 (which is a discounted amount
based upon recognition of years of administrative support by Mr. Schoening and Ms. Hawkins for the Company) as follows: (i)
Danny Schoening: 640,000 Shares for $200,000 plus a $50,825 promissory note; and (ii) Karen Hawkins: 160,000 Shares for
$50,000 plus a $12,706 promissory note. Each promissory note has a one year term, with interest at 1.18% per annum and
shall be payable in four equal quarterly installments of $12,800 for Danny Schoening and $3,200 for Karen Hawkins, each
installment payable within five business days after the payment of cash dividends by the Company to each of them. As a
result, Sileas no longer owns any shares of Company common stock.
After giving effect to the above transactions,
the approximate beneficial ownership of Company equity securities by each of the Longview Fund, Danny Schoening and Karen Hawkins
is as follows:
The Longview Fund 2,800,132 shares or 37.4%
Danny Schoening 682,649 shares or 9.1%
Karen Hawkins shares 171,450 or 2.3%
Item 9.01 Exhibits
10.1 Form of Note Satisfaction Agreement
10.2 Form of Stock Purchase Agreement