ITEM 1.01. Entry into Material Definitive Agreements
Equity Purchase Agreement
On September 14, 2017, we entered into
an equity purchase agreement, or the EPA, with Spotfin Funding LLC, or Spotfin. Under the EPA we may, for a three-year period,
sell shares of common stock to Spotfin from time to time in installments of up to $250,000, for a total purchase price of up to
$5,000,000. In order to sell shares under the EPA, we deliver a “put” notice to Spotfin and then arrange for the shares
to be delivered to Spotfin. The purchase price for each sale of shares will, subject to exceptions set forth in the EPA, equal
85% of the lowest daily volume weighted average price of the common stock during a five trading-day valuation period that commences
on the first trading day on which the shares being sold are received by Spotfin. Spotfin may elect to sell some or all of those
shares during such five trading-day period. We receive the
proceeds of our sale of shares to Spotfin at a closing held within two trading days after the end of the five trading-day valuation
period. During the term of the EPA, Spotfin may not engage in “short selling” of the common stock.
We owe a commitment fee of $150,000
to Spotfin under the EPA. We will pay that fee by issuing shares of common stock to Spotfin from time to time upon Spotfin’s
request. Each such request must specify the dollar amount of the then-unpaid commitment fee that Spotfin desires to receive at
the time, and we then must issue to Spotfin a number of shares of common stock equal to the specified dollar amount divided by
a recent closing price of the common stock (as determined under the EPA).
We may not begin to sell shares of common
stock to Spotfin under the EPA until such time as we have filed, and the Securities and Exchange Commission, or SEC, has declared
effective, a registration statement covering resales by Spotfin of shares of common stock issued under the EPA. See “Registration
Rights Agreement” below.
The foregoing summary description of
the EPA does not purport to be complete and is qualified in its entirety by reference to the full text of the EPA, which is filed
as an exhibit to this Form 8-K.
Registration Rights Agreement
On September 14, 2017, in
connection with the EPA, we entered into a registration rights agreement with Spotfin in which we agreed, among other things,
to (a) file with the SEC, by no later September 29, 2017, a registration statement covering the maximum number of shares of
common stock issuable under the EPA (as calculated under the EPA) and (b) use our reasonable best efforts to have the
registration statement declared effective by the SEC by no later than December 13, 2017.
The foregoing summary description of
the registration rights agreement does not purport to be complete and is qualified in its entirety by reference to the full text
of the agreement, which is filed as an exhibit to this Form 8-K.