|3 Months Ended|
Sep. 30, 2019
19. Subsequent Events
Closing of Public Offering
On October 29, 2019, the Company closed on an underwritten public offering with total gross proceeds of $5.0 million before deducting underwriting discounts, commissions and other offering expenses payable by the Company. The securities offered by the Company consisted of
(i) 2,450,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), (ii) 4,510 shares of the Company’s newly designated Series C Preferred, (iii) 25,000,000 Series A Warrants to purchase shares of the Company’s Common Stock and (iv) 25,000,000 Series B Warrants to purchase shares of the Company’s Common Stock.
Each Share of Common Stock was sold together with two warrants, one Series A Warrant with an expiry date on the second anniversary of the original issuance date to purchase one share of Common Stock and one Series B Warrant with an expiry date on the seventh anniversary of the original issuance date, to purchase one share of Common Stock. In addition, each of Series C Preferred Share was sold together with Series A Warrants to purchase one share of Common Stock for each share of Common Stock issuable upon conversion of the Series C Preferred Share and Series B Warrants to purchase one share of Common Stock for each share of Common Stock issuable upon conversion of the Series C Preferred Share. Each Share of Common Stock and accompanying Warrants was sold at a combined public offering price of $0.20 and each Series C Preferred Share and accompanying Warrants was sold at a combined public offering price of $1,000.
The Shares, Series C Preferred Shares and Warrants were issued pursuant to an underwriting agreement, dated October 25, 2019. The net proceeds to the Company from the sale of the Shares, Series C Preferred Shares, and Warrants was approximately $4.52 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company.
As a result, due to the terms of the July 2018 underwritten public offering, any remaining outstanding Series A Convertible Preferred Stock and Series B Convertible Preferred Stock are amended to convert at the same rate of the Series C Convertible Preferred Shares.
On October 25, 2019, one holder of the Series A Convertible Preferred converted 75 shares into 375,000 shares of the Company’s common stock.
During October and November, 2019, six holders of the Series C Preferred converted 990 shares into 4.95 million shares of the Company’s common stock.
Director Consulting Agreement
Effective as of May 1, 2019, the Company entered into a Statement of Work (the “May 1, 2019 SOW”) pursuant to a Consulting Agreement, dated as of February 22, 2019, between the Company and i.e. Advising, LLC (the “Consultant”). Thomas Isett, a director of the Company, is the Managing Director and sole owner of the Consultant. The Consultant has been retained by the Company as a strategy and management consultant through December 31, 2019, with services to be provided pursuant to statements of work that may be entered into between the Company and Consultant from time to time. The May 1, 2019 SOW (“Initial SOW”) had a term from May 1, 2019 to August 31, 2019. During August 2019, an amendment was executed extending the term through September 30, 2019. In addition, a second amendment was executed during September 2019, further extending the term through October 31, 2019. The engagement under the Initial SOW is being conducted on a retainer basis for the director, as the primary engagement resource, at a rate of $40,000 per month, and on a time and materials basis for all other engagement resources provided by the Consultant, which are billable at the rate of $85.00 to $450 per hour.
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