| | Item 4 is hereby amended to add the following:
On October 10, 2012, St. George loaned $50,000 to the Issuer on the terms set forth in the Note, which was furnished as Exhibit 1 to the Schedule 13D, Amendment No. 1 filed by the reporting person on July 9, 2013.
On May 31, 2013, St. George assigned the Note as a gift to the reporting person, pursuant to that certain Contribution and Assignment Agreement dated May 31, 2013, between St. George and the reporting person.
The Note is convertible in whole or part, at the election of its holder, upon the occurrence of an Event of Default (as defined in the Note), including any failure by Pulse Systems, LLC (“Pulse Systems”), a wholly owned subsidiary of the Issuer, to cure a breach, continuing for a period of more than 30 days, of that certain Loan and Security Agreement dated March 31, 2009, as amended (the “Loan Agreement”), between Pulse Systems and Fifth Third Bank, an Ohio banking corporation as successor by merger with Fifth Third Bank, a Michigan banking corporation (“Fifth Third”).
The initial Loan Agreement and the First and Second Amendments thereto are attached as Exhibit 4.1 to the Current Report on Form 8-K filed by the Issuer on June 24, 2010. The Third Amendment to the Loan Agreement is attached as Exhibit 4.7 to the Annual Report on Form 10-K filed by the Issuer on October 13, 2011. The Fourth Amendment to the Loan Agreement is attached as Exhibit 4.11 to the Amendment to the Current Report on Form 8-K/A filed by the Issuer on August 27, 2012.
On May 29, 2013, Pulse Systems reported to Fifth Third that Pulse Systems had failed to meet a financial covenant against capital expenditures in excess of $200,000 for the period between July 1, 2012, through June 20, 2013, and that such failure had continued for more than 30 days, as disclosed in the Current Report on Form 8-K filed by the Issuer on June 12, 2013. Pulse System’s failure to cure its breach, continuing for a period of more than 30 days, of the Loan Agreement thus constituted an Event of Default under the Note.
The conversion price for a conversion of the Note upon an Event of Default is $0.004323 per share, as disclosed in the Issuer’s Quarterly Report on Form 10-Q filed on November 19, 2012.
On June 25, 2013, the reporting person elected to convert $3,782.625 of the outstanding balance of the Note at the conversion price of $0.004323 per share, whereupon the Issuer issued 875,000 shares of Common Stock to the reporting person, as disclosed in the Schedule 13D, Amendment No. 1 filed by the reporting person on July 9, 2013.
On October 24, 2014, the reporting person elected to convert $8,646.00 of the outstanding balance of the Note at the conversion price of $0.004323 per share, whereupon the Issuer issued 2,000,000 shares of Common Stock to the reporting person, as disclosed in this Schedule 13D, Amendment No. 2. |