24. SUBSEQUENT EVENTS | 12 Months Ended |
Apr. 30, 2013 |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 24. SUBSEQUENT EVENTS |
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Common Stock |
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On May 1, 2013, the Company issued 3,125,000 restricted shares of its common stock to a Joseph Belli for services rendered valued at $7,500. The fair value of the shares issued was $93,750 based on the quoted market price of the shares at the time of issuance. |
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On May 1, 2013, the Company issued 3,125,000 restricted shares of its common stock to a Kyle Reinholm for services rendered valued at $7,500. The fair value of the shares issued was $93,750 based on the quoted market price of the shares at the time of issuance. |
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On May 1, 2013, the Company issued 25,000,000 restricted shares of its common stock to a John Sokol for services rendered valued at $60,000. The fair value of the shares issued was $750,000 based on the quoted market price of the shares at the time of issuance. |
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On May 1, 2013, the Company issued 10,416,667 restricted shares of its common stock to a Leonard Moreno for services rendered valued at $25,000. The fair value of the shares issued was $312,500 based on the quoted market price of the shares at the time of issuance. |
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On May 1, 2013, the Company issued 9,375,000 restricted shares of its common stock to Timothy J. Owens, the CEO of the Company, for services rendered valued at $22,500. The fair value of the shares issued was $281,250 based on the quoted market price of the shares at the time of issuance. |
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On August 1, 2013, the Company issued 9,375,000 restricted shares of its common stock to Timothy J. Owens, the CEO of the Company, for services rendered valued at $22,500. |
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On August 1, 2013, the Company issued 3,125,000 restricted shares of its common stock to a Kyle Reinholm for services rendered valued at $7,500. |
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On January 6, 2014, the Company issued 20,000,000 restricted shares of its common stock to Darin Ocasio for services rendered valued at $55,000. |
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On August 22, 2014, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation in order to increase the Company’s authorized capital stock from 900,000,000 shares of common stock to 5,000,000,000 shares of common stock. |
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On September 10, 2014, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation in order to decrease the par value of the Company’s capital stock from $0.001 to $0.0001. |
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Preferred Stock |
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On August 20, 2014, the Company entered into a Letter Agreement with Worldwide Beverage Imports, LLC., pursuant to which WBI agreed to forgive $100,000 of payables owed by the Company to WBI in exchange for the Company’s issuance to WBI of 10,000 shares of newly designated preferred stock that holds voting rights equal to 230,000 votes per share. |
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In consideration for and as an inducement to enter into the Amendment, on August 21, 2014 the Company issued to WBI 10,000 shares of the Company’s newly created Series E Preferred. |
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On August 21, 2014, the Company filed a Certificate of Designation of Series E Preferred Stock with the Secretary of State of Delaware. Pursuant to the Certificate of Designation, 15,000 shares of preferred stock were designated Series E Preferred Stock, which Series E Preferred Stock holds no conversion rights or rights to dividends. The Series E Preferred Stock will vote as a single class with the common stock and the holders of the Series E Preferred Stock will have the number of votes equal to 230,000 times the number of shares of Series E Preferred Stock. Upon liquidation, the holders of the Series E Preferred Stock will have the right to receive, prior to any distribution with respect to the common stock, but subject to the rights of the holders of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, the Stated Value (plus any other fees or liquidated damages payable thereon). |
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Debentures |
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On May 1, 2013, the Company issued, in lieu of cash payment for past due accounts payables equal to $670,000, a convertible debenture to Worldwide Beverage Imports, LLC. in the aggregate principal amount of $ 670,000. The debenture accrues interest at 8% per annum. The debenture, which includes all principal and interest, are due in full on November 1, 2013. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the lesser of (i) the closing price of the Company’s common stock on November 2, 2013; or (ii) the closing price of the Company’s common stock on the date immediately prior to the date the holder of the debenture requests their conversion. However, in the event of a default under the debenture, the debenture will be convertible at a 38% discount to market. |
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On May 1, 2013, the Company issued, in lieu of cash payment for past due accounts payables equal to $26,423, a convertible debenture to Darrin Ocasio in the aggregate principal amount of $26,423. The debenture accrues interest at 8% per annum. The debenture, which includes all principal and interest, are due in full on May 1, 2014. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the greater of (i) the par value of the Company’s common stock; or (ii) 50% of the average closing price of the Company’s common stock for the 10 days prior to the date the holder of the debenture requests their conversion. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is changed to a variable conversion price which equals 62% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On May 1, 2013, the Company issued, in lieu of cash payment for past due accounts payables equal to $14,000, a convertible debenture to Steve Chaussy in the aggregate principal amount of $14,000. The debenture accrues interest at 6% per annum. The debenture, which includes all principal and interest, are due in full on November 1, 2013. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the lesser of (i) the closing price of the Company’s common stock on the date of issuance; or (ii) the closing price of the Company’s common stock prior to the conversion date. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is changed to a variable conversion price which equals 70% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On May 1, 2013, the Company issued, in lieu of cash payment for consulting services equal to $40,243, a convertible debenture to the Law Office of Sheldon H. Gobstein Esq. in the aggregate principal amount of $40,243. The debenture accrues interest at 8% per annum. The debenture, which includes all principal and interest, are due in full on November 1, 2013. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the lesser of (i) the closing price of the Company’s common stock on the date of issuance; or (ii) the closing price of the Company’s common stock prior to the conversion date. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is change to a variable conversion price which equals 62% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On May 2, 2013, the Company issued, in lieu of cash payment for past due accounts payables equal to $25,000, a convertible debenture to SGT Enterprises, Inc. in the aggregate principal amount of $25,000. The debenture accrues interest at 6% per annum. The debenture, which includes all principal and interest, are due in full on November 2, 2013. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the lesser of (i) the closing price of the Company’s common stock on the date of issuance; or (ii) the closing price of the Company’s common stock prior to the conversion date. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is change to a variable conversion price which equals 80% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On May 15, 2013, the Company issued, in lieu of cash payment for past due accounts payables equal to $68,149, a convertible debenture to Urstadt Biddle Properties, Inc. in the aggregate principal amount of $68,149. The debenture accrues interest at 6% per annum. The debenture, which includes all principal and interest, are due in full on November 15, 2013. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the lesser of (i) the closing price of the Company’s common stock on the date of issuance; or (ii) the closing price of the Company’s common stock prior to the conversion date. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is change to a variable conversion price which equals 80% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On May 27, 2013, the Company issued, in lieu of cash payment for past due accounts payables equal to $43,000, a convertible debenture to Charles Menzies in the aggregate principal amount of $43,000. The debenture accrues interest at 8% per annum. The debenture, which includes all principal and interest, are due in full on November 27, 2013. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the lesser of (i) the closing price of the Company’s common stock on the date of issuance; or (ii) the closing price of the Company’s common stock prior to the conversion date. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is change to a variable conversion price which equals 75% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On July 15, 2013, the Company issued, in lieu of cash payment for past due accounts payables equal to $30,000, a convertible debenture to Ted Corbett in the aggregate principal amount of $30,000. The debenture accrues interest at 6% per annum. The debenture, which includes all principal and interest, are due in full on January 15, 2014. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the lesser of (i) the closing price of the Company’s common stock on the date of issuance; or (ii) the closing price of the Company’s common stock prior to the conversion date. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is change to a variable conversion price which equals 80% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On August 9, 2013, the Company entered into a first amendment agreement with IBC Funds LLC (“IBC”), to that certain 8% Convertible Unsecured Promissory Note in the principal amount of $35,000, dated as of November 1, 2012 and due May 1, 2013. The convertible promissory note was originally issued to Worldwide Beverage Imports on November 1, 2012 and subsequently assigned to a third party investor whom IBC acquired the note. Pursuant to the amendment, IBC agreed to extend the maturity date of the note from May 1, 2013 to May 1, 2014 and to waive, if any, existing or prior defaults under the note and the Company agreed to (i) amend the conversion price of the note to equal 35% of the lowest historical traded price of the Company’s common stock. |
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On September 1, 2013, the Company issued a convertible debenture to Darin Ocasio in the aggregate principal amount of $25,783. The debenture accrues interest at 8% per annum. The debenture, which includes all principal and interest, are due in full on September 1, 2014. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the greater of (i) the par value of the Company’s common stock; or (ii) 50% of the average closing price of the Company’s common stock 10 days prior to the conversion date. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is change to a variable conversion price which equals 62% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On October 29, 2013, a third party investor assigned a $70,000 convertible promissory note to IBC Funds LLC. The convertible promissory note was originally issued to Worldwide Beverage Imports on November 1, 2012 and subsequently assigned to a third party investor whom IBC acquired the note. |
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On November 25, 2013, a third party investor assigned a $150,000 convertible promissory note to IBC Funds LLC. The convertible promissory note was originally issued to Worldwide Beverage Imports on November 1, 2012 and subsequently assigned to a third party investor whom IBC acquired the note. |
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On January 6, 2014, a third party investor assigned a $200,000 convertible promissory note to IBC Funds LLC. The convertible promissory note was originally issued to Worldwide Beverage Imports on November 1, 2012 and subsequently assigned to a third party investor whom IBC acquired the note. |
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On January 6, 2014, the Company issued a convertible debenture to Timothy Owens, CEO of the Company, in the aggregate principal amount of $37,500. The debenture accrues interest at 6% per annum. The debenture, which includes all principal and interest, are due in full on October 6, 2014. The debenture is convertible, at the option of the holder, into shares of common stock of the Company at the greater of (i) the par value of the Company’s common stock; or (ii) 50% of the average closing price of the Company’s common stock for the 10 days prior to the conversion date. There is a mandatory conversion provision if the Company’s common stock exceeds $2.00 per share for 10 consecutive trading days. In the event of default, the conversion price is changed to a variable conversion price which equals 36% of the average of the lowest 3 closing prices 10 days prior to the conversion date. |
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On January 9, 2014, the Company entered into a first amendment agreement with IBC Funds LLC. to certain 8% Convertible Unsecured Promissory Notes in the principal amounts of $70,000, $150,000, and $200,000, which notes were originally dates as of November 1, 2013 and May 1, 2013. The convertible promissory notes were originally issued to Worldwide Beverage Imports on November 1, 2012 and subsequently assigned to a third party investor whom IBC acquired the note. Pursuant to the amendment, IBC agreed to extend the maturity of the notes from May 1, 2013 to January 9, 2015 and to waive, if any, existing or prior defaults under the notes and the Company agreed to (i) amend the conversion price of the notes to equal 35% of the lowest historical traded price of the Company’s common stock. |
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On January 16, 2014, the Company issued, four convertible debentures to a third party investor in the aggregate principal amount of $455,000. The Investor previously provided the aggregate purchase price of $455,000 to the Company in four separate tranches ($35,000 in August 2013, $70,000 in October 2013, $150,000 in November 2013 and $200,000 in January 2014). The Convertible Debentures accrue interest at 8% per annum. The $35,000 Convertible Debenture matures on August 8, 2014. The $70,000 Convertible Debenture matures on October 31, 2014. The $150,000 Convertible Debenture matures on May 26, 2014. The $200,000 Convertible Debenture matures on July 7, 2014. |
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The Convertible Debentures are convertible, at the option of the holder, into shares of the Company’s common stock at a conversion price equal to 35% of the lowest trading price of Common Stock for the 24 months preceding their original issuance dates. However, in the event of a default under the Convertible Debentures, the Convertible Debentures will be convertible at a 75% discount to the average of the three lowest trading prices of the ten trading days prior to such conversion. In no event may the Convertible Notes be converted at a conversion price below the par value of Common Stock. |
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On February 18, 2014, a third party investor assigned a $25,000 convertible promissory note to IBC Funds LLC. The convertible promissory note was originally issued to Worldwide Beverage Imports on November 1, 2012 and subsequently assigned to a third party investor whom IBC acquired the note. |
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On February 24, 2014, the Company entered into a second amendment agreement with IBC Funds LLC, to certain 8% Convertible Unsecured Promissory Notes (the “Notes”) in principal amount of $35,000, $70,000, $150,000 and $200,000, which Notes were originally dated as of November 1, 2012 and due May 1, 2013. The Notes were amended by that certain First Amendment Agreement to Convertible Promissory Notes dated January 9, 2014. Pursuant to the amendment, IBC agreed to waive any and all interest accrued on the Notes through March 15, 2014 and the Company agreed to include as additional events of default under the Notes the Company’s failure (i) to file with the Securities Exchange Commission, by March 1, 2014, the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2013, which failure is not cured within 3 Business Days; and (ii) to file with the Securities Exchange Commission, by March 15, 2014, the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended July 31, 2013 and October 31, 2013, which failure is not cured within 3 Business Days. |
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On March 5, 2014, the Company defaulted on that certain 8% Convertible Unsecured Promissory Notes (the “Notes”) in principal amount of $35,000, $70,000, $150,000 and $200,000, which Notes were originally dated as of November 1, 2012 and due May 1, 2013, as amended by that certain second amendment agreement dated February 24, 2014. |
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On March 6, 2014 and March 11, 2014, the Company issued two convertible debentures (each a “Convertible Debenture” and collectively, the “Convertible Debentures”) to a third party investor (the “Investor”) in the aggregate principal amount of $255,000. The Investor provided an aggregate purchase price of $255,000 (the “Aggregate Purchase Price”) to the Company. The Convertible Debentures accrue interest at 8% per annum. The $125,000 Convertible Debenture matures on September 6, 2014. The $130,000 Convertible Debenture matures on September 11, 2014. The Convertible Debentures are convertible, at the option of the holder, into shares of the Company’s common stock at a conversion price equal to 35% of the lowest trading price of Common Stock for the 24 months preceding their original issuance dates. However, in the event of a default under the Convertible Debentures, the Convertible Debentures will be convertible at a 75% discount to the average of the three lowest trading prices of the ten trading days prior to such conversion. In no event may the Convertible Notes be converted at a conversion price below the par value of Common Stock. |
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On March 6, 2014 and on March 11, 2014, the Company entered into first amendment agreements (the “Amendments”) with IBC Funds LLC (“IBC”), to certain 8% Convertible Unsecured Promissory Notes (the “Notes”) in the principal amounts of $125,000 and $130,000, which Notes were originally dated as of November 1, 2012 and due May 1, 2013. The Notes were originally issued to World Wide Beverage Imports, LLC (“WBI”) on November 1, 2012. WBI assigned the Notes to a third party from whom IBC acquired the Notes. Pursuant to the Amendments, IBC agreed to extend the maturity of the Notes from May 1, 2013 to March 6, 2015 and March 11, 2015 and to waive, if any, existing or prior defaults under the Notes and the Company agreed to (i) amend the conversion price of the Notes to the equal 35% of the lowest historical traded price of the Company’s common stock. |
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On June 12, 2014, the Company issued a convertible unsecured promissory note (the "Note") to a third party investor (the “Investor”) in the aggregate principal amount of $50,000. The Note accrues interest at 8% per annum. The Note matures December 12, 2014. The Note is convertible, at the option of the holder, into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price equal to the greater of (i) the par value of Common Stock or (ii) 35% of the lowest trading price of Common Stock for the 24 months preceding their original issuance dates, which correspond to the dates on which the respective portion of the Aggregate Purchase Price was received by the Company. However, in the event of a default under the Note, the Note will be convertible at a 75% discount to the average of the three lowest trading prices of the ten trading days prior to such conversion. In no event may the Note be converted at a conversion price below the par value of Common Stock. |
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On September 10, 2014, the Company entered into first amendments with Tide Pool Ventures Corporation (“Tide Pool”) to certain convertible promissory notes in an aggregate principal amount of $200,000, which notes were originally dated November 1, 2012. The notes were originally issued to Worldwide Beverage Imports on November 1, 2012 and subsequently assigned to a third party investor whom Tide Pool acquired these notes. Pursuant to the amendment, Tide Pool agreed to extend the maturity until the first anniversary of the amendments and the Company agreed to amend the notes to include the conversion pricing at 38% of the average of the lowest 3 closing bid prices 10 days prior to the conversion date. |
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On September 10, 2014, the Company issued four convertible promissory notes to a third party investor. The notes bear interest at 8% per annum and contain an original issue discount of 20%. The notes mature 1 year from the date of issuance. |
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Other |
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On July 3, 2013, Mr. Charles Menzies, tendered his resignation from the Board of Directors of the Company, effective immediately. Mr. Menzies’ resignation was not as a result of any disagreements with the Company’s operations, policies or practices. |
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On July 26, 2013, the Circuit Court in the 12th Judicial Circuit in and for Sarasota County, Florida (the “Court”), entered an Order Granting Approval of Settlement Agreement (the “Order”) approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), in accordance with a Settlement Agreement (the “Settlement Agreement”) between Drinks Americas Holdings, Ltd. (the “Company”) and IBC Funds, LLC, a Nevada limited liability company (“IBC”), in the matter entitled IBC Funds, LLC v. Drinks Americas Holdings, Ltd., Case No. 2013 CA 5705 (the “Action”). IBC commenced the Action against the Company to recover $327,131.65 of an unpaid Convertible Debenture of the Company, which IBC had purchased from the Company on October 15, 2012 (the “Claim”). The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and IBC upon execution of the Order by the Court on July 26, 2013. |
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Pursuant to the terms of the Settlement Agreement approved by the Order, on July 26, 2013, the Company agreed to issue, in one or more tranches as necessary, that number of shares equal to $197,630.64 upon conversion to the Company’s common stock, $0.001 par value (the “Common Stock”) at a conversion rate equal to 35% of the lowest historical traded price of the Common Stock. |
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The Settlement Agreement provides that in no event shall the number of shares of Common Stock issued to IBC or its designee in connection with the Settlement Agreement, when aggregated with all other shares of Common Stock then beneficially owned by IBC and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder), result in the beneficial ownership by IBC and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.99% of the Common Stock. |
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Furthermore, the Settlement Agreement provides that, for so long as IBC or any of its affiliates hold any shares of Common Stock, the Company and its affiliates are prohibited from, among other actions, voting any shares of Common Stock owned or controlled by the Company or its affiliates, or soliciting any proxies or seeking to advise or influence any person with respect to any voting securities of the Company, in favor of: (1) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Company or any of its subsidiaries, (2) a sale or transfer of a material amount of assets of Company or any of its subsidiaries, (3) any change in the present board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, (4) any material change in the present capitalization or dividend policy of Company, (5) any other material change in Company’s business or corporate structure, (6) a change in Company’s charter, bylaws or instruments corresponding thereto (7) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (8) causing a class of equity securities of Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, (9) terminating the Company’s transfer agent (10) taking any action which would impede the purposes and objects of the Settlement Agreement or (11) taking any action, intention, plan or arrangement similar to any of those enumerated above. |
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The issuance of Common Stock to IBC pursuant to the terms of the Settlement Agreement approved by the Order is exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(10) thereof, as an issuance of securities in exchange for bona fide outstanding claims, where the terms and conditions of such issuance are approved by a court after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear. |
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On March 7, 2014, the Circuit Court in the 12th Judicial Circuit in and for Sarasota County, Florida (the “Court”), entered an Order Granting Approval of Settlement Agreement (the “Order”) approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), in accordance with a Settlement Agreement (the “Settlement Agreement”) between Drinks Americas Holdings, Ltd. (the “Company”) and IBC Funds, LLC, a Nevada limited liability company (“IBC”), in the matter entitled IBC Funds, LLC v. Drinks Americas Holdings, Ltd. , Case No. 2014 CA 001374 (the “Action”). IBC commenced the Action against the Company to recover $455,000.00 (the “Claim”), which Claim consists of the Notes (as defined below). The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and IBC upon execution of the Order by the Court on March 7, 2014. |
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Pursuant to the terms of the Settlement Agreement approved by the Order, the Company agreed to issue, in one or more tranches as necessary, that number of shares sufficient to satisfy the Claim amount upon conversion to the Company’s common stock, $0.001 par value (the “Common Stock”) at a conversion price equal to 25% of the lowest sale price of the Common Stock during the ten (10) trading days preceding the share request inclusive of the day of any share request. |
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The Settlement Agreement provides that in no event shall the number of shares of Common Stock issued to IBC or its designee in connection with the Settlement Agreement, when aggregated with all other shares of Common Stock then beneficially owned by IBC and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the rules and regulations thereunder), result in the beneficial ownership by IBC and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and the rules and regulations thereunder) at any time of more than 9.99% of the Common Stock. |
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Furthermore, the Settlement Agreement provides that, for so long as IBC or any of its affiliates hold any shares of Common Stock, the Company and its affiliates are prohibited from, among other actions, voting any shares of Common Stock owned or controlled by the Company or its affiliates, or soliciting any proxies or seeking to advise or influence any person with respect to any voting securities of the Company, in favor of: (1) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Company or any of its subsidiaries, (2) a sale or transfer of a material amount of assets of Company or any of its subsidiaries, (3) any change in the present board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, (4) any material change in the present capitalization or dividend policy of Company, (5) any other material change in Company’s business or corporate structure, (6) a change in Company’s charter, bylaws or instruments corresponding thereto (7) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (8) causing a class of equity securities of Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, (9) terminating the Company’s transfer agent (10) taking any action which would impede the purposes and objects of the Settlement Agreement or (11) taking any action, intention, plan or arrangement similar to any of those enumerated above. |
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The issuance of Common Stock to IBC pursuant to the terms of the Settlement Agreement approved by the Order is exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(10) thereof, as an issuance of securities in exchange for bona fide outstanding claims, where the terms and conditions of such issuance are approved by a court after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear. |
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On June 12, 2014, the Company entered into a Judgment Purchase Agreement (the "JPA") with IBC Funds LLC (the "Seller"), pursuant to which the Company bought from the Seller all right, title, and interest in and to the judgments against the Company and J. Patrick Kenny, held by the Seller. |
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The executed JPA provides that Seller sold and assigned to the Company all of the Seller's right, title, and interest in and to the Judgments in consideration for the Company's promise to pay the Seller the aggregate sum of $320,000.00 in accordance with a payment schedule included in the JPA. |
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