Page 7 of 9 – SEC Filing
| CUSIP No. 00547W208 | SCHEDULE 13D | Page 7 of 9 |
(b) The Reporting Persons share the power
to vote or to direct the vote and dispose or to direct the disposition of 1,635,312 shares of Common Stock.
(c) None.
(d) None.
(e) Not applicable.
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer** |
On November 10, 2010, the Company and Eses
entered into a Stock Purchase Agreement that has subsequently been terminated as described above in Item 4, pursuant to which Eses
purchased thirty million three hundred twenty(30,000,320) shares of the Company’s Common Stock. As described above in Items
3 and 4, on June 30, 2011, November 10, 2011 and January 30, 2012, respectively, Eses and the Company entered into the First SPA
Amendment, the Second SPA Amendment and the Third SPA Amendment, each of which amended certain provisions of the Stock Purchase
Agreement. The following represents a summary of the surviving terms of the Stock Purchase Agreement, and Registration Rights Agreement
(as defined below) that remain in effect.
Board Representation. Eses has
the right to designate a representative, reasonably satisfactory to the Company, to attend all meetings of the Board in a non-voting
observer capacity. The Company must also permit a representative of Eses to visit and inspect the Company’s offices and discuss
the Company’s affairs, finances and business with its officers. This right will terminate if: (i) Eses beneficially owns
less than 10% of the outstanding shares of Common Stock; (ii) Eses divests shares resulting in its holding fewer than twenty million
(20,000,000) shares of Common Stock; or (iii) all or substantially all of the assets of the Company are sold or a merger, consolidation
or similar transaction occurs which causes the shareholders of the Company immediately before the transaction to hold less than
a majority of the outstanding shares of the Company immediately after consummation of the transaction.
Registration Rights Agreement. The
Company and Eses have entered into a registration rights agreement, dated as of November 10, 2010 (the “Registration Rights
Agreement”). The Registration Rights Agreement was previously filed with the SEC as an exhibit to the Statement, and
is hereby incorporated herein by reference. Pursuant to the Registration Rights Agreement, the Company agreed to grant normal and
customary piggyback registration rights with respect to the shares of Common Stock purchased pursuant to the Stock Purchase Agreement.
Use of Funds. The use of the funds
received from the sale of stock pursuant to the Stock Purchase Agreement generally may only be used by the Company for the purposes
listed in Exhibit C to the Stock Purchase Agreement. The First SPA Amendment, however, provides that the proceeds of the First
Milestone Closing may also be used by the Company to pay any unconverted principal and interest due on the Company’s 10%
Senior Secured Convertible Notes.
Except as set forth in the Stock Purchase
Agreement and Registration Rights Agreement, to the best knowledge of the Reporting Persons, there exist no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person
with respect to any securities of the Company, including but not limited to transfer or voting of any securities of the Company,
finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
| ** | Shares of Common Stock reported under this item do not reflect the 1-for-17 reverse stock split effected by the Company on December 12, 2013. |
