Page 6 of 9 – SEC Filing
The Reporting Persons hold an aggregate par value of 20,158,800 of the Convertible Notes, which
contain a blocker provision that prohibits the conversion of the Convertible Notes by the Reporting Persons so as to not exceed 9.99% beneficial ownership of the number of outstanding shares of Common Stock of the Issuer at any time.
In addition, pursuant to the Board Observer Rights Letter dated as of October 30, 2017 by and between the Issuer and the Reporting
Persons, the Issuer agreed to grant the Reporting Persons board observer rights, and the Board has agreed to recommend to shareholders that they elect, at the next annual shareholders meeting in June 2018, a representative of the Reporting
Persons to serve as a director of the Issuer. A copy of the Board Observer Rights Letter is attached to the Issuers Form 6-K as Exhibit 99.5 and incorporated herein by reference
Finally, the Reporting Persons entered into a Standstill Agreement with Issuer dated as of October 30, 2017 whereby the Reporting Persons
have agreed that they will not purchase additional securities of the Issuer during the next year without the prior consent of the Board. A copy of the Standstill Agreement is attached to the Issuers Form
6-K as Exhibit 99.6 and incorporated herein by reference.
No Reporting Person has any present
plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a)(j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of
the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuers financial position and investment strategy, the
price levels of the Common Stock, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate
including, without limitation, engaging in communications with management and the Board, engaging in discussions with stockholders of the Issuer and others about the Issuer and the Reporting Persons investment, making proposals to the Issuer
concerning changes to the capitalization, ownership structure, board structure (including Board composition) or operations of the Issuer, purchasing additional Common Stock, selling some or all of their Common Stock, engaging in short selling of or
any hedging or similar transaction with respect to the Common Stock, or changing their intention with respect to any and all matters referred to in Item 4.
| Item 5. | Interest in Securities of the Issuer |
The responses to Item 4 are incorporated
herein by reference.
(a) The aggregate percentage of Common Stock reported to be owned by the Reporting Persons is based upon the sum of
(i) 79,762,386 shares of Common Stock outstanding, which is the total number of shares of Common Stock outstanding as of June 30, 2017, as reported in the Issuers Form 6-K filed with the Securities
and Exchange Commission on August 1, 2017 and (ii) 3,800,000, the number of shares of Common Stock receivable by the Reporting Persons upon conversion of the amount of the Convertible Notes presently convertible by the Reporting Persons.
