Page 9 of 15 – SEC Filing
The following constitutes
Amendment No. 6 to the Schedule 13D filed by the undersigned (the “Amendment No. 6”). This Amendment No. 6 amends the
Schedule 13D as specifically set forth herein.
| Item 3. | Source and Amount of Funds or Other Consideration. |
Item 3 is hereby amended and restated
to read as follows:
The Shares purchased by Series
One were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary
course of business) in open market purchases, except as otherwise noted, as set forth in Schedule A, which is incorporated by reference
herein. The aggregate purchase price of the 337,802 Shares beneficially owned by Series One is approximately $2,295,865, including
brokerage commissions. The aggregate purchase price of the call options currently exercisable onto 195,000 Shares beneficially
owned by Series One, as further described in Item 6 below, is approximately $672,060, including brokerage commissions.
The Shares purchased by VSO
II were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary
course of business) in open market purchases, except as otherwise noted, as set forth in Schedule A, which is incorporated by reference
herein. The aggregate purchase price of the 1,550,774 Shares beneficially owned by VSO II is approximately $10,588,357, including
brokerage commissions.
| Item 4. | Purpose of Transaction. |
Item 4 is hereby amended to add the following:
On January 5, 2018,
the Reporting Persons sent a letter (the “Demand Letter”) to the Issuer demanding to inspect certain books and records
of the Issuer to assess whether a majority of the Board, under the helm of Chairman Carl Schlachte, has breached its fiduciary
duties to stockholders by failing to keep themselves reasonably informed.
In the Demand Letter,
the Reporting Persons noted the Issuer’s prolonged underperformance under former CEO Victor Viegas’ stewardship. Yet,
despite this underperformance, the Reporting Persons questioned why the Board would request Mr. Viegas’ resignation, without
any succession planning. In the Reporting Persons view, such poor planning suggests a majority of the Board breached their fiduciary
duties in failing to keep themselves reasonably informed of Mr. Viegas’ conduct over the years. The Reporting Persons also
believe that the appointment of Mr. Schlachte as interim CEO is inadequate to protect stockholder value since Mr. Schlachte has
served as Chairman of the Board since July 2012 and should be held equally accountable as Mr. Viegas for the Issuer’s dismal
performance over the same period.
The Reporting Persons
also expressed their concerns in the Demand Letter with the Board’s restructuring plan, which included a 41% reduction in
workforce. While the Reporting Persons believe this is a step in the right direction, the Reporting Persons believe this should
have happened much earlier and question whether a majority of the Board kept themselves reasonably informed regarding management’s
budget proposals, business plans and overall strategy given the substantial size of the workforce reduction.
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