Page 8 of 11 – SEC Filing
In
May 2017, Joseph Hagan ceased to be a Manager of WealthColony Management Group, LLC and no longer shares the power to vote or
dispose of the securities of the Company owned by the Limited Partnership.
On
May 25, 2017, WealthColony Management Group, LLC, as the General Partner of the Limited Partnership, delivered a letter to the
Board of Directors of the Issuer on behalf of the Limited Partnership, requesting that the Board of Directors promptly (i) appoint
Jeffrey Freedman and Patrick Guadagno as members of the Board of Directors and (ii) accept the resignations of Jamieson Karson
and Ronald Crane as members of the Board of Directors. The letter advised the Board that upon reconstitution of the Board, the
Board will retain the services of Jamieson Karson as Chief Executive Officer until his replacement can be identified. The letter
further advised the Board that if the Board does not accept the proposal by 5:00 p.m. on Friday, May 26, 2017, WealthColony Management
Group, LLC reserves the right to pursue all other options to protect the Limited Partnership’s investment in the Issuer,
including, but not limited to, seeking to change the composition of the Issuer’s Board of Directors.
The
foregoing description of the May 25, 2017 letter is a summary, is not complete and is qualified in its entirety by reference to
the full text of the May 25, 2017 letter, a copy of which is attached to this Schedule 13D as Exhibit 4.
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, purchasing additional Common Stock or selling some or all of their Common Stock or other securities and, alone
or with others, pursuing discussions with the management, the Board of Directors, other shareholders of the Issuer and third parties
with regard to their investments in the Issuer, and/or otherwise changing their intention with respect to any and all matters
referred to in this Item 5 of Schedule 13D.
Item
6. INTEREST IN SECURITIES OF THE ISSUER
(a) As described
in Item 5, WealthColony Management Group, LLC and Jeffrey Freedman may be deemed the beneficial owners of up to 66,571,000 shares
of Common Stock representing approximately 49.4% of the outstanding shares of the Issuer’s Common Stock. This does
not include shares issuable upon the conversion of Series B Convertible Preferred Stock which are issuable upon exercise of the
Warrant.
Joseph Hagan may be deemed the beneficial owner of up to 2,270,000 shares of
Common Stock representing approximately 0.8% of the outstanding shares of the Issuer’s outstanding Common Stock. Inasmuch
as Joseph Hagan is not the beneficial owner of 5% or more of the Issuer’s outstanding Common Stock, he will no longer be
a Reporting Person after the filing of this Amendment No. 1 to Schedule 13D.
The
aggregate percentage of Common Stock beneficially owned by the Reporting Persons is calculated based upon 288,845,379
shares of Common Stock outstanding as of May 4, 2017, as reported by the Issuer in its Quarterly Report on Form 10-Q for the
quarterly period ended February 28, 2017.
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