Filing Details

SCHEDULE 13D
CUSIP No: 92407M206	Page 3 of 13

SCHEDULE 13D
CUSIP No: 92407M206	Page 4 of 13

SCHEDULE 13D
CUSIP No: 92407M206	Page 5 of 13

SCHEDULE 13D
CUSIP No: 92407M206	Page 6 of 13

SCHEDULE 13D
CUSIP No: 92407M206	Page 7 of 13

As previously disclosed in Amendment No.1, filed by the Reporting Persons on December 29, 2014, a total of $6,854,812.39 was paid to acquire the Shares and Warrants (as defined in Amendment No. 1) acquired by the Living Trust, Grandchildren LLC, Tino Trust, Tanya Trust, Therese Trust and Continuation Trust in connection with the Purchase Agreement (as defined in Amendment No. 1), including $1,951,833.54 for the Shares and Warrants acquired by the Living Trust and $4,902,978.85 for the Shares and Warrants acquired by the George Schuler Entities.  Each of the Living Trust, Grandchildren LLC, Tino Trust, Tanya Trust, Therese Trust and Continuation Trust, along with other individuals and entities, (collectively, the “Investors”) entered into the Purchase Agreement (as defined in Amendment No. 1) with the Issuer on December 19, 2014.  Pursuant to the terms of the Purchase Agreement, on December 23, 2014, the date of the closing, the Issuer sold an aggregate of 6,944,445 Shares to the Investors for the price of $1.44 per share, including 1,288,339 Shares to the Living Trust, 952,838 Shares to each of the Tino Trust, Tanya Trust and Therese Trust, and 188,888 Shares to each of the Continuation Trust and Grandchildren LLC.

In addition, pursuant to the terms of the Purchase Agreement, upon closing on December 23, 2014, the Issuer sold Warrants (as defined in Amendment No.1) to purchase an aggregate of 4,166,659 Shares to the Investors for the price of $0.125 per Warrant, including Warrants to purchase 773,003 Shares to the Living Trust, Warrants to purchase 571,702 Shares to each of the Tino Trust, Tanya Trust and Therese Trust, and Warrants to purchase 113,332 Shares to each of the Continuation Trust and Grandchildren LLC.  The Warrants have an exercise price of $2.00 per Warrant Share, became exercisable on June 23, 2015, and expire on December 23, 2017.  The funds used to acquire the Shares and Warrants were personal funds of Mr. Schuler that had been entrusted to the Living Trust, Grandchildren LLC, Tino Trust, Tanya Trust, Therese Trust and Continuation Trust.

 

On August 25, 2017, each of the Living Trust, Grandchildren LLC, Tino Trust, Tanya Trust, Therese Trust and Continuation Trust entered into an Agreement to Reprice and Exercise Warrants (the “Letter Agreement”) with the Issuer, pursuant to which the exercise price of the Warrants (as defined in Amendment No. 1) was reduced to $1.00 per Warrant Share if such Warrants were exercised on or before August 31, 2017.  Pursuant to the Letter Agreements, on August 31, 2017, each of the Living Trust, Grandchildren LLC, Tino Trust, Tanya Trust, Therese Trust and Continuation Trust exercised the Warrants to acquire an aggregate of 2,714,773 Shares at an exercise price of $1.00 per Warrant Share, for an aggregate price of $2,714,773.  The Warrants were exercised as follows: the Living Trust exercised 773,003 Warrants to purchase 773,000 Shares, each of the Tino Trust, Tanya Trust and Therese Trust exercised 571,702 Warrants to purchase 571,702 Shares, and each of the Continuation Trust and Grandchildren LLC exercised 113,332 Warrants to purchase 113,332 Shares.  The funds used to acquire the Shares and Warrants were personal funds of Mr. Schuler that had been entrusted to the Living Trust, Grandchildren LLC, Tino Trust, Tanya Trust, Therese Trust and Continuation Trust.

The response to Item 3 of this Amendment No. 7 is incorporated herein by reference.

 

(a, b)  As of the date hereof, Mr. Schuler may be deemed to beneficially own, in the aggregate, 11,308,812 Shares, representing approximately 19.0% of the Shares outstanding.  This amount consists of (A) 6,673,029 Shares held directly by Mr. Schuler, and (B) 3,905,223 Shares and Warrants to acquire 730,560 Shares held by the Living Trust.  As of the date hereof, the Living Trust may be deemed beneficially own, in the aggregate, 4,635,783 Shares, representing approximately 7.8% of the Shares outstanding.  This amount consists of 3,905,223 Shares and Warrants to acquire 730,560 Shares.  These percentages of Shares outstanding are based on a total of approximately 59,609,415 Shares outstanding, which is the sum of: (1) the 56,164,082 Shares outstanding as of July 31, 2017, as disclosed in the Issuer’s quarterly report on Form 10-Q, filed on August 11, 2017; (2) the 2,714,773 Warrant Shares exercised by the Living Trust and the George Schuler Entities pursuant to the Letter Agreements; and (3) for purposes of calculating beneficial ownership pursuant to Rule 13d-3(d)(1)(i) under the Exchange Act, the 730,560 Shares issuable upon exercise of the Warrants held by the Living Trust.

 

As sole trustee of the Living Trust, Mr. Schuler and the Living Trust share the power to vote or to direct the vote, and the power to dispose or to direct the disposition of, the Shares held by the Living Trust.

As of the date hereof, George Schuler may be deemed to beneficially own, in the aggregate 11,511,898, representing approximately 19.1% of the Shares outstanding.  This amount consists of (A) 2,897,021 Shares and Warrants to acquire 365,072 Shares held by the Tino Trust; (B) 2,897,021 Shares and Warrants to acquire 365,072 Shares held by the Tanya Trust; (C) 2,897,021 Shares and Warrants to acquire 365,072 Shares held by the Therese Trust; (D) 840,003 Shares and Warrants to acquire 365,072 Shares held by the Continuation Trust; (E) 353,240 Shares held by the Grandchildren LLC; (F) 26,000 Shares held by Gayle Schuler; and (G) 141,304 Shares held by Seascape Partners L.P.  The percent of Shares outstanding is based on a total of approximately 60,339,143 Shares outstanding, which is the sum of:  (1) the 56,164,082 Shares outstanding as of July 31, 2017, as disclosed in the Issuer’s quarterly report on Form 10-Q, filed on August 11, 2017; (2) the 2,714,773 Warrant Shares exercised by the Living Trust and the George Schuler Entities pursuant to the Letter Agreements; and (3) for purposes of calculating beneficial ownership pursuant to Rule 13d-3(d)(1)(i) under the Exchange Act, the aggregate of 1,460,288 Shares issuable upon exercise of the Warrants held by the George Schuler Entities.

Exhibit 20:  Form of Letter Agreement, by and between the Issuer and certain investors (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Issuer on August 28, 2017)

 

		Jack W. Schuler
		/s/ Jack W. Schuler

		Jack W. Schuler Living Trust
		/s/ Jack W. Schuler
		Name: Jack W. Schuler
		Title:   Trustee

 

		H. George Schuler
		/s/ H. George Schuler