• Filing Date: 2020-08-03
  • Form Type: 10-Q
  • Description: Quarterly report
v3.20.2
SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

Exchange Agreement

 

 In an Exchange Agreements reached on June 30, 2020, certain holders of the 2019 Promissory Notes agreed to a redemption of approximately 77% of the remaining principal balance of the 2019 Promissory Notes as of June 30, 2020. Per the Exchange Agreements, $17,398,000, was redeemed in exchange for 4,349,497 shares of the Company’s common stock, at a rate of $4 per share. Of the amount redeemed for common stock, $14,833,000 was related to the existing principal balance, $784,000 was related to the portion of the exit fee associated with the notes subject to conversion, $279,000 was related to the PIK interest associated to the notes subject to conversion, and $1,502,000 was part of the premium percentage as the portion of the 2019 Promissory Notes were settled prior to the maturity date. The premium for redemption was not included in the balance of the 2019 Promissory Notes as of June 30. 2020. Following the Note Exchange, approximately $4,450,000 aggregate principal amount of the 2019 Promissory Notes will remain outstanding, plus an additional $216,000 related to the exit fee.

 

On July 15, 2020, the Company completed the Note Exchange. As a result of the Note Exchange, the Company now has approximately 27,292,043 shares of common stock issued and outstanding.

 

Equity Method Investment

 

In June of 2020, the Company announced a joint venture in which the Company has a 50 percent equity interest in it. Roker is designed to automate parking enforcement and enable higher revenue recovery for both public safety institutions and private businesses alike. In July 2020, the Company made an initial investment of $45,000 into the joint venture.

 

Departure of Chairman of the Board of Directors

 

On July 23, 2020, James K. McCarthy, Chairman of the Board of Directors of the Company notified the Company’s Board of Directors (the “Board”) of his intention to retire from the Company's Board, effective immediately. Mr. McCarthy did not advise the Company of any disagreement with the Company on any matter relating to its operations, policies or practices.

 

Effective upon Mr. McCarthy’s resignation as a director, the size of the Board has been reduced from eight to seven, and Mr. Robert Berman has been named the Executive Chairman of the Board.