Subsequent Events |
6 Months Ended | |
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Jun. 30, 2018 | ||
| Subsequent Events [Abstract] | ||
| Subsequent Events [Text Block] |
Note 11. Subsequent Events Legal Settlement Robert Haydak In June 2018, the Company’s former President, Robert Haydak, filed suit against the Company. The Company and Mr. Haydak resolved the suit effective July 2018 with the Company agreeing on a cash settlement of $50,000 and delivery of certain MMA promotion fixed assets. The Company has accrued the settlement as of June 30, 2018 which is included within discontinued operations - general and administrative expense. Related Party Note Payable On July 5, 2018, Joe Gamberale, a director of the Company, agreed to convert $150,000 of Company debt into 402,685 shares of common stock and warrants to purchase 100,671 shares of common stock at an exercise price of $0.3725 (the same basic terms as the SCWorx investment outlined above (a conversion rate and exercise price of $0.3725, with the same warrant coverage). Consulting Agreement In July 2018, the Company engaged a valuation expert to complete valuation procedures of behalf of management and the Board with a cost of $100,000. Employee Settlement In July 2018, the Company entered a settlement agreement, effective as of May 31, 2018, with a former employee, in relation to the termination of his employment. The Company agreed to pay the former employee $129,800 and issue a fully vested stock option grant dated July 30, 2018 for 75,000 common shares with a life of 5 years and exercise price of $0.20. SCWorx Transactions Pursuant to the SCWorx SPA, on July 31, 2018, the Company sold the Purchaser convertible notes in the principal amount of $60,000 and warrants to purchase 40,269 shares of common stock, for an aggregate purchase price of $60,000. The Note bears interest at 10% annually and matures on July 31, 2019. The warrant has an exercise price of $0.37525, term of five years and was vested upon grant. On August 20, 2018, the Company entered into the Stock Exchange Agreement (SEA) with SCWorx Corp., a software as services (SAAS) company servicing the healthcare industry. Under the Agreement, the Company agreed to purchase from the SCWorx shareholders all the issued and outstanding capital stock of SCWorx, in exchange for which the Company agreed to issue at the closing that number of shares of Company common stock equal to the quotient of $50,000,000 divided by the closing price of the Company’s common stock upon the completion of the acquisition (subject to a cap of $0.67 per share). Pursuant to the SCWorx SPA, on August 21, 2018, SCWorx funded $160,000 of the remaining $190,000 of the $250,000 tranche which was due upon execution of the Stock Exchange Agreement with SCWorx and issued warrants to purchase 127,517 shares of common stock. SCWorx has to date funded $720,000 of the aggregate $1 million contemplated by the SCWorx SPA. The warrant has an exercise price of $.3725, term of five years, and was vested upon grant. Consummation of the transactions contemplated by the SEA is subject to satisfaction of a variety of conditions, including approval by the Company and SCWorx’ shareholders and the combined company meeting the listing qualifications for initial inclusion on the Nasdaq Stock Market. Consequently, there is no assurance that the Company will be able to consummate the transactions contemplated by the SEA. If the Company completes the planned acquisition, management may dispose of the fighter management and ticketing businesses and focus on the SCWorx SAAS business, which is focused on streamlining the three core healthcare provider systems; Supply Chain, Financial and Clinical (EMR) enabling providers’ enterprise systems to work as one automated and seamless business management system. SCWorx offers an advanced software solution for the management of health care providers’ foundational business applications, empowering its customers to significantly reduce costs, drive better clinical outcomes and enhance their revenue. SCWorx supports the interrelationship between the three core healthcare provider systems: Supply Chain, Financial and Clinical. This solution moves data from one application to another to drive supply cost reductions, optimize contracts, increase supply chain management (SCM) cost visibility and control rebates and contract administration fees. Employee Separation
In August 2018, the Company entered a separation agreement with a former employee in relation to an employment agreement. The Company agreed to pay the former employee $50,000 in exchange for terminating the employment agreement. Warrant Exercise Subsequent to the announcement of the SCWorx acquisition, as of August 31, 2018 the Company has received warrant exercise notices resulting in the issuance of 465,000 shares and gross proceeds of approximately $135,000. NASDAQ Notice
As previously reported, the Company has not been in compliance with Nasdaq’s minimum bid price requirement of $1.00 per share, as set forth in Nasdaq Listing Rule 5550(a)(2), for continued listing on Nasdaq. On August 29, 2018, the Nasdaq officially notified the Company that it (i) did not meet the Nasdaq’s stockholder equity requirement of $2.5 million for continued listing, as set forth in Nasdaq Listing Rule 5550(b)(1), (ii) continues to not meet the Nasdaq’s minimum bid price requirement of $1.00 per share, for continued listing, as set forth in Nasdaq Listing Rule 5550(a)(2), and (iii) did not meet the Nasdaq periodic reporting requirement set forth in Nasdaq Listing Rule 5250(c)(1) because the Company had not as of August 29, 2018, filed this Quarterly Report on Form 10Q for the quarter ended June 30 ,2018. As a result, per the Nasdaq Notice, the Company’s securities will be scheduled for delisting from The Nasdaq Capital Market and will be suspended at the opening of business on September 7, 2018, and a Form 25-NSE will be filed with the Securities and Exchange Commission (the “SEC”), which will remove the Company’s securities from listing and registration on The Nasdaq Stock Market, unless the Company requests an appeal of the Nasdaq’s determination, which the Company intends to request. On August 30, 2018, the Company requested a hearing to appeal the Nasdaq’s delisting determination, which had the effect of staying the delisting during the pendency of the appeal. However, since one of the bases for delisting set forth in the Nasdaq Notice is a delinquent periodic report, the request for an appeal stays the suspension of trading on Nasdaq for only 15 days, but the filing of the delinquent periodic report (this Quarterly Report on Form 10Q) cures this delinquency, with the effect being that the Company’s common stock should trade on Nasdaq and the delisting will be stayed during the pendency of the Company’s appeal to Nasdaq. Nevertheless, the Company also filed a request for an extended stay which, if granted, would stay the suspension of trading during the pendency of the appeal. As noted above, the Company has noticed an appeal of the delisting determination to the Nasdaq and, in connection with such appeal, the Company intends to present to the Nasdaq the Company’s plan for meeting the Nasdaq’s original listing qualifications, in connection with the closing of the business combination of SCWorx. In order for the Company’s common stock to qualify for listing on the Nasdaq Stock Market following completion of the acquisition, the Company will be required to meet the Nasdaq’s listing standards for original listing (including among others its minimum bid price of $4 per share and minimum $5 million of stockholders’ equity). The Company expects that, on a combined basis with SCWorx, it should be able to meet the Nasdaq’s requirements for original listing. If the Company does not prevail on appeal, the Company’s common stock would be delisted from the Nasdaq Stock Market, which would result in the failure of a closing condition to the SCWorx business combination, which, if not waived by SCWorx, would result in the termination of such transaction, which would have a material adverse effect on the Company. |