Annual report pursuant to Section 13 and 15(d)

8. Equity

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8. Equity
12 Months Ended
Sep. 30, 2015
Equity [Abstract]  
Equity

During the year ended September 30, 2015, the Company issued:

 

· 191,136 shares of common stock for services rendered valued at $498,059. The value was based on the market value of the Company’s common stock on the date of issuance;

 

· 600,000 shares of common stock issued to officers of the Company as bonuses for services rendered in fiscal years 2012, 2013 and 2014 valued at $1,518,000. The value was based on the market value of the Company’s common stock on the date of issuance;

 

· 155,000 shares of common stock for net cash proceeds of $538,441;

 

· 801,378 share of common stock for the conversion of convertible notes and accrued interest of $635,756; and

 

· 630,252 shares of common stock as payment for the original issue discount fees associated with the Kingston agreement. The value of the shares was $2,004,202 based on the market value of the Company’s common stock at the date of issuance.

 

During the year ended September 30, 2014, the Company issued:

 

· 24,427 shares of common stock for services rendered valued at $9,654. The value was based on the market value of the Company’s common stock on the date of issuance;

 

· 3,115,147 shares of common stock for net cash proceeds of $13,681,054; and

 

· 50,000 share of common stock valued at $201,500 in connection with the acquisition of Modern Everyday, Inc.

 

At-The-Market Offerings of Common Stock (Chardan Capital Markets LLC)

 

On January 7, 2014, the Company entered into an Engagement Agreement (the “January 2014 Engagement Agreement”) with Chardan Capital Markets LLC (“Chardan”) pursuant to which the Company agreed to issue and sell up to a maximum aggregate amount of 1,980,000 shares of its common stock from time to time through Chardan as its sales agent, under its shelf Registration Statement on Form S-3. On May 16, 2014, the Company entered into another Engagement Agreement (the “May 2014 Engagement Agreement”) with Chardan pursuant to which the Company may issue and sell up to a maximum aggregate amount of 10,000,000 shares of its common stock from time to time through Chardan as its sales agent, under its shelf Registration Statement on Form S-3.

 

The Company will pay Chardan a commission equal to up to 3% of the gross proceeds from the sale of the common stock. Such commissions were $8,211 and $412,528 for the years ended September 30, 2015 and 2014, respectively. During the years ended September 30, 2015 and 2014, the Company sold 155,000 and 3,115,147 shares, respectively, of its common stock for net proceeds of $538,441 and $13,681,054, respectively.

  

2014 Omnibus Equity Incentive Plan

 

On January 7, 2014, our Board of Directors adopted the 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which authorizes the issuance of distribution equivalent rights, incentive stock options, non-qualified stock options, performance stock, performance units, restricted ordinary shares, restricted stock units, stock appreciation rights, tandem stock appreciation rights and unrestricted ordinary shares to our officers, employees, directors, consultants and advisors. The Company has reserved up to 1,800,000 shares of common stock for issuance under the 2014 Plan. As required under Nasdaq Listing Rule 5635(c), the Company included a proposal at its 2014 Annual Meeting of Stockholders, which was held on July 11, 2014, to obtain approval of the 2014 Plan. The 2014 Plan was approved.

 

3-for-1 Forward Stock Split

 

On January 16, 2014, our Board of Directors approved a 3-for-1 forward stock split with respect to the Company’s common stock. Stockholders received three shares of common stock for every one share of common stock owned on the record date of February 3, 2014. The forward stock split was effective as of the close of trading on February 11, 2014. The additional shares were distributed as of the close of business on February 11, 2014. In connection with the forward stock split, the Company’s authorized shares of common stock also increased from 10,000,000 shares to 30,000,000 shares. All data for common stock, options and warrants have been adjusted to reflect the 3-for-1 forward stock split for all periods presented. In addition, all common stock prices, and per share data for all periods presented have been adjusted to reflect the 3-for-1 forward stock split.

 

Series E Convertible Preferred Stock

 

Pursuant to an existing tender offer, holders of 13,184 shares of the Company’s common stock exchanged said shares for 127,840 shares of Series E Convertible Preferred Stock, at the then $0.85 market value of the common stock. The shares carry a $0.30 per share liquidation preference and accrue dividends at the rate of 5% per annum on the liquidation preference per share, payable quarterly from legally available funds. If such funds are not available, dividends shall continue to accumulate until they can be paid from legally available funds. Holders of the preferred shares are entitled, after two years from issuance, to convert them into common shares on a hundred-to-one basis together with payment of $0.45 per converted share.

 

Dividends

 

During the years ended September 30, 2015 and 2014, the Company accrued dividends of $1,921 and $1,925, respectively, payable to holders of Series E preferred stock. At September 30, 2015 unpaid dividends were $959.