Quarterly report pursuant to Section 13 or 15(d)


6 Months Ended
Jun. 30, 2017
Subsequent Events [Abstract]  



Resignation of Chairman, CEO and President.  On July 24, 2017, Robert B. Saucier submitted a letter of resignation to the Board. Mr. Saucier resigned from his positions as Chairman of the Board, CEO and President in order to aid us in our expanded regulatory jurisdictional ambitions.  Mr. Saucier will remain a member of the Board. On July 24, 2017, the Board accepted Mr. Saucier’s resignations and appointed Mr. Saucier to serve as Executive Vice President of Business Development and Chief Product Officer. In these new positions, he will receive an annual salary of $225,000 and is eligible to receive performance-based bonuses and incentives, as well as employee benefits and other perquisites. There were no disputes between Mr. Saucier and us that caused Mr. Saucier to resign.


Appointment of new President and CEO.  Following the acceptance of Mr. Saucier’s resignation, on July 24, 2017, the Board appointed Todd P. Cravens to serve as CEO and President, effective immediately.  Mr. Cravens, age 45, was previously serving as our Vice President of Business Development, a position he had held since January 1, 2017.


Mr. Cravens’ employment agreement related to his position as Vice President of Business Development was terminated and superseded with a new employment agreement to reflect his new positions and responsibilities.


Pursuant to the new employment agreement (the “Cravens Employment Agreement”), Mr. Cravens will receive an annual base salary of $230,000, and is eligible for bonuses if and as approved by the Compensation Committee of the Board.  In addition, pursuant to the Cravens Employment Agreement, Mr. Cravens was granted options to purchase up to 450,000 shares of our restricted common stock, which vest as follows: as to the first 150,000 shares of stock, on July 26, 2017, (ii) as to the next 150,000 shares of stock, on August 1, 2018, and (iii) as to the next 150,000 shares of stock, on August 1, 2019, all pursuant to the terms of a Stock Option Grant Agreement by and between us and Mr. Cravens.  Provided that Mr. Cravens is a full-time employee on August 1, 2020, we agreed to grant to Mr. Cravens an option to purchase an additional 150,000 shares of our restricted common stock (the “2020 Annual Grant”) with a strike price equal to the price per share of our common stock as reported on OTC Markets on August 1, 2020 (or the nearest trading date thereafter), which option will vest on August 1, 2020 (or the nearest trading date thereafter). The term of the Cravens Employment Agreement is through July 26, 2020.  His duties include those commonly undertaken by the CEO and President of a public company in the same industry as us. Mr. Cravens is entitled to certain severance payments in the event his employment with us is terminated by us without cause following a change of control, or following termination of the Cravens Employment Agreement by Mr. Cravens.


Appointment of New Director.  On July 26, 2017, the Board appointed Mark A. Lipparelli as a member of the Board to fill a newly-created board seat and elected Mr. Lipparelli to serve as Chairman of the Board.


Repayment of related party note payable.  On August 11, 2017, we repaid in full the then-outstanding principal balance along with accrued and unpaid interest (in the aggregate amount of $459,683) on the Related Party Note Payable.  See Note 9 for further detail on the Related Party Note Payable. This payment constituted a Restricted Payment as defined in our Term Loan, and we received a waiver with respect to the payment from the administrative agent for the Term Loan.


Since we were not contractually required to retire the Related Party Note Payable until December 2018 and the full repayment was not contemplated as of June 30, 2017, no reclassification between the current and long-term portions of this note was recorded as of June 30, 2017.