The Company evaluated subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements were issued.

 

Extension of Related Party Notes

 

On October 14, 2016, the Company entered into amendments to two demand promissory notes, totaling $600,000, and a note payable for $200,000 related to the Umpqua Bank Business Loan Agreement with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. The amendments extend the due date from September 30, 2016 to December 31, 2016 and continue to provide for interest of 3% per annum and a second lien on company assets if not repaid by December 31, 2016 or converted into convertible debentures or equity on terms acceptable to the Holder.

 

Extension of Services Agreement

 

On October 18, 2016, the Company agreed to a six month extention to our investor relations agreement with Financial Genetics. The Company agreed to issue Financial Genetics 33,333 shares of our common stock per month for their services.

 

Issuance of Convertible Notes

 

On November 2, 2016, the Company closed two 10% Convertible Redeemable Note Purchase Agreements with an accredited investor and an affiliate of the Company for aggregate gross proceeds to the Company of $300,000. The notes are due on May 1, 2017 and may be paid in either $330,000 in cash or converted into equity securities on the same terms as the Company’s next financing transaction.

 

Garden State Securities, Inc., a FINRA member, acted as our exclusive placement agent. They received a 10% ($30,000) cash fee on the transaction.

 

Purchase of Original Issue Discount Convertible Promissory Note from Pulse Biologics

 

On November 2, 2016, Pulse Biologics, Inc. issued an Original Issue Discount Convertible Promissory Note to the Company. Pursuant to the Note, the Company loaned $260,000 with a principal amount of $286,000 to Pulse Biologics, Inc. The Note matures one year from issuance and bears interest at 5%. The principal and interest can be converted to Biologic common stock at the option of the Company. The Company will receive 150,000 shares of Pulse Biologics common stock as partial consideration for purchasing the Note.

 

In addition, the Company and Pulse Biologics agreed to negotiate in good faith to enter a joint development agreement and subsequent merger transaction prior to calendar year-end 2017.

 

Issuance of Series D Convertible Preferred Stock

 

On November 14, 2016, the Company issued 187,500 shares of Series D Convertible Preferred Stock (the “Series D Shares”) and a warrant to purchase 187,500 shares of common stock in a private placement to certain accredited investors for gross proceeds of $150,000 pursuant to a Series D Preferred Stock and Warrant Purchase Agreement dated November 10, 2016.

 

On December 19, 2016, the Company issued 187,500 shares of Series D Shares and a warrant to purchase 187,500 shares of common stock in a private placement to an accredited investor for gross proceeds of $150,000 pursuant to a Series D Preferred Stock and Warrant Purchase Agreement dated December 14, 2016.

 

The initial conversion price of the Series D Shares is $0.80 per share, subject to certain adjustments. The initial exercise price of the warrant is $1.00 per share, also subject to certain adjustments.

 

As part of the Purchase Agreement, the Company has agreed to register the shares of common stock sold in the private placement and the shares of common stock issuable upon exercise of the warrant for resale or other disposition.

 

The Series D Shares and warrant were issued in a transaction that was not registered under the Securities Act of 1933, as Amended (the “Act”) in reliance upon applicable exemptions from registration under Section 4(2) of the Act and Rule 506(b) of SEC Regulation D under the Act.

 

The Company intends to issue up to 3,125,000 Series D Shares (and an equal number of warrants) for gross proceeds of $2,500,000 pursuant on a “best efforts” basis.

 

Conversion of Promissory Notes

 

On November 30, 2016, holders of $695,000 of our Convertible Promissory Notes converted the principal and outstanding interest into 936,347 shares of common stock at a conversion rate of $0.80 per share and warrants to purchase 936,347 shares of common stock at a price of $1.00 per share.

 

Extension of Secured Credit Facility

 

On December 9, 2008, TransTech entered a $1,000,000 secured credit facility with Capital Source to fund its operations. On December 12, 2016, the secured credit facility was renewed for an additional six months, with a floor for prime interest of 4.5% (currently 4.5%) plus 2.5%. The eligible borrowing is based on 80% of eligible trade accounts receivable, not to exceed $1,000,000. The secured credit facility is collateralized by the assets of TransTech, with a guarantee by Visualant, including a security interest in all assets of Visualant. Availability under this Secured Credit ranges from $0 to $175,000 ($33,000 as of September 30, 2016,) on a daily basis. The remaining balance on the accounts receivable line of $370,404 as of September 30, 2016, must be repaid by the time the secured credit facility expires on June 12, 2017, or we renew by automatic extension for the next successive six-month term.

 

Extension of Secured Credit Facility

 

The Company has a $199,935 Business Loan Agreement with Umpqua Bank (the “Umpqua Loan”). On December 22, 2016, the Umpqua Loan maturity was extended to December 31, 2017 and provides for interest at 3.25% per year. Related to this Umpqua Loan, the Company entered a demand promissory note for $200,000 on January 10, 2014 with an entity affiliated with Ronald P. Erickson, our Chief Executive Officer. This demand promissory note will be effective in case of a default by the Company under the Umpqua Loan.

 

Extension of Related Party Notes

 

On January 9, 2017, the Company entered into amendments to two demand promissory notes, totaling $600,000, and a note payable for $200,000 related to the Umpqua Bank Business Loan Agreement with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. The amendments extend the due date from December 31, 2016 to March 31, 2017 and continue to provide for interest of 3% per annum and a second lien on company assets if not repaid by March 31, 2017 or converted into convertible debentures or equity on terms acceptable to the Holder.

 

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Entry into a Material Definitive - Nov. 3, 2017

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