Quarterly report pursuant to Section 13 or 15(d)

RELATED PARTY TRANSACTIONS

v3.6.0.2
RELATED PARTY TRANSACTIONS
3 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

4. RELATED PARTY TRANSACTIONS

   

Notes: Conversion of Notes

 

Between September 22, 2014, and August 16, 2016, the Company raised an aggregate principal amount of $6.0 million in Notes, which along with of $317,000 of interest thereon, were converted on September 21, 2016 into 1,263,406 shares of Common Stock at $5.00 per share. Of the $6.0 million of Notes sold by the Company, $5.3 million were purchased by directors, an officer and greater than 5% shareholders of the Company and converted into shares as follows.

 

   

Principal Investment

in Convertible Notes

 

Interest Earned

At conversion

 

Shares Issued

on conversion

RSJ PE (1) $ 2,100,000   122,200   444,454
John Pappajohn (2) 1,600,000   52,500   290,498
Tierney Family Trust (3) 640,000   46,600   137,328
Follman Family Trust (4) 550,000   20,400   114,074
Robin Smith MD (5) 100,000   3,900   20,776
Geoffrey Harris (6) 10,000   300   2,058
George Carpenter (7) 100,000   1,300   20,254
Oman Ventures (8) 200,000   20,400   44,089
    $ 5,300,000   267,600   1,073,531

 

  (1) RSJ PE is a greater than 5% shareholder. Michal Votruba, a Director for Life Sciences for the RSJ/Gradus Fund, joined our Board on July 30, 2015.
  (2) John Pappajohn is a member of the Board. He purchased $1,600,000 of Notes of which $200,000 were assigned to four accredited investors on September 6, 2015. Approximately $10,400 of the total interest was attributable to such transferred Notes, resulting in an aggregate of 42,084 shares being issued upon the conversion of such transferred Notes.
  (3) Thomas Tierney is a trustee of the Tierney Family Trust. Mr. Tierney originally joined the Board on February 25, 2013 and served as Chairman of the Board from March 26, 2013 through his resignation on May 22, 2015. On September 29, 2016 Mr. Tierney rejoined the Board. The Tierney Family Trust is a greater than 5% shareholder of the Company.
  (4) Robert Follman is a trustee of the Follman Family Trust and is a member of the Board.
  (5) Dr. Robin Smith is the Chairman of the Board.
  (6) Geoffrey Harris is a member of the Board and Chairman of the Audit Committee.
  (7) George Carpenter is the CEO of the Company.
  (8) Mark & Jill Oman are the beneficial owners of Oman Ventures and were greater than 5% shareholders of the Company.

  

Cancellation of Warrants

 

In connection with the issuance of Notes, the Company also issued Warrants to the purchasers of the Notes, including the affiliates referenced above under "—Notes; Conversion of Notes". Upon conversion of the Notes on September 21, 2016, the Company also cancelled all Warrants issued in connection with such Notes. See Note 3, Stockholders Equity—Common and Preferred Stock— Conversion of Notes and Cancellation of Warrants", for additional detail.

 

Director and Officer Indemnification Agreement

 

On December 7, 2015, the Company entered into indemnification agreements with each of its Directors and Executive Officers. The agreements provide for, among other things: the indemnification of these Directors and Officers by the Company to the fullest extent permitted by the laws of the State of Delaware; the advancement to such persons by the Company of certain expenses; related procedures and presumptions of entitlement; and other related matters.

 

Transactions with John Pappajohn, Director

 

On May 13, 2016, and June 27, 2016, Mr. Pappajohn gifted in aggregate 32,692 of his shares of Common Stock to 12 outside parties including family and friends. The transfer of these shares was completed on September 16, 2016.

 

On November 30, 2016 and December 29, 2016, the Company sold and issued in aggregate 48,000 shares of its Common Stock, at a per share price of $6.25, in private placements to Mr. Pappajohn, who purchased common stock for $200,000 and $100,000 respectively resulting in gross cash proceeds to the Company of $300,000.

  

Transactions with George Carpenter, President and Chief Executive Officer

 

On September 25, 2013, the Board approved a consulting agreement effective May 1, 2013, for marketing services provided by Decision Calculus Associates, an entity operated by Mr. Carpenter’s spouse, Jill Carpenter. Effective August 2015, DCA was engaged at a fee of $10,000 per month. From August 2015 through December 31, 2016, DCA has been paid $155,000 with a further $15,000 balance due in accounts payable. The Decision Calculus Associates contract was not renewed for 2017.

 

Transactions with Tierney Family Trust, Greater than 5% Stockholder

 

Mr. Tierney rejoined the Board as a Director on September 29, 2016. Mr. Tierney is a trustee of the Thomas T. and Elizabeth C. Tierney Family Trust (the "Tierney Family Trust"), which is a greater than 5% stockholder.

 

On November 30, 2016, the Company sold and issued 32,000 shares of its Common Stock, at a per share price of $6.25, in a private placement to the Tierney Family Trust, resulting in gross cash proceeds to the Company of $200,000.

 

Transactions with Robin Smith MD, Chairman of the Board

On November 30, 2016, the Company sold and issued a 16,000 shares of its Common Stock, at a per share price of $6.25, in a private placement to Dr. Smith resulting in gross cash proceeds to the Company of $100,000.