As disclosed in the Company’s Current Report on Form 8-K/A filed on October 28, 2016, the Company did not make the first amortization payment of approximately $444,444.44, plus accrued interest of approximately $113,580 under the Debentures issued in connection with its private placement (the “Private Placement”) of $4,444,444.44 principal amount of Convertible Debentures (the “Debentures”) and Common Stock Purchase Warrants (the “Warrants”).

As previously disclosed, the Company has entered into waiver agreements with purchasers of the Debentures (“Purchasers”) holding approximately 87% of the principal amount of the Debentures with respect to the failure to make the first amortization payment. to the terms of the Waiver, the Purchasers have agreed to waive the payment of the amortization payments and accrued interest due for October 2016 and November 2016. In consideration for waiving the payment terms of the Debentures, the Company has agreed to pay, upon execution of the Waiver, 10% of the Amortization Amount that became due on October 12, 2016 and has agreed to pay on November 12, 2016 10% of the Amortization Amount due in November 2016. All other amounts will be due and payable in accordance with the terms of the Debentures, with the deferred payments due at maturity.

The Company did not receive a waiver from one of its debenture holders, holding approximately 13% of the principal amount of the Debentures with respect to the event of default arising out of the Company’s failure to make the first amortization payment when due. to the terms of the Debentures, such holder has sent a notice of acceleration, stating that the Company owes $695,679.56, reflecting the principal amount of the Debenture plus interest through November 1, 2016. Interest will accrue at 18% until this amount is satisfied. The Company is seeking to settle the matter with the holder; however, there can be no assurance that an agreement will be reached.

As previously disclosed, the Company has not maintained the Minimum Cash Reserve as required by the Purchase Agreement. to the terms of the Debentures, the failure to cure the failure to maintain the Minimum Cash Reserve within three trading days constitutes an Event of Default. Among other things: (1) at the Purchaser’s election, the outstanding principal amount of the Debentures, plus accrued but unpaid interest, plus all interest that would have been earned through the one year anniversary of the original issue date if such interest has not yet accrued, liquidated damages and other amounts owed through the date of acceleration, shall become, immediately due and payable in either cash or stock
About Function(x) Inc. (FNCX)