Sonic Foundry, Inc. (NASDAQ:SOFO) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement
On January 19, 2018, following the approval of the Board of Directors, with Mr. Burish abstaining, the Company and Mark Burish entered into a Subscription Agreement (the “Subscription Agreement”) to which (i) Mr. Burish purchased a 10.75% Convertible Secured Subordinated Promissory Note for $500,000 in cash; and (ii) Mr. Burish agreed to purchase an additional Note for $500,000 in cash, if requested by the Company at any time prior to Sonic Foundry’s 2018 Annual Meeting of Stockholders (each, a “Note”, and collectively, the “Notes”).
No later than the third business day following the approval by the stockholders of the Company of the conversion of the Notes sufficient to comply with rules and regulations of Nasdaq and the Securities and Exchange Commission, the Notes will be automatically convertible into that number of shares of Series A Preferred Stock determined by dividing the total principal and accrued interest due on each Note by $542.13 (the “Conversion Rate”). Principal and accrued and unpaid interest on each Note, if not converted, will be due and payable on September 30, 2019. Interest will accrue at the rate of 10.75% per annum. The Notes are secured by all assets of the Company, and are subordinated to all senior indebtedness.
Prior to obtaining stockholder approval of the conversion, the Company will not issue any shares of Series A Preferred Stock to Mr. Burish upon conversion of the Notes. The Company has agreed to submit a proposal to allow Mr. Burish to convert the Notes into Series A Preferred Stock, and the Series A Preferred Stock into common stock, for approval by its stockholders at its 2018 Annual Meeting.
The foregoing description of the Subscription Agreement and the Notes do not purport to be complete and is subject to, and qualified in its entirety by the full text of the Subscription Agreement and the Form of Notes which are incorporated into this Item 1.01 by reference to Exhibits 10.1 and 10.2 to this report.
Item 1.01 Changes in Control of Registrant
Assuming the purchase of both Notes, the conversion of both Notes into Series A Preferred Stock at the 2018 Annual Meeting of Stockholders, the conversion of all of Mr. Burish’s Series A Preferred Stock into Common Stock, including dividends for one year, current common stock owned and the exercise of all outstanding common stock and warrants, Mr. Burish would have a 25.7% beneficial ownership interest in the Company, and therefore, a “change of control” could be deemed to have occurred
Item 1.01 Amendments to Bylaws
On January 19, 2018, the Company amended Section 2 of Article II of its amended and restated bylaws to provide that the annual meeting of stockholders can be held in any month, which amended the previous bylaw provision requiring the Company to hold its annual meeting of stockholders in March. The foregoing description of the amendment to the Company’s amended and restated bylaws does not purport to be complete and is subject to, and qualified in its entirety by the full text of the Amended and Restated Bylaws, which are incorporated into this Item 1.01 by reference to Exhibit 3.1 to this report.
Item 1.01 Financial Statements and Exhibits
(a) Exhibits
3.1 Amended and Restated Bylaws, as of January 19, 2018.
10.1Subscription Agreement between the Company and Mark Burish, dated January 19, 2018.
10.2Form of 10.75% Convertible Secured Subordinated Promissory Note.
EXHIBIT LIST
SONIC FOUNDRY INC ExhibitEX-3.1 2 amendedandrestatedbylaws.htm EXHIBIT 3.1 Document Exhibit 3.1SONIC FOUNDRY,…To view the full exhibit click here
About Sonic Foundry, Inc. (NASDAQ:SOFO)
Sonic Foundry, Inc. is engaged in the business of providing enterprise solutions and services for the Web communications market. The Company operates in geographic regions, including the United States, Europe and Middle East, and Asia. The Company is engaged in offering video capture, management and Webcasting solutions in sectors, such as education, business and government. The Company’s Mediasite Video Platform transforms communications, training, education and events for its customers. The Company sells Mediasite recorders and server software products and related services contracts, such as customer support, installation, customization services, training, content hosting and event services. The Mediasite video platform delivers live and on-demand video on screen. The Mediasite Video Cloud provides an option for video streaming, storage and management for organizations. The Mediasite ML Recorders are designed for on-the-go Webcasting, hybrid events, guest speakers and conferences.