|6 Months Ended|
Sep. 30, 2020
|Subsequent Events [Abstract]|
On October 9, 2020, Viking and Camber entered into the First Amendment to Amended and Restated Agreement and Plan of Merger (the “First Amendment”) to amend the Merger Agreement to (a) fix the percentage of the post-Merger capitalization of the combined company which would be held by stockholders of Camber (on a fully-diluted basis, but without taking into account the shares of common stock of Camber issuable upon conversion of Camber’s outstanding Series C Preferred Stock)(the “Camber Percentage”) at 20% (previously such Camber Percentage was adjustable between 15% to 25%, depending on the amount of cash and/or other unencumbered assets Camber and Viking had at the time of the closing of the Merger which was available to the combined company); (b) extend the date that the Merger Agreement could be terminated by either party until December 31, 2020, provided that the right to terminate the Merger Agreement thereafter is not available to a party if the failure of the closing of the Merger to occur by such date is principally due to the failure of such party to perform or observe the obligations, covenants and agreements of such party set forth in the Merger Agreement; and (c) remove the requirement that Viking obtain the consent of its lender, ABC Funding, LLC, for the Merger.
On December 11, 2020, the Company entered into an Exchange Agreement (the “Exchange Agreement”) with Discover (the “Investor”), the sole shareholder of the Company’s Series C Preferred Stock. The transactions contemplated by the Exchange Agreement closed on December 11, 2020. Pursuant to the Exchange Agreement, as an accommodation to the Company, and in order to reduce the potential dilutive impact of the Series C Preferred Stock, by reducing the number of outstanding shares of Series C Preferred Stock, the Investor exchanged 600 shares of Series C Preferred Stock (the “Exchanged Shares”), which had an aggregate face value of $6,000,000 (600 shares each with a face value of $10,000 per share), for a $6,000,000 secured Promissory Note (the “Investor Note”). The Company is in the process of obtaining the Exchanged Shares from the Investor and plans to cancel such shares once transferred. The 600 Exchanged Shares were outstanding as of September 30, 2020, and included in temporary equity on the balance sheet.
Pursuant to the Exchange Agreement (a) the Investor waived all prior breaches and defaults that occurred prior to the date of the Exchange Agreement or that may continue or occur for 90 days thereafter, under any agreements entered into with the Investor relating to the acquisition of shares of Series C Preferred Stock (the “90 Day Period”), and waived all rights and remedies with respect to any such breaches and defaults; (b) we agreed to timely file all reports required by the Securities and Exchange Commission (the “SEC”) for so long as the Investor holds any Series C Preferred Stock (provided the Company was provided until December 31, 2020, to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020); (c) we agreed to indemnify and hold the Investor, its affiliates, managers and advisors, and their related parties, harmless from any losses related to any breach of the Exchange Agreement (or other transaction documents), and from any action by the Company or a creditor or stockholder of the Company, challenging the transactions contemplated by the Exchange Agreement and related agreements, except to the extent finally adjudicated to be caused solely by such indemnified party’s unexcused material breach of an express provision of the Exchange Agreement or related agreements; (d) we agreed to reserve from our outstanding common stock, shares of common stock to allow for the conversion of the outstanding Series C Preferred Stock (subject to the 90 Day Period); (e) the Investor agreed to vote all shares of common stock which it holds as of the record date for any shareholder meeting in favor of the Company’s previously announced pending plan of merger with Viking (the “Merger”), and the other proposals that are recommended for approval by the Board of Directors of the Company in the proxy statement filed in connection with such Merger; (f) the Investor agreed to the Merger and agreed to waive any rights it may have (including favored nations, anti-dilution and/or reset rights) in connection therewith; (g) we acknowledged that the Investor had previously provided notice to the Company of its intent to increase the beneficial ownership limitation set forth in the designation of the Series C Preferred Stock to 9.99%, and that such limitation will continue to apply moving forward; and (h) we provided the Investor and its related parties a general release.
The Exchange Agreement also amended the June 22, 2020 Stock Purchase Agreement previously entered into with the Investor, pursuant to which the Investor purchased 630 shares of Series C Preferred Stock, to remove from such June 22, 2020 agreement (i) the prohibition on the Investor transferring and/or selling shares of Series C Preferred Stock; and (ii) the repurchase obligation, which required the Company to redeem for cash, at 110% of the face value thereof ($10,000 per share), all 630 shares of Series C Preferred Stock sold by the Company in June 2020, in the event the Merger did not close by the required date set forth in the plan of merger relating thereto (as amended from time to time), and all similar provisions in any prior agreements entered into between the Company and the Investor. As a result of such amendment, the remaining 30 shares of Series C Preferred Stock sold in June 2020, that were included in temporary equity as of September 30, 2020 and which were not part of the Exchanged Shares, became permanent equity.
The Investor Note (which has no conversion features) has a balance of $6,000,000 and accrues interest at the rate of 10% per annum, which increases to the highest non-usurious rate of interest allowed under applicable law upon the occurrence of an event of default, which interest is due on the maturity date, which maturity date is the earlier of (a) December 11, 2022 (which may be extended with the mutual consent of the parties and a written amendment to the Investor Note signed by the Investor); (b) March 11, 2021, in the event the Merger does not close or is not fully consummated by such date; and (c) the date a change of control of the Company occurs, which includes any person becoming the beneficial owner of more than 50% of the combined voting power of the Company (a “Change in Ownership”), or the approval of (1) a plan of complete liquidation, (2) an agreement for the sale or disposition of all or substantially all the Company’s assets, or (3) a merger (other than a merger for purposes of redomiciling the Company), consolidation, or reorganization of the Company, which would result in a Change in Ownership, provided that the closing of the Merger will not trigger a change of control (or Change in Ownership). The Investor Note includes customary events of default. Upon the occurrence of an event of default, the Investor has the right to accelerate the full amount of the Investor Note and all interest thereon, to enforce its rights under the Security Agreement, and take other actions allowed under applicable law.
Payment of the Investor Note and performance of the Company’s obligations thereunder is required to be guaranteed by all subsidiaries or entities controlled or owned by the Company, or which may be owned after the date of the Investor Note, provided that no guarantees have been entered into to date. The Investor Note may be assigned by the Investor subject to compliance with applicable securities laws. The Company may prepay the Investor Note at any time.
The payment of amounts due under the Investor Note is secured by the terms of a Security Agreement entered into by the Company in favor of the Investor, which provides the Investor a first priority security interest in substantially all of our assets (the “Security Agreement”). If an event of default occurs under the Investor Note, the Investor can enforce its rights under the Security Agreement and foreclose on our assets in order to satisfy amounts owed thereunder.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef