Form 8-K for MMR INFORMATION SYSTEMS, INC.
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18-Jun-2010
Entry into a Material Definitive Agreement, Non-Reliance on Previou
Item 1.01 Entry into a Material Definitive Agreement.
Investment Agreement Addendum
On June 18, 2010, MMRGlobal, Inc. (the "Company") f/k/a MMR Information Systems, Inc. and Dutchess Opportunity Fund II, LP f/k/a Dutchess Equity Fund, LP (the "Investor) entered into an Addendum (the "Addendum") to the Investment Agreement (the "Investment Agreement") and the Registration Rights Agreement (the "Registration Rights Agreement" previously entered into by the Company and Investor on September 15, 2009. The Addendum, among other things, (i) provides that the Investor shall commit to purchase up to $10,000,000 of the Company's common stock, (ii) amends the definition of purchase price to ninety-four percent (94%) of the average of two lowest daily volume weighted average price during the pricing period, and (iii) removes any reference to the previous "Minimum Acceptable Price" or "Best Bid".
Pursuant to the Investment Agreement, as amended by the Addendum, the Company may draw on an equity line facility (the "Equity Line") from time to time, as and when it determines appropriate in accordance with the terms and conditions of the Investment Agreement. A maximum of 100 million shares may be issued under the Equity Line, at per share prices set at ninety-four percent (94%) of the average of two lowest daily volume weighted average price ("VWAP") of the Company's common stock during the five consecutive trading day period beginning on the trading day immediately following the date of delivery of the applicable put notice (such five-day period, the "Pricing Period").
The maximum amount that the Company is entitled to put in any one notice ("Put") remains the greater of (i) 200% of the average daily volume (U.S. market only) of the common stock for the three (3) trading days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such trading days or (ii) $150,000. There are put restrictions applied on days between the put notice date and the closing date with respect to that particular Put. During such time, the Company shall not be entitled to deliver another put notice.
The Investor will not be obligated to purchase shares if the Investor's total number of shares beneficially held would exceed 4.99% of the number of shares of the Company's common stock as determined in accordance with Rule 13d-1 of the Securities Exchange Act of 1934, as amended. In addition, the Company is not permitted to draw on the facility unless there is an effective registration statement (as further explained below) to cover the resale of the shares.
The Investment Agreement further provides that each of the Investor and the Company is entitled to customary indemnification from the other for any losses or liabilities it suffers as a result of any breach by the other under any provisions of the Investment Agreement or Registration Rights Agreement, or as a result of any lawsuit brought by a third-party arising out of or resulting from the other party's execution, delivery, performance or enforcement of the Investment Agreement or the Registration Rights Agreement.
The Investment Agreement also contains representations and warranties of each of the Company and the Investor. The assertions embodied in those representations and warranties were made for purposes of the Investment Agreement and are subject to qualifications and limitations agreed to by the respective parties in connection with negotiating the terms of the Investment Agreement. In addition, certain representations and warranties, which were made as of a specific date, may be subject to a contractual standard of materiality different from what a stockholder or investor might view as material, or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts. Investors should read the Investment Agreement together with the
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other information concerning the Company that the Company publicly files in reports and statements with the Securities and Exchange Commission (the "SEC").
Pursuant to the terms of the Registration Rights Agreement, as amended by the Addendum, the Company is obligated to file one or more registration statements with the SEC to register the resale by the Investor of shares of common stock issued or issuable under the Investment Agreement and is further obligated to use all commercially reasonable efforts to have the initial registration . . .
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
(a) In August 29, 2009, the Company filed a 10-Q/A and an explanatory news release, but did not file a Current Report on Form 8-K at the same time. Accordingly, this Current Report on Form 8-K relates solely to that first quarter 2009 filing. It does not amend any filing and does not restate any filing. The Financial statements currently on file on Form 10Q/A for the first quarter ended March 31, 2009 are still reliable. The purposes of this filing is because the Company has been informed by the Securities and Exchange Commission (the "Commission") that it should have also filed an 8-K on August 29, 2009, and the Company is making this filing solely to fulfill the Commission's request
Background.
On August 27, 2009, management and the Audit Committee of the Board of Directors (the "Audit Committee") of MMRGlobal, Inc. (the "Company") determined that the financial statements as of and for the three months ended March 31, 2009 previously filed by the Company with the Securities and Exchange Commission (the "Commission") on its Quarterly Report on Form 10-Q contained an error in the Company's previously issued financial statements. On the same date as its discovery of the error, the Audit Committee decided to file, and actually did file, an amended Quarterly Report on Form 10-Q/A reflecting a correction of that error. No new or additional non-reliance or restatement in previously issued financials is being reported herein.
The circumstances surrounding the error initially arose upon the merger between the Company and Favrille, Inc. on January 27, 2009. The Audit Committee determined that at the time of the Company's merger with and into Favrille, Inc. (the "Merger"), and as a result of the Merger, the Company had inadvertently exceeded the number of shares it was authorized to issue. On August 27, 2009, the date of the filing of the Company's Form 10-Q/A, the Audit Committee determined that such error should result in a restatement of the Company's financials for the quarter ended March 31, 2009.
Although the Audit Committee determined to restate its financials, the Audit Committee did not at any time believe that it was required to do so. The Audit Committee discussed with the Company's independent auditors the circumstances surrounding the error disclosed herein and determined that there were several options available to the Company other than restatement to remedy the error. One option available to the Company would have been for the Company to engage the services of additional accounting consultants with the particular experience to deal with such issues as involved in the merger. Another option available to the Company would have been for the Company to solicit the advice of the Commission in soliciting a comment. The Company's independent auditors did not require the Company to restate its financial statements given the existence of these alternatives. However, the Audit Committee determined at that time that restating the Company's financial statements, although not mandatory, would be the easiest solution for stockholders, investors and the public to understand. Other solutions may have required a longer time to implement resulting in more confusion and compounding the error in subsequent quarterly reports. Given the Company's impending deadline for the filing of the Company's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2009, the Company wanted to have consistent financial statements without confusing explanations. Thus, immediately restating the financial statements for the prior quarter made more sense from an implementation perspective and the desire to not have to revist the issue in subsequent quarters.
Item 5.02 Appointment of Certain Officers.
The information required under Item 5.02 is incorporated by reference from the information provided in Item 1.01 in this Current Report on Form 8-K.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On June 15, 2010, the stockholders of the Company approved an amendment to the Company's Amended and Restated Certificate of Incorporation (the "Charter Amendment") to change the Company's name from MMR Information Systems, Inc. to MMRGlobal, Inc. The Company submitted the Charter Amendment to the Delaware Secretary of State's office on June 16, 2010, and the Charter Amendment became effective on the same day.
The Company's common stock will continue to trade on the OTCBB. The Company has requested a new trading symbol for its common stock, but such symbol has not been approved as of the date of this Current Report. Until the Company receives such new trading symbol, if any, the Company common stock will continue to trade under the symbol "MMRF." In connection with the Company's name change, the Company has requested that its common stock be assigned a new CUSIP number.
A copy of the Charter Amendment (as filed with the Delaware Secretary of State) is attached as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
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Item 5.07 Submission of Matters to a Vote of Security Holders.
On June 15, 2010, the Company held its 2010 annual meeting of stockholders (the "Annual Meeting"). The Company solicited proxies for the Annual Meeting pursuant to Regulation 14A under the Securities Exchange Act of 1934. As of the April 19, 2010 record date for the annual meeting, there were 204,260,891 shares of the Company's common stock eligible to vote. At the Annual Meeting of stockholders, the holders of 112,061,982 shares of the Company's common stock were represented in person or by proxy, which constituted a quorum.
Proposal 1: The Company's Class I nominees for election to the Board of Directors as listed in the Company's proxy statement were each elected to a three-year term, with the results of the voting as follows:
Broker Nominee Votes For Votes Withheld Non-Votes Douglas H. Helm 85,563,502 385,592 26,112,888 Jack Zwissig 85,556,702 392,392 26,112,888
Proposal 2: The Company also requested shareholder ratification of the selection of Rose Snyder & Jacobs ("RSJ") as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2010. As indicated below, the proposal to ratify the appointment of RSJ was approved:
Broker
Description Votes For Votes Against Abstentions Non-Votes
Ratification of the appointment
of RSJ 111,988,745 26,839 46,398 0
Proposal 3: Approval of amendment to the Company's 2001 Equity Incentive Plan
(the "Plan") to increase the authorized shares by 15,000,000 shares and to fix
the number of authorized shares at 27,000,000 shares:
Votes Broker
Description Votes For Against Abstentions Non-Votes
Approval of Amendment to Company's 2001
Equity Incentive Plan 85,237,253 545,211 166,630 26,112,888
Proposal 4: The Company also requested shareholder approval to amend Article I
of the Company's Amended and Restated Certificate of Incorporation to change its
name from MMR Information Systems, Inc. to MMRGlobal, Inc.
Votes Broker
Description Votes For Against Abstentions Non-Votes
Approval of Amendment to Article I of
the Company's Amended and Restated
Certificate of Incorporation to change
the Company name to MMRGlobal, Inc. 111,986,572 47,111 28,299 0
As indicated in the above tables, the proposals to elect two (2) director nominees, ratify the appointment of RSJ, approve the amendment to the Plan and approve the amendment to Article I of the Company's Amended and Restated Certificate of Incorporation were approved.
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Item 7.01 Regulation FD Disclosure.
On June 15, 2010, Mr. Lorsch, the Company's Chairman, President, and Chief Executive Officer, answered questions provided by stockholders attending the Annual Meeting. A copy of the press release disclosing the questions and answers is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Description
3.1 Amendment to the Amended and Restated Certificate of
Incorporation.
10.1 Addendum, dated June 17, 2010, to the Investment Agreement
and the Registration Agreement, both dated September 15,
2009, by and between MMR Information Systems, Inc. and
Dutchess Opportunity Fund II, LP f/k/a Dutchess Equity
Fund, LP.
10.2 Employment Agreement, dated June 15, 2010, by and between
the Company and Richard Teich.
10.3 Employment Agreement, dated June 15, 2010, by and between
the Company and Rafael Salazar.
10.4 Memorandum of Understanding, dated as of June 15, 2010, by
and between the Company and Ingrid Safranek.
99.1 Press release issued on June 16, 2010.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MMRGLOBAL, INC.
June 18, 2010 By: /s/ Robert H. Lorsch Robert H. Lorsch
Chief Executive Officer
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