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Item 2.02 Results of Operations and Financial Condition
On July 29, 2016, the Company entered into an Agreement and Plan of Merger among the Company, ESI Vista Sub, Inc., Visicon Technologies, Inc. (“Visicon”) and the Stockholders’ Representative (the “Merger Agreement”) pursuant to which it agreed
to issue up to 784,559 shares of common stock to the stockholders of Visicon. These shares were not registered under the Securities Act of 1933 (the “Act”) and were issued pursuant to the exemption from registration provided by Rule 506(b) promulgated under the Act. For purposes of the Merger Agreement these shares were valued at $5,000,000. See Item 8.01 for an additional description of the transaction.
Item 8.01 Other Events
On July 29, 2016, the Company entered into an Agreement and Plan of Merger among the
Company, ESI Vista Sub, Inc., Visicon Technologies, Inc. (“Visicon”) and the Stockholders’ Representative (the “Merger Agreement”) pursuant to which the Company agreed to acquire Visicon for 784,559 shares of the Company common stock, valued at $5,000,000 for purposes of the Merger Agreement, and $3,000,000 in cash, subject to adjustment for indebtedness, transaction expenses, working capital and other items. The merger closed on August 1, 2016.
Due to the adjustments referenced above, including the payment of $1,500,000 to retire Visicon indebtedness, no cash remained to pay Visicon stockholders at closing and the aggregate number of shares of common stock to be issued was reduced to 745,159
shares. Of those shares, 141,220 shares were placed in escrow to serve as a source of payment for any purchase price adjustment or indemnity claims by the Company. The amount of cash paid by the Company at closing was approximately $2,100,000.
Visicon stockholders have contractually agreed to limitations on the sale of the shares of common stock they receive in the merger. No shares can be sold for six months following closing and then twenty five percent of the shares each stockholder receives can be sold in each of the following four three-month periods.
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.