On March 5, 2016, by letter agreement dated December 31, 2015, Westergaard Holdings Ltd. (“Westergaard Holdings”), an affiliate of Keith Westergaard, a member of our board of directors, amended the Subscription / Debt Settlement Agreement dated September 26, 2014 between DSG Tag Systems, Inc. (“DSG TAG”) and Westergaard Holdings, as previously amended. Westergaard Holdings owns 4,229,384 shares (the “Series A Shares”) of Series A Convertible Preferred Stock of DSG TAG. Pursuant to the settlement agreement, DSG TAG has agreed that DSG Global Inc. will complete financings for gross proceeds of at least $10 million and use a portion of the proceeds to redeem all of the Series A Shares. The letter agreement modifies the redemption provisions, which now obligate us to raise capital and redeem the Series A Shares at a price of $1.25 per share as follows: (i) on or before May 1, 2016, the Company must complete a financing for gross proceeds of at least $2.5 million and use at least $1.125 million to redeem a minimum of 900,000 Series A Shares; (ii) on or before June 1, 2016, the Company must complete an additional financing for gross proceeds of at least $2.5 million and use at least $1.125 million to redeem a minimum of 900,000 additional Series A Shares; and (iii) on or before July 1, 2016, the Company must complete an additional financing for gross proceeds of at least $5.0 million and use at least $3.04 million to redeem the remaining 2,429,384 Series A Shares.
The foregoing summary of the modification does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the letter filed as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits