NOTE 16 - SUBSEQUENT EVENTS

The significant events that have occurred from November 1, 2010 through to and including the date of this report are set out below:

The Cash Control Framework Agreement referred to in Note 2, 12 and 13 of the Consolidated Financial Statement and elsewhere in this annual report was terminated on or around March 2011. As a consequence we no longer hold any Restricted cash and to this extent Note 4 is nil as of the date of this report for Restricted Cash.

Short Term Investment referred to in Note 4 of the Consolidated Financial Statement was written down to nil in fiscal year 2014.

The business operations of Dragon Design Limited referred to in Note 7 and 14 of the Consolidated Financial Statement and elsewhere in the annual report were transferred to Coda Octopus Martech Limited in the fiscal year 2011 and this trading entity was dissolved in the said fiscal year.

The business operations of Tactical Intelligence LLC referred to in Note 7 and 14 of the Consolidated Financial Statement and elsewhere in the annual report ceased in the fiscal year 2011 and the trading name Tactical Intelligence LLC was transferred to the original seller on or around the said fiscal year.

The business operations of Innalogic referred to in Note 14 of the Consolidated Financial Statement and elsewhere in this annual report ceased operations in the fiscal year of 2011.

The Series A Preferred Stock referred to in Note 8 of the Consolidated Financial Statement and elsewhere in the annual report were, on exchanged for Series C pursuant to the terms of an Exchange Agreement entered into between the Company and the Holder of the Series A on or around June 30, 2015. Under the terms of the Exchange Agreement it was agreed to exchange 6,087 units of Series A Preferred Stock issued and outstanding (and which under the Certificate of Designation provided for dividends and voting rights) for 1,100 units of Series C Preferred Stock, a newly created class of Series C. These shares of Series C Preferred Stock each have a nominal value of $0.001 and a stated value of $1,000. The Certificate of Designation for the Series C Preferred Stock does not provide for dividends or voting rights. The 6,087 units of Series A Preferred Stock were surrendered and cancelled by the Company. The Series A Preferred Stock was eliminated as a class on or around January 5, 2016.

On December 15, 2015 the Company repurchased the remaining issued and outstanding 200 shares of Series A Preferred Stock and these have been surrendered and retired. The Series A Preferred Stock was subsequently eliminated.

Series B Preferred Stock referred to in Note 8 of the Consolidated Financial Statement and elsewhere in the annual report was also eliminated as a class in August 2016.

All Warrants and Stock Options referred to in Note 9 of the Consolidated Financial Statement or elsewhere in this annual report have either been exchanged for Common Stock or expired by their terms. At the date hereof the Company has no warrants or options outstanding as a consequence for Warrant Liability in Note 4 of Consolidated Financial Statement and elsewhere in the annual report this should be read as nil at the date of this report. .

All litigation referred to in Note 12 of the Consolidated Financial Statement or elsewhere in the annual report has been settled in full and all court actions dismissed by consent.

The CVA mentioned in Note 12 of the Consolidated Financial Statement and elsewhere in this annual report was discharged in full on March 26, 2014

With the exception of the amounts due in respect of the senior convertible debentures referred to in Note 13 of the Consolidated Financial Statement and elsewhere in this annual report, the amounts referred to in Note 13 under Loans Payable ($451,302 and $160,350) have been repaid in full.

The secured convertible debentures referred to in Note 13 (Notes and Loans Payable) and elsewhere in this annual report (are freely transferrable by their terms) are currently held by CCM Holdings, LLC, a company organized under the laws of New Jersey. CCM Holdings is the registered holder of 22.5% of the Company’s issued and outstanding shares of common stock.

Pursuant to an agreement between the Company and debenture holder, the debentures were restructured as follows:

As of October 31, 2015, the principal balance plus accrued interest and accrued conversion premium under the Notes was $14,940,258.

As a result of the restructuring, as of April 30, 2016, the total balance outstanding under the Notes had been reduced to $11,180,706. This amount includes both principal and interest.

As of the date of this annual report the Company is current with its obligations under the senior convertible debentures and no event of default exists.

Share Issuances

During the period ending January 31, 2011, we issued 16,826,715 shares of common stock valued at $279,963 (“Issuance”). Of this issuance, 750,000 shares of common stock were issued to a consultant for services rendered and the remainder was issued to a number of investors who had purchased certain securities pursuant to the terms of a series of Securities Purchase Agreement entered into between April and May 2007 in exchange for (i) surrender of their existing warrants and (ii) termination of the rights and obligations under the Securities Purchase Agreement.

On or around November 2010, we cancelled 3,428,571 shares of the Company’s common stock which were issued erroneously in the period ending October 31, 2010. 

In the fiscal year 2011 we retired 207 shares of common stock. These were repurchased by the Company.

On January 25, 2011, the Company issued a total of 26,765 shares of common stock to three members of staff.

On May 4, 2011, the Company issued 300,000 shares of common stock to an advisor for services rendered.

On February 21, 2012, the Company issued 100,000 shares of common stock to one of its directors as compensation for director services performed.

On July 26, 2012, the Company issued 15,315,316 shares of common stock to Solidor Investments Limited (the, then debenture holder (now transferred to CCM Holdings LLC) in consideration for the restructuring of the obligations under the Senior Debentures (postponing coupon and forgiving default interest obligations) and in exchange for the settlement of outstanding interest on the Debentures of $1,020,000.

On March 5, 2013, the Company issued 4,021,380 shares of common stock to CCM LLC in full and final satisfaction of an amount of $571,036 (which formed part of a series of small loans which CCM had made available as working capital to the business in March 2011) and in consideration for postponing a portion of the interest payments due.

On July 24, 2014 the Company issued 142,857 shares of common stock to Core Fund LLP in return for the surrender of warrants to purchase shares of common stock of the Company. These warrants were issued to Core Fund in a financing transaction completed in May 2007. The warrants should have been exchanged for shares in October 2010 as part of the Company’s restructuring efforts. As a result of administrative oversight, these shares were not issued until July 2014.

On October 26, 2015 the Company issued 100,000 shares of common stock to one of its directors, Robert Ethrington, in accordance with the terms of his election which provided for these shares of common stock to be issued subject to serving at least one year on the Company’s board.

On March 1, 2016, the Company issued 32,346,682 shares of its common stock to CCM Holdings, LLC in extinguishment of $3,558,136 (the redemption premium which accrued under the senior secured debentures).