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12. SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2015
Subsequent Events [Abstract]  
12. SUBSEQUENT EVENTS

Subsequent to September 30, 2015, pursuant to a private placement, the Company issued to two shareholders a total of 900,000 shares of common stock for cash with a per share price of $0.15 per share or $135,000.

 

On October 30, 2015, the Company entered into a Loan and Security Agreement (the “LSA”) with Silicon Valley Bank (the “Bank”), pursuant to which the Bank agreed to provide the Company with a revolving line of credit in the aggregate principal amount of $1,000,000, bearing interest at a floating per annum rate equal to the greater of three quarters of one percentage point (0.75%) above the Prime Rate (as that term is defined in the LSA) or four percent (4.00%). The line of credit is secured by a second priority perfected security interest in all of the assets of the Company in favor of the Bank. Under the terms of the LSA, the Bank received a non-refundable commitment fee of twenty five hundred dollars ($2,500) and reimbursement of all Bank expenses for documentation up to ten thousand dollars ($10,000). As a condition to the extension of credit to the Company under the LSA, Keshif Ventures, LLC (“Keshif”), a related party based on ownership interest in the Company, agreed to guarantee all of the Borrower’s obligations under the LSA pursuant to a Master Unconditional Limited Guaranty between Bank and Keshif, dated October 30, 2015 (“Guaranty”). Keshif pledged cash equivalent collateral to the Bank as security for the Guaranty. Keshif also agreed to subordinate to the Bank all of Borrower’s indebtedness and other monetary obligations owing to Keshif pursuant to a Subordination Agreement, dated October 30, 2015 (“Subordination Agreement”). In consideration for the Guaranty, Envision agreed to issue 571,429 shares of its common stock, with a per share fair value of $0.16, or $91,429 (based on the market price at the time of the agreement) to Keshif pursuant to a stock purchase agreement, dated October 30, 2015 (“SPA”). These shares will be recorded as loan origination costs and will be presented as a direct deduction from the related debt liability. Pursuant to the terms of the SPA, for each six-month period from and after the six-month anniversary of October 30, 2015 (each, a “Measurement Period”) that Keshif guarantees the Company’s obligations under the LSA, Keshif will also receive the number of additional shares of the Company’s common stock, rounded upward to the nearest whole number, equal to (a) two and one half percent (2.5%) multiplied by the maximum outstanding principal amount of the LSA at any time during such Measurement Period, such amount to be divided by (b) the twenty (20) day average closing price of the Company’s common stock, measured for the twenty (20) consecutive trading days immediately prior to such Measurement Period, the quotient of which shall be multiplied by (c) a fraction, the numerator of which is the number of calendar days during the Measurement Period which the Guaranty remained in effect and the denominator of which is the number of calendar days in such Measurement Period. The Company also issued a side letter to Keshif (the “Side Letter”), which in addition to confirming Keshif’s entitlement to the Shares, provided certain contractual rights to Keshif in consideration for the Guaranty, including a covenant by the Company to provide financial statements and other periodic reports to Keshif, an agreement to reimburse Keshif for payments made by Keshif to the Bank in accordance with the Guaranty (“Reimbursement Obligation”), and the grant of a security interest, subordinated to the Bank under the Subordination Agreement, to secure the Reimbursement Obligation. Keshif also has the right under the Side Letter to invite one representative to attend all meetings of Envision’s Board of Directors and, in the event Envision is unable to meet its obligations under the LSA, Keshif will immediately become entitled to elect one member to Envision’s Board of Directors.