What changed in this filing

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Item 9A. Controls and Procedures

2021-03-26 compared with 2020-03-30 · 23 added, 72 removed, 235 unchanged (29% of the section changed)

36 unchanged sentences

Chief Financial Officer and Director

Peter Dalrymple

Jerry Bratton

Jeffrey Cronk

Peter Dalrymple

Donovan, M.D.

49 unchanged sentences

of Engineers.

Cronk, D.C., J.D.

Cronk joined our Board of Directors in November 2015.

He served as our Chief Operating Officer from August 2017 until September 11, 2018.

Since 2010 he has been the CEO and owner of Biocybernetics Inc;

DBA American Spinal Injury and Impairment Consultants, which provides spinal injury and impairment educational programs for doctors, attorneys, case managers, insurers and allied healthcare providers, the purpose of which is to improve diagnostic accuracy, improve treatment results, improve documentation procedures and reduce costs.

From 2010 to present, he is the Director of Education for Spinal Kinetics LLC, a company that provides assessment services of spinal soft-tissue injuries.

Prior to this, he was the owner of National Injury Diagnostics from 2005 to 2010.

Cronk graduated from Palmer College of Chiropractic with a bachelor’s degree in General Sciences and a Doctorate Degree in Chiropractic in 1988.

That same year he became a Licensed Doctor of Chiropractic.

In 2013 he completed his law degree with a special emphasis on personal injury law.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own beneficially more than ten percent of our common stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission.

Based solely upon a review of Forms 3, 4 and 5 furnished to us during the fiscal year ended December 31, 2019, we believe that the directors, executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements during the fiscal year ended December 31, 2019.

Delinquent Section 16(a) Reports

Based solely upon a review of Forms 3, 4 and 5 and amendments thereto filed electronically with the SEC during the fiscal year ended December 31, 2020, we believe that the directors, executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements during the fiscal year ended December 31, 2020.

Code of Ethics

6 unchanged sentences

We maintain a separately-designated standing audit committee.

The Audit Committee currently consists of Peter Dalrymple, Jerry Bratton and Jeffrey A.

The Audit Committee currently consists of Peter Dalrymple and Jerry Bratton.

Although the Charter of the Audit Committee provides for a majority of the Audit Committee to be independent, presently only Mr.

Bratton is independent.

A majority of the Audit Committee was independent until August 2017 when Dr.

Cronk was appointed Chief Operating Officer.

He resigned as Chief Operating Officer in September 2018 but remains on the Board or Directors and the Audit Committee.

Cronk is no longer deemed an independent director because he was employed by us during the past three years.

We anticipate that Dr.

Cronk will remain on the Audit Committee until we appoint or elect an additional independent member of the Board who can join the Audit Committee.

If we are unable to appoint or elect an additional independent member of the Board, we will consider amending the Charter of the Audit Committee.

Bratton is the Chairman of the Audit Committee, and the board of directors has determined that he is an audit committee financial expert as defined in Item 5(d)(5) of Regulation S-K.

9 unchanged sentences

John Bergeron

Jeffery Cronk, D.C (1)

On September 11, 2018, Dr.

Cronk resigned as Chief Operating Officer for personal reasons but remains on our Board.

Employment Agreements

On September 16, 2017, our employment agreement with William F.

Donovan, M.D.

Since that time, he has worked for us on an at-will basis and during 2018 received an annual salary of $120,000.

Donovan’s pay was stopped in March 2019 resulting in compensation of $27,692 for the year ended December 31, 2019.

On November 30, 2014, our employment agreement with John Bergeron expired.

Since that time, he has worked for us on an at-will basis and presently receives an annual salary of $110,000.

We do not have any employment agreements with any of our executive officers as of December 31, 2020.

Outstanding Equity Awards at Fiscal Year End

There are no equity awards outstanding at December 31, 2019.

At December 31, 2020, there were 20,000 fully vested stock options outstanding, with a weighted average exercise price of $0.40 per share.

Compensation of Directors

19 unchanged sentences

Donovan, M.D.

Jeffrey Cronk, D.C.(1)

John Bergeron (1)

8 unchanged sentences

Includes 160,000 shares of common stock.

Includes 1,556,100 shares of common stock held by Mr.

25 unchanged sentences

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have an agreement with Northshore Orthopedics, Assoc.

(“NSO”), which is 100% owned by our Chief Executive Officer, William Donovan, M.D., to provide medical services as our independent contractor.

As of December 31, 2019 and 2018, we had balances payable to NSO of $0 and $4,967 respectively.

This outstanding payable is non-interest bearing, due on demand and does not follow any specific repayment schedule.

We do not directly pay Dr.

Donovan (in his individual capacity as a physician) any fees in connection with NSO.

Donovan is the sole owner of NSO, and we pay NSO under the terms of our agreement.

On August 29, 2012, we issued Peter Dalrymple, a member of our Board of Directors, a secured promissory note, which was amended in September 2014, August 2016, September 2017 and September 2018.

We paid off this note in September 2019.

We will continue to provide collateral to Mr.

Dalrymple in an amount of $3,000,000 in our gross accounts receivable to secure payment of his obligations in connection with the line of credit with Wells Fargo described below.

As of December 31, 2019 and 2018, the note had a principle balance of $0 and $90,000, respectively.

During 2019, we made a total of $90,000 in principal payments and a total of $3,032 in interest payments on this note.

On September 3, 2014, we entered into a $2,000,000 revolving line of credit agreement with Wells Fargo Bank, N.A.

Outstanding principal on the line of credit bears interest at the 30-day London Interbank Offered Rate (“LIBOR”) plus 2%, resulting in an effective rate of 3.97% at December 31, 2019.

In September 2017, the line of credit agreement was amended, whereby the outstanding principle was due and payable in full on August 31, 2018 and the maximum amount we can borrow under the line of credit is $1,750,000.

On September 7, 2018 we entered into an Amended and Restated Revolving Line of Credit Note to extend our revolving line of credit facility, whereby the outstanding principal was due and payable in full on August 31, 2019.

On September 30, 2019 the credit line was amended into a one-year term loan precluding any additional draws on the note, but all other terms of the loan remain the same.

The term loan also remains guaranteed by Peter L.

Dalrymple, a member of our Board of Directors, and is secured by a first lien interest in certain of his assets.

As of December 31, 2019 and 2018, outstanding borrowings under the line of credit totaled $1,070,000 and $1,565,000, respectively.

During the years ended December 31, 2019 and 2018 we made interest payments in the amount of $61,808 and $56,635, respectively, on this term loan.

As of March 30, 2020, the term loan has an outstanding balance of $865,000.

Outstanding principal on the line of credit bore interest at the thirty-day London Interbank Offered Rate (“LIBOR”) plus 2%.

The line of credit agreement was amended at various dates until a final amendment on September 30, 2019 converted the line of credit into a one-year term loan precluding any additional draws but retaining all other terms.

The line of credit and term loan were guaranteed by Peter L.

Dalrymple, a member of our board of directors, and was secured by a first lien interest in certain of his assets.

On the August 31, 2020 maturity date of the term loan with Wells Fargo Bank, N.A., Mr.

Dalrymple paid off in full the entire $610,000 remaining principal balance.

Upon Peter L.

Dalrymple paying off the principal balance of the Wells Fargo term loan on our behalf on August 31, 2020, we issued Mr.

Dalrymple a $610,000 one-year secured promissory note.

The secured promissory note bears interest of 6% per year with monthly payments of interest only due until maturity, when all unpaid interest and principal is due.

This note is collateralized by all our accounts receivable and a pledge of the stock of our wholly owned subsidiary, Quad Video Halo, Inc.

The secured promissory note balance was $490,000 at December 31, 2020.

During the year ended December 31, 2020, the Company recorded $11,058 in interest expense on the Dalrymple note, representing all interest due through that date.

Director Independence

27 unchanged sentences

Certificate of Amendment to Certificate of Incorporation (Incorporated by reference from Form 8-K filed with the SEC on October 7, 2015.) *

Certificate of Amendment to Certificate of Incorporation dated January 20, 2021

By-Laws dated April 23, 1998.

(Incorporated by reference from Form 10-SB filed with the SEC on January 5, 2000.) *

Financing Agreement with Peter Dalrymple (Incorporated by reference from Form 8-K filed with the SEC on August 26, 2014) *

Wells Fargo Loan Documentation (Incorporated by reference from Form 10-Q filed with the SEC on May 13, 2015) *

Letter agreement between Spine Injury Solutions, Inc.

and Jeffrey Cronk (Incorporated by reference from Form 8-K filed with the SEC on September 7, 2017) *

Amended and Restated Revolving Line of Credit Note and Amended and Restated Credit Agreement with Wells Fargo Bank dated August 17, 2017 (Incorporated by reference from Form 10-Q filed with the SEC on November 13, 2017) *

Financing Agreement, Amended and Restated Secured Promissory Note and Amended Security Agreement with Peter Dalrymple dated September 8, 2017 (Incorporated by reference from Form 10-Q filed with the SEC on November 13, 2017) *

Amended and Restated Revolving Line of Credit Note dated September 7, 2018 (Incorporated by reference from Form 10-Q filed with the SEC on November 13, 2018) *

Amended and Restated Continuing Guaranty from Peter Dalrymple dated September 7, 2018 (Incorporated by reference from Form 10-Q filed with the SEC on November 13, 2018) *

Financing Agreement and Amended and Restated Secured Promissory Note with Peter Dalrymple dated September 5, 2018 (Incorporated by reference from Form 10-Q filed with the SEC on November 13, 2018) *

Amended and Restated Promissory Note with Wells Fargo Bank dated September 30, 2019 (Incorporated by reference from Form 10-Q filed with the SEC on November 14, 2019) *

Amended and Restated Security Agreement from Peter Dalrymple dated September 30, 2019 (Incorporated by reference from Form 10-Q filed with the SEC on November 14, 2019) *

Amended and Restated Continuing Guaranty from Peter Dalrymple dated September 30, 2019 (Incorporated by reference from Form 10-Q filed with the SEC on November 14, 2019) *

Secured Promissory Note with Peter Dalrymple, dated August 31, 2020 (Incorporated by reference from Form 8-K filed with the SEC on September 2, 2020) *

Security Agreement with Peter Dalrymple, dated August 31, 2020 (Incorporated by reference from Form 8-K filed with the SEC on September 2, 2020) *

Certification of principal executive officer required by Rule 13a – 14(1) or Rule 15d – 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

28 unchanged sentences

Jerry Bratton

/s/ Jeffrey Cronk, D.C.

March 30, 2020

Jeffrey Cronk, D.C.

/s/ Peter Dalrymple

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures