FOOTHILLS EXPLORATION, INC. (OTCMKTS:FTXP) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement
On September 29, 2017, Foothills Exploration, Inc. (the “Company”), issued to an unaffiliated investor a promissory note (“Note”) and three tranches of warrants for an aggregate consideration of $250,000. The Note accrues no interest if paid when due, and is due and payable on January 2, 2018 (“Maturity”). If principal is not paid on or before Maturity, interest will accrue at the rate of 15% per year until paid. The warrants have the following terms:
| ● | 375,000 warrants to purchase 375,000 shares of common stock of the Company at a strike price of $0.665 per share expiring on September 29, 2019, |
| ● | 375,000 warrants to purchase 375,000 shares of common stock of the Company at a strike price of $1.25 per share expiring on September 29, 2020, |
| ● | 185,000 warrants to purchase 185,000 shares of common stock of the Company at a strike price of $2.00 per share expiring on September 29, 2020. |
Each tranche of warrants is subject to down round adjustment provisions if the Company during the term of that tranche issues additional securities for consideration per share, after giving effect to fees, commission and expenses, that is less, or which on conversion or exercise of the underlying security is less, than $0.665 per share (as adjusted for any change resulting from forward or reverse splits, stock dividends and similar events).
The obligations under the Note were personally guaranteed by Kevin J. Sylla, Executive Chairman of the Company. The Company intends to utilize the proceeds received for general operating and corporate matters. No broker-dealer or placement agent was retained or involved in this transaction.
The summary of the transactions described above is qualified in its entirety by reference to the Promissory Note and form of warrant which are filed as Exhibit 10.1 and 10.2 respectively, to this report.
Item 3.02 Unregistered Sales of Equity Securities.
The information provided in response to Item 1.01 of this report is incorporated by reference into this Item 3.02. The offer and sale of the securities were made in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D under the Securities Act. The offering and sale were not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the investor in connection with the offering. This current report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.
Item 8.01 Other Events
To satisfy most favored nation provisions in previously entered securities purchase agreements that are triggered by the transaction described in Item 101 above, Company will issue 136,015 shares of common stock and warrants to purchase 136,015 shares of common stock, in the aggregate, to certain investors who purchased units from the Company, at a $1.00 per unit, with each unit consisting of one share and one warrant. See the Company’s Current Report on the Form 8-K filed with the SEC on June 5, 2017. Of this amount, 100,752 shares and warrants to purchase 100,752 shares of common stock will be issued to Wilshire Energy Partners LLC, an entity controlled by Kevin J. Sylla. The exercise price of these investor warrants will be adjusted to $0.665 per share.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
FOOTHILLS EXPLORATION, INC. ExhibitEX-10.1 2 ex10-1.htm THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,…To view the full exhibit click here
About FOOTHILLS EXPLORATION, INC. (OTCMKTS:FTXP)
Foothills Exploration Inc, formerly Key Link Assets Corp., is a shell company. The Company’s business plan is to acquire small and medium grocery stores in non-urban locales that are not directly served by large national supermarket chains. The Company plans to acquire grocery stores that are approximately 15,000 to 20,000 square feet in size. The Company seeks to drive additional customer traffic to its acquired grocery stores and expand their operating margins through the introduction of new products and services to those stores that lack them, including pharmaceutical services, floral departments, gasoline and other automotive products, prepared foods, lottery service and alcoholic beverages. The Company’s stores will sell non-perishable, perishable and non-food products. The products include various categories, such as grocery, frozen and dairy; produce; meat and seafood; bakery; floral; beer, wine and spirits, and health and beauty care.