GLYECO, INC. (OTCMKTS:GLYE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

On April 6, 2018, GlyEco, Inc. (the “Company”) commenced a private placement (the “Private Placement”) of up to $2,500,000 million (the “Maximum Offering Amount) in principal amount of 10% Unsecured Promissory Notes (the “Notes”) and common stock purchase warrants (the “Warrants”) to purchase up to 12,500,000 shares of the Company’s common stock, par value $0.0001 per shares (the “Common Stock”) to a Subscription Agreement (the “Subscription Agreement”) by and among the Company and each prospective investor. Each of the Notes will mature thirteen (13) months from their issuance date (each a “Maturity Date”). The Private Placement will continue until the earlier of (a) the date upon which subscriptions for the Maximum Offering Amount have been received and accepted by the Company or (b) April 30, 2018, unless terminated at an earlier time by the Company, or unless extended by the Company in its sole discretion, without notice to or consent by prospective investors, to a date not later than May 15, 2018.

The Company closed the initial tranche of the Private Placement on April 6, 2018, with two (2) institutional investors (the “Institutional Investors” and each an “Institutional Investor”), for an aggregate principal amount of $1,000,000 of Notes (the “Institutional Notes”) and Warrants to purchase an aggregate of 5,000,000 shares of Common Stock (the “Institutional Warrants”).

The Company closed a subsequent tranche of the Private Placement on April 10, 2018, with one of its directors, Charles F. Trapp (“Trapp”; and together with the Institutional Investors, the “Initial Investors” and each an “Initial Investor”), with respect to a Note with a principal amount of $50,000 (the “Trapp Note”; and together with the Institutional Notes, the “Initial Notes” and each an “Initial Note”) and a Warrant to purchase 250,000 shares of Common Stock (the “Trapp Warrant”; and together with the Institutional Warrants, the “Initial Warrants”).

The proceeds from the purchase of all Notes and Warrants will be used primarily for working capital and general corporate purposes. The Initial Notes and Initial Warrants were issued to the Subscription Agreement, by and among the Company and each Initial Investor.

to the Subscription Agreement, the minimum purchase that may be made by a prospective investor is $50,000. Additionally, in the event that subsequent to April 6, 2018, any prospective investor(s) (the “Prospective Investors”) offers different terms with respect to the Notes and Warrants (the “New Terms”), and each investor who has previously been issued Notes and Warrants, including the Initial Investors, deem such New Terms more favorable, then the Company agrees that all Notes or Warrants issued prior to the subscription by the Prospective Investors shall be amended and modified to reflect such New Terms. The Subscription Agreement further provides that the Company and all investors, including the Initial Investors, agree and acknowledge that any Notes issued to the Subscription Agreement shall rank paripassu with all other Notes.

The Initial Notes bear interest at a rate of 10% per annum and shall be payable on the relevant Maturity Date along with the principal amount of the Initial Notes, plus any liquidated damages and other amounts due under the Initial Notes. At any time after issuance of the Institutional Notes or the Trapp Note, the Company may deliver to such investor a notice of prepayment with respect to any portion of the principal amount of the relevant Initial Note, and any accrued and unpaid interest thereon. Upon the occurrence of an event of default under the Initial Notes, the Company must repay to the Initial Investors a 125% premium of the outstanding principal amount of the Initial Notes and accrued and unpaid interest thereon, in addition to the payment of all other amounts, costs, expenses and liquidated damages due in respect of the Initial Notes.

The Initial Warrants are exercisable to purchase up to an aggregate of 5,250,000 shares of Common Stock (the “Initial Warrant Shares”; and together with the Initial Notes and the Initial Warrants, the “Initial Securities”) commencing on the date of issuance at an exercise price of $0.05 per share (the “Exercise Price”). The Initial Warrants will expire on the third (3^rd) anniversary of their date of issuance. The Exercise Price is subject to adjustment upon stock splits, reverse stock splits, and similar capital changes. An Initial Investor does not have a right to exercise its respective Initial Warrants to the extent that such exercise would result in such Initial Investor being the beneficial owner in excess of 4.99% (or, upon election of such Initial Investor, 9.99%), which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company.

The foregoing does not purport to be a complete description of the Subscription Agreement, the Notes, and the Warrants, and are qualified in their entirety by reference to the full text of such documents, which are attached as Exhibits 10.1, 4.1, and 4.2, receptively, to this Form 8-K and are incorporated by reference herein.

Reference is made to the disclosure set forth under Item 1.01 of this Report, which disclosure is incorporated herein by reference.

Reference is made to the disclosure set forth under Item 1.01 of this Report, which disclosure is incorporated herein by reference.

The sale and the issuance of the Initial Securities were offered and sold in reliance upon exemptions from registration to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated under the Securities Act (“Regulation D”).We made this determination based on the representations of each Initial Investor which included, in pertinent part, that each such Initial Investor was (a) an “accredited investor” within the meaning of Rule 501 of Regulation D or (b) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and upon such further representations from each Institutional Investor that (i) such Initial Investor is acquiring its respective Initial Securities for its own account for investment and not for the account of any other person and not with a view to or for distribution or resale in connection with any distribution within the meaning of the Securities Act, (ii) such Initial Investor agrees not to sell or otherwise transfer its respective Initial Securities unless such Initial Securities are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (iii) such Initial Investor has knowledge and experience in financial and business matters such that such Initial Investor is capable of evaluating the merits and risks of an investment in its respective Initial Securities, (iv) such Initial Investor had access to all of our documents, records, and books pertaining to the investment and was provided the opportunity to ask questions and receive answers regarding the terms and conditions of the offering and to obtain any additional information which we possessed or were able to acquire without unreasonable effort and expense, and (v) such Initial Investor is able to bear the economic risk of an investment in its respective Initial Securities and could afford the complete loss of such investment. In addition, there was no general solicitation or advertising for the Initial Securities issued in reliance upon Regulation D.

(d) Exhibits.

GlyEco, Inc. Exhibit
EX-4.1 2 s109651_ex4-1.htm EXHIBIT 4.1 Exhibit 4.1   EXECUTION VERSION   THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,…
To view the full exhibit click here

About GLYECO, INC. (OTCMKTS:GLYE)

GlyEco, Inc. is engaged in processing of waste glycol into recycled glycol products, specifically automotive antifreeze, and related specialty blended antifreeze, which it sells in the automotive and industrial end markets. The Company’s product offerings include High-Quality Recycled Glycols, Recycled Antifreeze, Recycled HVAC Fluids, Waste Glycol Disposal Services and Windshield Washer Fluid. The Company’s technology allows it to produce glycols, which can be used in industrial application. It formulates various universal recycled antifreeze products for engine coolants. In addition, it customs blend recycled antifreeze to customer specifications. It formulates a universal recycled, heating, ventilating and air conditioning (HVAC) coolant for HVAC fluids. Utilizing its fleet of collection/delivery trucks, the Company collects waste glycol from generators for recycling. It delivers Windshield Washer Fluid product into same store and new store customers as a non-recycled product.