GREY CLOAK TECH INC. (OTCMKTS:GRCK) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement. |
Termination of ShareRails, LLC and the Share Exchange
Agreement
On March 31, 2017, Grey Cloak Tech Inc. (the
Company also referred to herein as
us, we and
our), entered into a Share Exchange Agreement,
as previously reported on our Current Report on Form 8-K filed on
April 6, 2017, whereby ShareRails, LLC
(ShareRails) was to become our wholly-owned
subsidiary (the Exchange).
The Share Exchange Agreement provided us the ability to rescind
the Share Exchange Agreement if the ShareRails members were
unable to provide us, within 10 days of the Exchange, a consent
signed by all the members of ShareRails whereby the members agree
to participate in the Exchange and be bound by the Share Exchange
Agreement. The ShareRails members failed to deliver this consent.
Therefore, we elected to rescind the Share Exchange Agreement and
terminate the Exchange.
On May 19, 2017, we entered into a Termination Agreement and
Acknowledgement by and among the Company, ShareRails, Joseph
Nejman, Dmitry Chourpo, Joseph Nejman, in his capacity as the
Selling Members Representative, William Bossung, Fred Covely,
Dimicho Pty. Ltd. and Covely Information Systems (the
Termination Agreement). The Termination
Agreement terminates the Share Exchange Agreement and rescinds
the Exchange.
The Termination Agreement also rescinds the following agreements:
| a. |
Employment Agreement by and between the Buyer and William Bossung, dated March 31, 2017; |
| b. |
Employment Agreement by and between the Buyer and Joseph Nejman, dated March 31, 2017; |
| c. |
Development Services Agreement by and between the Buyer and Covely Information Systems, dated March 31, 2017; |
| d. |
Development Services Agreement by and between the Buyer and Dimicho Pty. Ltd., dated March 31, 2017; |
| e. |
Shareholders Agreement by and between the Buyer, Covely, Bossung, Nejman and Chourpo, dated March 31, 2017; |
| f. |
Amended and Restated Limited Liability Company Operating Agreement of ShareRails, LLC, dated March 31, 2017; |
| g. |
Exchange Agreement by and between the Buyer and Bossung, dated March 31, 2017; |
| h. |
Exchange Agreement by and between the Buyer and Covely, dated March 31, 2017; |
| i. |
Exchange Agreement by and between the Buyer and Chourpo, dated March 31, 2017; and |
| j. |
Exchange Agreement by and between the Buyer and Nejman, dated March 31, 2017. |
Reference is made to the full text of the Termination Agreement,
which is attached hereto as Exhibit 10.1 and incorporated herein
by reference.
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Convertible Promissory Note
On May 19, 2017, in connection with the Termination Agreement,
ShareRails issued a convertible promissory note, in the principal
amount of $100,000 (the Note). to the Note,
ShareRails will repay funds advanced, or to be advanced, to
ShareRails by the Company. The Note accrues interest at a rate of
4% from July 1, 2017 and matures on April 30, 2022.
The Note is convertible into membership interests of ShareRails
upon ShareRails receiving a private equity financing of at least
$1,000,000 or on the maturity date at the option of ShareRails.
The conversion price is 85% of the price per membership unit
issued in the private equity financing or as agreed upon by us
and ShareRails.
Reference is made to the full text of the Note, which is attached
hereto as Exhibit 10.2 and incorporated herein by reference.
Section 3 Securities and Trading Markets
| Item 3.02 | Unregistered Sale of Equity Securities. |
The disclosure in Item 1.01 above regarding the rescission of the
previously reported issuance of securities in the Exchange is
incorporated herein by reference. The Termination Agreement also
rescinds the other issuances and exchanges of common and
preferred stock as reported in our Current Report on Form 8-K
filed on April 6, 2017.
The shares of common and preferred stock offered to Exchange were
offered in reliance on an exemption from registration to Section
4(a)(2) of the Securities Act of 1933, as amended, and Rule 506
of Regulation D. The investors have represented that each is an
accredited investor, as defined in Regulation D, and intended to
acquire the securities for investment purposes only and not with
a view to, or for sale in connection with, any distribution
thereof. The securities were not offered through any general
solicitation or advertisement.
Section 5 Corporate Governance and Management
| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 19, 2017, Joseph Nejman resigned from the Board of
Directors and from his position as our President. Mr. Nejmans
resignation was not in connection with any disagreement with the
Company.
See Item 1.01, above, regarding the termination of the employment
agreement with Mr. Nejman, which description is incorporated
herein by reference.
See Item 1.01, above, regarding the termination of the employment
agreement with Mr. Bossung, which description is incorporated
herein by reference.
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Section 9 Financial Statements and Exhibits
| Item 9.01 | Financial Statements and Exhibits. |
(d)Exhibits
| 10.1 |
Termination Agreement and Acknowledgement by and among the Company, ShareRails, LLC, Joseph Nejman, Dmitry Chourpo, Joseph Nejman, in his capacity as the Selling Members Representative, William Bossung, Fred Covely, Dimicho Pty. Ltd. and Covely Information Systems, dated May 19, 2017 |
|
| 10.2 |
Promissory Note issued by ShareRails, LLC to the Company, dated May 19, 2017 |
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About GREY CLOAK TECH INC. (OTCMKTS:GRCK)
Grey Cloak Tech Inc. is engaged in developing a cloud-based software to detect advertising fraud on the Internet. The Company’s cloud-based product, Fraudlytic, is a secure platform that detects, analyzes and destroys bots while allowing consumer traffic to click and view digital advertisements. Fraudlytic’s suite of filters detects various permutations of digital advertising fraud, including cookie stuffing, advertisement stacking, and domain spoofing to allow advertisers to regain control of their advertising budget. Its software application has been uploaded to the Amazon cloud and the overall system runs over My Structured Query Language (MySql) instances using the Amazon storage area network (SAN) for storage of the data. Its TrueClick Compliance product includes the features of the basic TrueClick package with the addition of a selective online marketing feature, which is useful for regulated industries in state or federal compliance. GREY CLOAK TECH INC. (OTCMKTS:GRCK) Recent Trading Information
GREY CLOAK TECH INC. (OTCMKTS:GRCK) closed its last trading session down -0.0090 at 0.0860 with shares trading hands.
