HPIL HOLDING (NASDAQ:HPIL) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Equity Purchase Agreement with KODIAK CAPITAL GROUP
LLC
On August 12, 2016, HPIL Holding (theCompany) entered into an
Equity Purchase Agreement (theOriginal Equity Purchase Agreement)
with KODIAK CAPITAL GROUP, LLC (KCG). The Company and KCG
executed an Amended and Restated Equity Purchase Agreement dated
December 27, 2016 (the Amended Equity Purchase Agreement;
together with the Original Equity Purchase Agreement, the Equity
Purchase Agreement), which completely restates and makes minor
revisions to the Original Equity Purchase Agreement, such as
correcting the stated capitalization of the Company and extending
the period of the Original Equity Purchase Agreement. The Company
and KCG also entered into a Registration Rights Agreement dated
August 12, 2016 (the Registration Agreement, and together with
the Equity Purchase Agreement, the Agreements). to the Equity
Purchase Agreement, the Company, at its sole and exclusive
option, may issue and sell to KCG, from time to time as provided
therein, and KCG would purchase from the Company shares of the
Companys common stock (Shares) equal to a value of up to Five
Million Dollars ($5,000,000). to the Registration Agreement, the
Company has agreed to provide certain registration rights under
the Equity Act of 1933, as amended, and applicable state laws
with respect to all Shares issued in connection with the Equity
Purchase Agreement.
Subject to the terms and conditions of the Equity Purchase
Agreement, the Company, at its sole and exclusive option, may
issue and sell to KCG, and KCG shall purchase from the Company,
the Shares upon the Companys delivery of written notices to KCG.
The aggregate maximum amount of all purchases that KCG shall be
obligated to make under the Equity Purchase Agreement shall not
exceed $5,000,000. Once a written notice is received by KCG, it
shall not be terminated, withdrawn or otherwise revoked by the
Company. The purchase price per share for each purchase of Shares
to be paid by KCG shall be seventy percent (70%) of the lowest
trading price (or if there are no recorded trades, the lowest
closing price) during the Valuation Period (as defined and
calculated to the Equity Purchase Agreement). KCG is not
obligated to purchase any Shares unless and until the Company has
registered the Shares to a registration statement on Form S-1 (or
on such other form as is available to the Company).
Additionally, on June 28, 2016, upon the signing of a Term Sheet
for the Equity Purchase Agreement, the Company issued to KCG a
Convertible Promissory Note (the Note) in the principal amount of
$215,000 as payment of a commitment fee to induce KCG to enter
into the Agreements. The Note is due in full on or before January
28, 2017. The Company may prepay this Note in whole or in part at
any time following at least fifteen (15) and no more than sixty
(60) days advance written notice to the Holder, provided that the
Holder shall retain all rights of conversion until the date of
repayment, notwithstanding the pendency of any prepayment notice.
KCG has the right to convert all or any portion of the note
balance at any time at a conversion price per share of fifty
percent (50%) of the Current Market Price (as defined and
calculated to the Note), which is adjustable in accordance with
the Note terms in the event certain capital reorganization,
merger, or liquidity events of the Company as further described
in the Note. Upon an Event of Default (as defined in the Note),
the principal amount increases to $250,000 and the conversion
price shall decrease to 25% of the Current Market Price (as
defined and calculated to the Note).
On December 27, 2016, the Company and KCG entered an Amendment
and Waiver (the Amendment and Waiver), to which KCG waived
certain defaults of the Company under the Note and amended the
Note to delete a default provision requiring the Company to file
a registration statement by a certain date, amend a default
provision to reflect the Companys listing on the OTCPink market,
and extend the maturity date to July 28, 2017.
The Original Equity Purchase Agreement, Amended Equity Purchase
Agreement, Registration Agreement, Note, and Amendment and
Waiver contain other provisions customary to transactions of
this nature. The foregoing descriptions of the Original Equity
Purchase Agreement, Amended Equity Purchase Agreement,
Registration Agreement, Note, and Amendment and Waiver are
qualified in their entirety by reference to the Original Equity
Purchase Agreement, Amended Equity Purchase Agreement,
Registration Agreement, Note, and Amendment and Waiver, which
are filed herewith as Exhibits and incorporated herein by
reference.
Securities Purchase Agreement with KODIAK CAPITAL GROUP
LLC
On December 27, 2016, the Company and KCG entered into a
Securities Purchase Agreement (the Securities Purchase
Agreement), to which the Company sold to KCG a convertible
promissory note in the amount of $60,000 for a purchase price
of $50,000. to the Securities Purchase Agreement, the Company
issued to KCG a 15% Convertible Note (the December Note) in the
principal amount of $60,000. The December Note accrues interest
at the rate of 15% per year and is due in full on or before
December 27, 2017. The Company may prepay this Note in whole at
any time prior to six months from the issue date on at least 5
Trading Days (as defined in the December Note) but not more
than 10 Trading Days notice, provided that the Holder shall
retain all rights of conversion until the date of repayment,
notwithstanding the pendency of any prepayment notice.
KCG has the right to convert all or any portion of the note
balance at any time at a conversion price per share of forty
percent (40%) lowest sale price for the Companys Common Stock
during the thirty (30) consecutive Trading Days immediately
preceding the Conversion Date (as defined and calculated to the
Note), which is adjustable in accordance with the Note terms in
the event certain capital reorganization, merger, or liquidity
events of the Company as further described in the Note.
The Securities Purchase Agreement and December Note contain
other provisions customary to transactions of this nature. The
foregoing descriptions of the Securities Purchase Agreement and
December Note are qualified in their entirety by reference to
the Securities Purchase Agreement and December Note, which are
filed herewith as Exhibits and incorporated herein by
reference.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR
AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A
REGISTRANT.
The disclosure required by this item is included in Item 1.01
hereof and is incorporated herein by reference.
ITEM 3.02 UNREGISTERED SALES OF EQUITY
SECURITIES
The disclosure required by this item is included in Item 1.01
hereof and is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
|
Exhibit Number |
Exhibit |
|
10.1* |
Equity Purchase Agreement, by and between the Company |
|
10.2* |
Amended and Restated Equity Purchase Agreement, by and |
|
10.3* |
Registration Rights Agreement, by and between the |
|
10.4* |
Convertible Promissory Note, by and between the Company |
|
10.5* |
Amendment and Waiver, by and between the Company and |
|
10.6* |
Securities Purchase Agreement, by and between the |
|
10.7* |
15% Convertible Note, by and between the Company and |
*Filed herewith
