KONARED CORPORATION (OTCMKTS:KRED) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement
On September 29, 2017, the Company and VDF entered into a Sale Restriction Agreement (the "Sale Restriction Agreement") whereby the parties have agreed to certain restrictions on VDF's ability to publicly sell though market transactions the shares of Company common stock, par value $0.001 per share ("Common Stock"), that were acquired by VDF upon completion of the Share Conversion (as defined in the Senior Note) of the Senior Note or that may be acquired by VDF upon the exercise of the Warrant (collectively, the "Covered Shares"). Under the Sale Restriction Agreement, VDF will be permitted to publicly sell through transactions on a stock exchange or over-the-counter market upon which the Common Stock is traded up to 1,050,000 of the Covered Shares (the "Quarterly Sales Limit") in each three-month period, without the prior written consent of the Company with the first three-month period commencing on the first day of September 2017 (the "Restriction Period Commencement Date"), provided, however, if VDF does not sell at least 4 million of the Covered Shares during the twelve-month period commencing on the Restriction Period Commencement Date (the "Initial Restriction Period") then the Quarterly Sales Limit shall terminate as of the end of the Initial Restriction Period and no longer be in force or effect. If VDF sells at least 4 million of the Covered Shares during the Initial Restriction Period, then the Quarterly Sales Limit shall continue in force and effect for a subsequent twelve-month period commencing at the end of the Initial Restriction Period (the "Second Restriction Period"). If, during the Second Restriction Period, VDF does not sell at least 4 million of the Covered Shares, not including any Covered Shares sold during the Initial Restriction Period, then the Quarterly Sales Limit shall terminate and no longer be in force or effect as of the end of the Second Restriction Period. If, during the Second Restriction Period, the Shareholder sells at least 4 million of the Covered Shares, not including any Covered Shares sold during the Initial Restriction Period, then the Quarterly Sales Limit shall continue in force and effect for a subsequent twelve-month period commencing at the end of the Second Restriction Period (the "Final Restriction Period"). If not terminated earlier as set forth above, the Quarterly Sales Limit shall terminate at the end of the Final Restriction Period.VDF acknowledges that the Company is not providing any guarantee to the Shareholder that the Shareholder will be able to sell the Covered Shares. The Company is listed on the OTCQB as of the date of this Agreement and, at its own discretion, the Company may elect to delist from the OTCQB or move to another qualified exchange.
Additionally, the Sale Restriction Agreement terminated VDF's right to demand registration of the Covered Shares to the Registration Rights Agreement between the parties, dated January 28, 2014, at any time when the Quarterly Sales Limit is in effect. The Sale Restriction Agreement shall continue in full force and effect until the earlier of (i) termination of the Quarterly Sales Limit and (ii) the occurrence of a change of control.
The foregoing description of the First Amendment to VDF Note, Amended Investor Rights Agreement, and the Sale Restriction Agreement is qualified in its entirety by reference to the full text of each agreement, a copy of each agreement is filed as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively, to this Current Report on Form 8-K and is incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities
On October 4, 2017, the Company issued to VDF, holder of the Senior Note, 13,092,242 shares of the Company's Common Stock (the "Conversion Shares") in connection with the conversion for VDF to the term of the Senior Note, described in this Current Report in Item 1.01. VDF converted $916,457 of principal amount of the Senior Note at a conversion price of $0.07.
The Senior Notes were originally issued in a private placement in reliance upon the exemption from registration in Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). The Senior Note was issued upon conversion of the Senior Note were issued in reliance upon the exemption from registration in Section 3(a)(9) of the Securities Act, as the Conversion Shares were exchanged or issued by the Company in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange or issuances.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 30, 2017, Shaun Roberts relinquished his role as the Company's Chief Executive Officer to concentrate on his role as Chairman of the Company's Board of Directors (the "Board"). The Board then appointment Kyle Redfield, the Company's President, as the Company's Chief Executive Officer, effective September 30, 2017.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
KonaRed Corp ExhibitEX-10.1 2 konaredexh10_1.htm KONARED 8K,…To view the full exhibit click here
About KONARED CORPORATION (OTCMKTS:KRED)
KonaRed Corporation (KonaRed) offers consumer products. The Company’s principal product line is its coffee fruit wellness drinks. KonaRed’s anti-oxidant beverage products consist of various formulations, such as 16 oz. KonaRed Original Antioxidant Juice; 10.5 oz. KonaRed Original Antioxidant Juice; 10.5 oz. KonaRed Antioxidant additional flavor combinations, including organic green tea and coconut water, and 12oz. Ready-to-Drink (RTD) Cold Brew Coffees. KonaRed Original Antioxidant Juice, Cold Brew Coffees and Kona coffees are offered to retail consumers across the United States, Canada and Asia. Its RTD Cold Brew Coffees include the flavors of Original, Hawaiian Vanilla and Espresso. The Company produces wellness nutritional products, which include antioxidant KonaRed Hawaiian Superfruit Powder Tub and its Wake-up Performance Powder Packets. The Company’s wellness nutritional products are available at select locations of Vitamin Shoppe nationwide and in various chains in Hawaii.
