uSell.com, Inc. (OTCMKTS:USEL) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a RegistrantItem 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As previously disclosed in the November 13, 2017 Form 8-K, on November 13, 2017, uSell.com, Inc. (the "Company"), certain of the Company's subsidiaries, and an institutional investor entered into an amendment (the "Note Amendment"), effective November 2, 2017, to that certain Note Purchase Agreement dated January 13, 2017, as amended (the "January Agreement"). to the Note Amendment, the Company and the investor amended certain financial covenants under the January Agreement. Additionally, the Note's interest rate was increased from 13.25 % to 15%.
The foregoing description of the Note Amendment is a summary only and is qualified in its entirety by the full text of the Note Amendment filed as Exhibit 10.1 to the November 13, 2017 Form 8-K and incorporated herein by reference.
Item 3.02Unregistered Sales of Equity Securities.
From November 16, 2017 through November 22, 2017, the Company raised $3,850,000 from the sale of 7,700,000 shares of common stock at $0.50 per share in a private placement offering to 11 accredited investors, including the Company’s Chief Executive Officer and one of the Company’s largest shareholders. In connection with the offering, the Company agreed to register the shares of common stock.
The Company intends to use the proceeds for general working capital and the funding of a $310,000 reserve account as required under the Note Amendment. The form of Securities Purchase Agreement and Registration Rights Agreement are attached as Exhibits 10.1 and 10.2 to this Form 8-K and are incorporated herein by reference.
All of the securities were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933 (the “Act”) and Rule 506(b) promulgated thereunder. These securities may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements under the Act. The investors are accredited investors and there was no general solicitation in connection with the offering.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 20, 2017, the Company and Brian Tepfer, the Company’s Executive Vice President and Chief Executive Officer of We Sell Cellular, LLC (“We Sell”), the Company’s wholly-owned subsidiary and Scott Tepfer, the Company’s Executive Vice President and We Sell’s President (collectively, the “Tepfers”) amended the Tepfers Employment Agreements. to the amendments, the Tepfer’s annual base salaries were reduced to $250,000 and the provisions providing for adjusted base salaries were eliminated.
The foregoing description of the amendments to the Employment Agreements is a summary only and is qualified in its entirety by the full text of the amendments filed as Exhibit 10.3 to this Form 8-K and is incorporated herein by reference.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits.
| 10.1 | Form of Securities Purchase Agreement ** |
| 10.2 | Form of Registration Rights Agreement |
| 10.3 | Form of Amendment to the Tepfer Employment Agreements* |
* Management contract or compensatory plan or arrangement.
** Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the Securities and Exchange Commission staff upon request.
usell.com, Inc. ExhibitEX-10.1 2 s108263_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (this “Agreement”) is dated as of November __,…To view the full exhibit click here
About uSell.com, Inc. (OTCMKTS:USEL)
uSell.com, Inc. (uSell) is a technology-based company. The Company focuses on extracting the value from used mobile devices. It acquires products from both individual consumers, on its Website, uSell.com, and from carriers, retailers and manufacturers through its subsidiary, We Sell Cellular, LLC. These devices are then distributed across the world, which leverages an online marketplace where professional buyers of used smartphones compete to buy inventory in an on-demand fashion. The Company, through uSell.com, allows individual consumers to find cash offers for their items based on the make, model, and condition of each item. Upon accepting an offer, consumers can ship their devices for free using either a prepaid shipping kit or shipping label, and then track the progress of their orders online from initiation to final payment of their devices.
