ITEM 1.01
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 19, 2016, we entered into a Limited Liability Company Agreement (the "Agreement") with Lakeshore Recycling Systems LLC located in Morton Grove, Illinois ("Lakeshore"), creating ECOS BIO-ART LLC, a Delaware Limited Liability Company ("LLC"). Under the terms of the Agreement, we own 95% of the LLC and Lakeshore owns 5% of the LLC. Lakeshore made an initial capital contribution of $100.00. We made an initial capital contribution of $100 as well. In addition to our initial contribution of $100.00, we will contribute to the LLC, the net profit resulting from the sales of the first eight biofermentation systems. The biofermentation systems turn organic waste into a byproduct which can be processed into a high quality organic fertilizer.
On the same date, we entered into a Supply Agreement (the "Supply Agreement") with LLC wherein we agreed to manufacture and supply equipment and products to LLC for resale or lease to Lakeshore and LLC's customers. The amount of equipment and supplies we supply to LLC will be determined by written purchase orders from LLC to us. LLC shall purchase and take from us, such quantities of products and equipment as LLC requests from time to time. We are processing an initial order for an product system. The purchase price of the initial product is $687,375.00. LLC will be invoiced by us for the $687,375.00 which LLC will pay from immediately available funds. The initial sales price reflects the purchase of equipment and products by Lakeshore from LLC and is evidenced by an Equipment Purchase Agreement between LLC and Lakeshore.
On December 19, 2016, Lakeshore and LLC entered into the foregoing referenced Equipment Purchase Agreement wherein LLC agreed to produce certain equipment for Lakeshore at a purchase price of $687,375.00. Lakeshore will pay for said equipment upon installation plus an invoice from LLC. In addition to the foregoing purchase, the Equipment Purchase Agreement provides for the purchase of additional systems.
On December 19, 2016, we issued a Common Stock Purchase Warrant No. 1 to Lakeshore to purchase and amount of common stock equal to five and one-third percent (5 1/3%) of the issued and outstanding shares of our common stock. The warrant may be exercised at any time between March 31, 2017 and December 15, 2026 at an exercise price of $0.0003 per share.
On December 19, 2016, we issued a Common Stock Purchase Warrant No. 2 to Lakeshore to purchase and amount of common stock equal to five and one-third percent (5 1/3%) of the issued and outstanding shares of our common stock. The warrant may be exercised at any time between March 31, 2017 and December 15, 2026 at an exercise price of $0.0025 per share.
On December 19, 2016, we issued a Common Stock Purchase Warrant No. 3 to Lakeshore to purchase and amount of common stock equal to five and one-third percent (5 1/3%) of the issued and outstanding shares of our common stock. The warrant may be exercised at any time between March 31, 2017 and December 15, 2026 at an exercise price of $0.005 per share.