Current Report Filing (8-k)
July 22 2019 - 9:28AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): July 18, 2019
(Exact
Name of Registrant as Specified in Charter)
Georgia
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000-53754
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20-2027731
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(State
or Other Jurisdiction
of
Incorporation
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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101
Aylesbury Rd.
Worcester,
MA
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01609
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (508) 791-9114
n/a
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (
see
General Instruction A.2. below):
☐ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Exchange Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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NONE
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NONE
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NONE
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Item
1.01.
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Entry
into a Material Definitive Agreement.
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(ab)
On July 18, 2019, Vystar Corporation entered into a Stock
Purchase Agreement in which it purchased a 58% ownership interest in Murida Furniture Co., Inc. d/b/a/ Rotmans Furniture (“Rotmans”).
The purchase price for the shares was $2,030,000 paid through four different unsecured promissory notes, all of which accrue interest
at a 5% interest rate. Two of the notes, representing $1,522,500, are convertible into shares of common stock at a fifty percent
(50%) discount from value as the time of conversion, subject to certain pre-conversion milestones. Steven Rotman, President of
Vystar, is President of Rotmans and a 42% stockholder who was one of the stockholders who sold his shares.
On
July 18, 2019, Vystar Corporation entered into a $3 million loan facility with Fidelity Co-operative Bank, whereby it and Rotmans
executed a Master Credit Agreement, a $3,000,000 Revolving Demand Line of Credit Note and a Master Security Agreement, among other
documents. The Master Credit Agreement is attached as
Exhibit 10.2
; the $3,000,000 Revolving Demand Line of Credit Note
is attached as
Exhibit 10.3
; and the Master Security Agreement is attached as
Exhibit 10.4
. As a demand note, the
creditor may make for demand for payment at any time. Absent an extension, the line will be reduced to $2.5 million in September
2019.
The
Stock Purchase Agreement is attached as Exhibit 10.1 and the Press Release announcing these matters is attached as
Exhibit
99.1
.
Item
2.01 Completion of Acquisition or Disposition of Assets
The
information set forth in Item 1.01 is incorporated herein by reference.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.
The
information set forth in Item 1.01 is incorporated herein by reference.
Vystar
Corporation additionally borrowed $110,000 from Mr. Steven Rotman and $75,000 from Mr. Gregory Rotman, as reflected by two 8%
unsecured promissory notes.
Item
3.02 Unregistered Sales of Equity Securities
The
information set forth in Item 1.01 is incorporated herein by reference.
Steven
Rotman personally guaranteed the Fidelity Co-operative Bank loan facility. As consideration for his guaranty, he was granted rights
to preferred stock. The preferred stock has a redemption right (for 299 shares) for $75,000 after two years and voting rights
equal to 40% of the voting class taken with all other classes of stock. Vystar Corporation intends to file a Certificate of Designations
to create the preferred class, after which Mr. Rotman will receive his preferred shares.
Five
other stockholders (some of whom are affiliates of Vystar Corporation) who delivered a guarantee of $500,000 were granted rights
to a separate class of preferred stock, which rights include a redemption right of $100,000 after two years and voting rights
equal to 20% of the voting class taken with all other classes of stock. Vystar Corporation intends to file one or more Certificates
of Designations to create the preferred class, after which the guarantors will receive their preferred shares.
Item
3.03 Material Modification to Rights of Security Holders
The
information set forth in Item 3.02 is incorporated herein by reference.
Voting
rights of common stock holders have been modified; all matters shall require additional approval of holders of the class of preferred
stock.
Item
5.01 Changes in Control of Registrant
The
information set forth in item 3.02 and Item 3.03 are incorporated herein by reference.
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Item
5.03
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Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year
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On
July 17, 2019 the Board ratified an Amendment to the Articles of Incorporation which increased the authorized shares to 1.5 billion
shares of common stock, and 15 million shares set aside for preferred stock. A copy of the Articles of Incorporation, as amended,
is attached as
Exhibit 2.1
. The amendment for the increase in authorized shares was approved by the stockholders on December
31, 2018.
Vystar
Corporation intends to file a Certificate of Designations with respect to two classes of preferred stock. The rights of the preferred
stock are as set forth in Item 3.02, incorporated herein by reference.
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(a)
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Vystar
Corporation intends to file by amendment to this Current Report the required financial
statements no later than 71 calendar days after the date the initial report on Form 8-K
must be filed.
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(d)
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Exhibit
Number
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Description
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2.1
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Articles
of Incorporation, as amended
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10.1
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Stock
Purchase Agreement dated July 18, 2019
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10.2
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Master
Credit Agreement dated July 18, 2019
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10.3
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$3,000,000
Revolving Demand Line of Credit Note dated July 18, 2019
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10.4
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Master
Security Agreement dated July 18, 2019
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99.1
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Press
Release
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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VYSTAR CORPORATION
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Date: July 19, 2019
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By:
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/s
Steven Rotman
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Name:
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Steven Rotman
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Title:
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President/Chief Executive Officer
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