Current Report Filing (8-k)
July 21 2017 - 3:48PM
Edgar (US Regulatory)
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 13, 2017
PETROGRESS,
INC.
(Exact
Name of Registrant as Specified in its Charter)
Delaware
|
333-18459
|
27-2019626
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
757
Third Ave., Suite 2110
New
York, New York 10017
(Address
of Principal Executive Office) (Zip Code)
Registrant's
telephone number, including area code:
212-376-5228
(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))
|
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☑
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
2.02 -- Results of Operations and Financial Condition.
On
July 3, 2017, after closing 2Q 2017, the Company paid its obligations under the two convertible notes held by Mammoth Corporation,
totaling $44,887. This payment also retired approximately $65,550 due as a derivative liability arising from the potential obligation
to issue shares upon conversion.
Item
2.03 -- Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On
July 13, 2017, the Company entered into a Revolving Line of Credit Agreement with its President and CEO, Christos P. Traios. In
accordance with the Agreement, the Company also issued a Line of Credit Convertible Promissory Note (LOC Note). Copies of the
Agreement and LOC Note are attached as exhibits. The Agreement and Note restate the Company’s obligations under an existing
Convertible Promissory Note issued to Mr. Traios on April 1, 2016, under which Mr. Traios had advanced $134,600 to the Company
to pay its general operational expenses, including the legal and auditing expenses relating to its SEC reporting requirements.
The Agreement and LOC Note now cover approximately $400,000 in funds advanced by Mr. Traios to or on behalf of the Company, including
the amounts referenced for repayment of the Mammoth Notes.
The
Agreement and LOC Note establish a revolving credit arrangement that permits the Company to call on Mr. Traios to fund up to $1,000,000
of its working capital requirements under a more flexible financing facility that allows advances and repayment without the issuance
and re-issuance of a series of subsidiary notes. The arrangement provides for 8% simple interest, with a 360-day year, on outstanding
amounts, due and payable every six (6) months; for evergreen renewal of the Note, at the parties’ mutual agreement, every
twelve (12) months; for the assignment or sale by Mr. Traios of some portion or all of the outstanding balance on the Note, subject
to certain restrictions; and for the payment of interest due on the Note by issuance of shares of the Company’s common stock
at a conversion rate of $.001 per share. The conversion provisions of the original Convertible Promissory Note issued by the Company
to Mr. Traios allowed conversion of principal and interest at the same conversion rate, and as an inducement for his concession
the Company issued a Warrant covering the right to purchase 15,000,000 shares of common stock at $.05 per share, representing
a premium to market price at the time of this filing of approximately 65%. These remaining terms are not materially different
from the original Convertible Promissory Note issued by the Company to Mr. Traios, instead reflecting a closer integration of
the Company’s agreement with the obligation documents, providing the Company with greater flexibility with respect to advances
and repayments, and confirming the amount of credit available.
Item
3.03 – Material Changes to Rights of Securities Holders.
On
July 13, 2017, the Company created its Series A Preferred Shares, a new class of preferred stock that provides the holder(s),
as a class, with the right to two (2) votes for each share of common stock issued and outstanding, and furthermore requires class
voting such that the holders of a majority of the Series A Preferred Shares must approve, as a class, any matter requiring shareholder
approval. The creation of these shares is authorized by the Company’s Articles of Incorporation and relevant provisions
of the Delaware General Corporation Law: The Company’s Articles of Incorporation provide the directors with “blank
check” authority to establish classes of preferred shares; the Company’s directors approved the establishment and
issuance; and, although not necessary, shareholders holding a majority of the Company’s shares approved the terms and provisions
thereof. These shares were issued to Christos P. Traios in consideration of, and as provided for in, his original employment agreement.
A copy of the Designation of Preferences for Series A Preferred Shares is provided herewith.
The
Company’s establishment of the Series A Preferred Shares situates near total authority over its conduct of business in the
holders in so far as they now will have the right and ability to approve any corporate action requiring shareholder approval by
a margin of 66 2/3% to 33 ½ %. While these provisions do not alter or reduce the obligations of management to adhere to
their duties of care, loyalty, obedience and candor, nor affect the minority rights of shareholders, they should be deemed as
an anti-takeover provision.
Item
5.02 – Compensatory Arrangments of Certain Officers.
On
July 13, 2016, the Company entered into an Employment Agreement with its chief executive, Christos P. Traios. The Agreement was
effective as of April 1, 2017; a copy is provided herewith. The agreement provides for a $120,000 per year salary, with accrual
right for unpaid amounts; issuance of preferred shares as referenced above; and specific provisions regarding termination.
Item
9.01 – Financial Statements and Exhibits.
3.01
- Designation of Series A Preferred Stock
10.01
- Employment Contract with Christos Traios
99.01
- Letter of Credit Agreement
99.02
- Letter of Credit Note
SIGNATURES
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 thereunto duly authorized.
July
19, 2017
PETROGRESS,
INC.
/s/
Christos Traios
Christos
Traios, President and CEO
Petrogress (CE) (USOTC:PGAS)
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