ITEM 2.01
|
COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
|
As previously reported by Avalanche International Corp., a Nevada corporation (the “
Company
”) in a Current Report on Form 8-K filed with the Securities and Exchange Commission (“
SEC
”) on March 9, 2017 (the “
Initial 8-K
”), the Company entered into a Share Exchange Agreement on March 3, 2017 (the “
Agreement
”), with MTIX Limited, a company formed under the laws of England and Wales (the “
MTIX
”) and the three (3) shareholders of MTIX (the “
Sellers
” and together with the Company and MTIX, the “
Parties
”). The Agreement was amended by the Parties on July 13, 2017, pursuant to the Amendment to the Share Exchange Agreement (the “
Amendment
”), as previously reported in the Company’s Current Report on Form 8-K/A (Amendment No.1) filed with the SEC on July 17, 2017 (the “
Amended 8-K
”).
On August 21, 2017, the Parties entered into the Amendment No. 2 to the Share Exchange Agreement (“
Amendment No. 2
” and together with the Agreement and the Amendment, the “
Amended Agreement
”), which amended the Agreement to include: (i) extension of certain closing dates, (ii) Sellers’ indemnification for tax liability, whereby the Sellers shall be severally responsible for their own direct liabilities to taxes in relation to the securities they may receive pursuant to the Amended Agreement, and (iii) certain other matters.
Upon the terms and subject to the conditions set forth in the Amended Agreement, the Company completed the acquisition of MTIX from the Sellers on August 22, 2017 (the “
Closing
”), through the transfer of all issued and outstanding ordinary shares of MTIX by the Sellers to the Company. Pursuant to the Amended Agreement, the Company issued (a) to the Sellers, 7% secured convertible promissory notes (the “
Notes
”) in the aggregate principal face amount of $9,500,000 in pro rata amounts commensurate with the Sellers’ current respective ownership percentages of MTIX’s ordinary shares, and (b) to Pravin Mistry, the principal shareholder of MTIX (the “
Majority Shareholder
”), 100,000 shares of the Company’s newly designated shares of Class B Convertible Preferred Stock (the “
Class B Shares
”).
Subject to the terms and conditions of the Amended Agreement, at Closing, the Company signed a term sheet with the Majority Shareholder describing the terms of a three year employment agreement with him providing for an initial salary of approximately $160,000 per annum. In addition, the Company executed a letter memorializing the general terms of an additional Special Performance Bonus to the Majority Shareholder, pursuant to which the Majority Shareholder will receive a bonus of 5% of gross revenues generated by each unit ordered, or licensed from the Company, of the first 10 multi-laser surface enhancement technology systems.
The foregoing description of Amendment No. 2 does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 2, which is attached as
Exhibit 2.1
to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing does not purport to be a complete description of the Amended Agreement and is qualified in its entirety by reference to the full text of Amended Agreement. The Agreement and the Amendment were filed with the Initial 8-K and the Amended 8-K, respectively, and are incorporated herein by reference. Additional information about the Closing can be found in the press release issued by the Company on August 24, 2017, a copy of which is attached hereto as
Exhibit 99.1
.
Where You Can Find Additional Information
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE INITIAL 8-K AND ANY OTHER RELEVANT DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION about the Company and MTIX. Investors and security holders are able to obtain these materials and other documents filed with the SEC free of charge at the Commission’s website,
www.sec.gov
. Security holders may also read and copy any reports, statements and other information filed by the Company with the Commission, at the SEC public reference room at 100 F Street, N.E., Washington D.C. 20549. Please call the Commission at 1-800-SEC-0330 or visit the Commission’s website for further information on its public reference room.