Current Report Filing (8-k)
November 08 2017 - 2:44PM
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): November 3, 2017
THE
CHRON ORGANIZATION, INC.
(Exact
name of registrant as specified in its charter)
Nevada
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000-55771
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20-8881686
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(State
or other jurisdiction
of incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification Number)
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5851
Legacy Circle, Suite 600
Plano,
Texas 75024
(Address
of principal executive offices) (zip code)
(972)
900-2870
(Registrant’s
telephone number, including area code)
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):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
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Item
1.01 Entry into a Material Definitive Agreement
On
November 3, 2017, The Chron Organization, Inc. (the “Company”) entered into an Equity Purchase Agreement and a registration
rights agreement (the “Registration Rights Agreement”) with Bellridge Capital, L.P. (“Bellridge”), pursuant
to which Bellridge has agreed to purchase from us up to $2,500,000 in shares of our common stock, subject to certain limitations
from time to time over a 24-month period commencing four trading days after the date of effectiveness of a registration statement
which provides for the resale of such shares pursuant to the Registration Rights Agreement. The shares issuable to Bellridge under
the Equity Purchase Agreement are being offered pursuant to this prospectus. The likelihood that the Company will receive the
full amount of proceeds available under the Equity Purchase Agreement and its reliance on Bellridge as a source of funding will
depend on a number of factors, including the prevailing market price of our common stock and the extent to which we are able to
secure working capital from other sources. No fees or commissions are required to be paid upon the sale to Bellridge of these
shares. The Company agreed to reimburse Bellridge $12,500 for legal fees incurred in connection with this transaction.
Upon
the effectiveness of a registration statement which provides for the resale of the shares, we may direct Bellridge, at our sole
discretion and subject to certain conditions, to purchase a minimum of $25,000 and a maximum of $250,000 of shares (each a “Draw
Down”) that is no more than 300% of the average trading volume of our common stock during the 10-day period immediately
prior to the Draw Down. The purchase price of the shares under the Equity Purchase Agreement is 80% multiplied by the lowest trade
price of our common stock during the five trading days immediately prior to each Draw Down notice representing a 20% discount.
As
consideration for its commitment to purchase shares of common stock pursuant to the Equity Purchase Agreement, we agreed to issue
to Bellridge 5,756,579 shares of common stock.
The Company also entered
into a memorandum of understanding with Bellridge dated as of November 3, 2017 (the “MOU”). The MOU requires the Company
to, among other things, file a registration statement on Form S-1 with the Commission (the “Debenture Registration Statement”)
on or before December 25, 2017 to register the resale by Bellridge of all Debenture Registrable Securities. “Debenture Registrable
Securities” means (i) all shares of Common Stock issuable upon conversion of the debentures issued to Bellridge by the Company
(collectively the “Debentures”) including the 10% Original Issue Convertible Debenture issued by the Company to Bellridge
on March 17, 2017 and the 10% original Issue Convertible Debenture issued by the Company to Bellridge on June 20, 2017 and (ii)
all shares of Common Stock issuable upon the exercise of the exercise of warrants issued to Bellridge by the Company (the “Warrants”)
as of the date of the MOU; subject to any limits that may be imposed by the Securities and Exchange Commission, and provided that
a share of Common Stock shall cease to be a Debenture Registrable Security upon the earliest to occur of the following: (a) its
sale pursuant to the Debenture Registration Statement or Rule 144 under the Securities Act; or (B) it becomes eligible for resale
by its holder under Rule 144 without the requirement for the Company to be in compliance with the current public information required
thereunder and without volume or manner-of-sale restrictions. If the Company has not filed the Debenture Registration Statement
with the Commission by December 25, 2017 (unless the registration of the Debenture Registrable Securities is prohibited by the
Securities and Exchange Commission) or the Debenture Registration Statement has not been declared effective by the Commission
by February 28, 2018, then (a) the face amount of each of the outstanding Debentures shall increase by 150%, (b) the Purchaser
may declare an event of default under the Debentures and (c) the Purchaser may avail itself of any other rights and remedies it
has under the Debenture, or at law or otherwise. The rights provided in this section are in addition to and not in lieu
of any rights the Purchaser has under the Securities Purchase Agreements, between the Purchaser and the Company, entered into
in connection with the Debentures and Warrants. In the event that the Commission prohibits the Debenture Registration Statement,
then the penalties in the MOU shall not apply, and the Company agrees to repay the Debentures pursuant to the documentation entered
into on March 17, 2017 and June 20, 2017 (as referenced above).
The
foregoing descriptions of the Equity Purchase Agreement, Registration Rights Agreement and MOU do not purport to be complete and
are qualified in their entirety by reference to the full text of the SPA, Registration Rights Agreement and MOU which are attached
as Exhibits 10.1, 10.2 and 10.3 respectively to this Current Report on Form 8-K, and are incorporated herein by reference.
Item
3.02 Unregistered Sales of Equity Securities
The
information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The issuance
of the securities whose information is set forth in Item 1.01 of this Current Report on Form 8-K were not registered under the
Securities Act of 1933, as amended (the “Securities Act”), but qualified for exemption under Section 4(a)(2) of the
Securities Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuance
of such securities by the Company did not involve a “public offering,” as defined in Section 4(a)(2) of the Securities
Act, due to the insubstantial number of persons involved in the transaction, size of the offering, manner of the offering and
number of securities offered. The Company did not undertake an offering in which it sold a high number of securities to a high
number of investors. In addition, these investors had the necessary investment intent as required by Section 4(a)(2) of the Securities
Act since they agreed to, and will receive, share certificates bearing a legend stating that such securities are restricted pursuant
to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into
the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met
the requirements to qualify for exemption under Section 4(a)(2) of the Securities Act.
Item
9.01 Financials Statements and Exhibits.
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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THE CHRON ORGANIZATION, INC.
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Dated:
November 8, 2017
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By:
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/s/
Alex Rodriguez
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Alex
Rodriguez
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President
and Chief Executive Officer
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