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BEES > SEC Filings for BEES > Form 8-K on 26-Jun-2013All Recent SEC Filings

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Form 8-K for BEESFREE, INC.


26-Jun-2013

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligat


Item 1.01 Entry into a Material Definitive Agreement.

As previously reported, on March 13, 2013 (the "Initial Closing Date"), BeesFree, Inc., a Nevada corporation (the "Company"), entered into and consummated a Securities Purchase Agreement (the "Initial Purchase Agreement") with an accredited investor (the "March 2013 Investor") for the private sale (the "Offering") of a senior secured convertible promissory note (the "Note") in the principal amount of $210,000 and also issued the investor a warrant to purchase 1,400,000 of shares of the Company's Common Stock (the "Warrant Shares"). Accordingly, for each $105,000 invested, investors were to receive warrants to purchase 700,000 shares of common stock, par value $0.001 per share (the "Common Stock"). Subsequent to the Initial Closing Date, the Company revised the terms of the Offering to increase the number of shares of Common Stock underlying the warrants to 1,050,000 shares of Common Stock per $105,000 invested and issued a warrant for an additional 700,000 shares of Common Stock to the March 2013 Investor. Between June 20, 2013 and June 24, 2013, the Company sold additional Notes and entered into and consummated an Amended and Restated Securities Purchase Agreement (the "Amended Purchase Agreement" and together with the Initial Purchase Agreement, the "Purchase Agreement") whereby the Company sold additional Notes in the aggregate principal amount of $525,000 and issued Warrants to purchase 5,250,000 shares of Common Stock pursuant to the Purchase Agreement.

The Notes bear interest at a rate of 15% per annum, compounded quarterly. Principal and accrued interest on the Notes is convertible into shares of the Company's common stock, par value $0.001 per share (the "Common Stock") at a conversion price of $1.50 per share (the "Conversion Shares"). Principal and accrued interest on the Notes is due and payable twenty-four (24) months from the date of the Purchase Agreement (the "Maturity Date").

The indebtedness evidenced by the Notes is senior to, and has priority in right of payment over, all indebtedness of Company. The Notes are secured by a first lien and security interest in all of the assets of the Company and its wholly-owned subsidiary, BeesFree USA, Inc., pursuant to the terms of a certain Security Agreement, dated as of March 13, 2013 (the "Security Agreement").

From the date of the Notes until the earlier of 90 days following such date that all of the Registrable Securities (as defined in the Purchase Agreement) are either included for resale in an effective registration statement or are eligible for resale without restriction pursuant to Rule 144(b)(1)(i) of the Securities Act of 1933, as amended, or a combination thereof, the conversion price of the Notes is subject to full-ratchet price protection in the event the Company issues or sells, or is deemed to have issued or sold, subject to certain standard exceptions, any shares of its Common Stock or securities convertible in Common Stock for consideration per share less than the Conversion Price of the Notes then in effect. In addition, the conversion price may be adjusted to reflect subdivisions or combinations of the Company's Common Stock such as through stock splits, dividends, distributions and similar adjustments to its capital stock.

The Investors, excluding the March 2013 Investor for this calculation, also received Warrants exercisable for a period of five years from issuance to purchase an aggregate 5,250,000 shares of the Company's Common Stock (the "Warrant Shares"). The initial exercise price of the Warrants is $1.50 per share, subject to adjustment. Furthermore, if the fair market value (as defined in the Warrants) of one share of Common Stock is greater than the exercise price then in effect, and the Warrant Shares are not subject to an effective registration statement or no current prospectus is available for the resale of the Warrant Shares at the time of exercise, the Warrant Shares may be exercised, in whole or in part, on a cashless basis.

The Warrants also provides for full ratchet anti-dilution protection in the event that any shares of Common Stock, or securities convertible into Common Stock, are issued at less than the exercise price of the Warrants, subject to certain standard exceptions, until the earlier of 90 days following such date that all of the Registrable Securities (as defined in the Purchase Agreement) are either included for resale in an effective registration statement or are eligible for resale without restriction pursuant to Rule 144(b)(1)(i) of the Securities Act, or a combination thereof. In addition, the exercise price of the Warrants may be adjusted to reflect subdivisions or combinations of the Company's Common Stock such as through stock splits, dividends, distributions and similar adjustments to its capital stock.

Registration Rights

The Company also agreed under the Purchase Agreement to, on one occasion for a two year period beginning 30 days from issuance of the Notes and Warrants, register the Conversion Shares and Warrant Shares upon the demand of the holders of the majority of the Conversion Shares and Warrant Shares, and the Company also agreed to indemnify the Investor for losses arising out of or resulting from material breaches of representations, warranties, agreements and covenants made by the Company in the Purchase Agreement.

Through the date hereof, the Company has received gross proceeds of $735,000, which will be used for the general working capital needs of the Company.

The foregoing summary of the terms and conditions of the Purchase Agreement, the Security Agreement, the Note and Warrant do not purport to be complete and is qualified in its entirety by reference to the full text of each of the aforementioned documents attached as Exhibits hereto, and which are hereby incorporated herein by reference.



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 hereof is incorporated herein by reference.



Item 3.02. Unregistered Sales of Equity Securities

See Item 1.01 of this Current Report on Form 8-K, which Item is incorporated herein by this reference, for a description of the terms of the Purchase Agreement, the Note and Warrant, including the issuance of the securities in connection therewith.

The securities issued above were issued under the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. The securities contain a legend restricting transferability absent registration or applicable exemption. The Investor received current information about the Company and had the opportunity to ask questions about the Company. The Investor was deemed to be an accredited investor.



Item 9.01 Financial Statements and Exhibits:

(a) Financial Statements - Not Applicable

(b) Pro-Forma Financial Information - Not Applicable

(c) Shell Company Transactions - Not Applicable

(d) Exhibits:

10.1 Form of Amended and Restated Securities Purchase Agreement.

10.2 Form of Security Agreement.(1)

10.3 Form of 15% Senior Secured Convertible Promissory Note.(1)

10.4 Form of Warrant.(1)

(1) Included as an exhibit to the Current Report on Form 8-K filed on March 15, 2013 and incorporated herein by reference.

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