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WEST > SEC Filings for WEST > Form 8-K on 19-Mar-2014All Recent SEC Filings

Show all filings for ANDALAY SOLAR, INC.

Form 8-K for ANDALAY SOLAR, INC.


19-Mar-2014

Unregistered Sale of Equity Securities, Financial Statements and Exhibits


Item 3.02 Unregistered Sales of Equity Securities.

On March 18, 2014, Andalay Solar, Inc. (the "Company") issued under the Securities Purchase Agreement it entered into with an institutional investor (the "Purchaser") on February 25, 2014 a (i) convertible note in the principal amount of $300,000 that matures March 18, 2016 (the "Convertible Note"); and
(ii) five -year warrant (with a cashless exercise feature under certain circumstances) to purchase 7,500,000 shares of common stock of the Company at an exercise price of $.02, subject to adjustment under certain circumstances. The Convertible Note bears interest at the rate of 8% per annum compounded annually, is payable at maturity and the principal and interest outstanding under the Convertible Note are convertible into shares of the common stock of the Company, at any time after issuance, at the option of the Purchaser, at a conversion price equal to $.02, subject to adjustment upon the happening of certain events, including stock dividends, stock splits and the issuance of Common Stock Equivalents (as defined in the Note) at a price below the conversion price. Subject to the Company fulfilling certain conditions, including beneficial ownership limits, the Convertible Note is subject to a mandatory conversion if the closing price of the Company's common stock for any 20 consecutive days commencing six months after the issue date of the Convertible Note equals or exceeds $0.04. Unless waived in writing by the Purchaser, no conversion of the Note can be effected to the extent that as a result of such conversion the Purchaser would beneficially own more than 9.99% in the aggregate of our issued and outstanding common stock immediately after giving effect to the issuance of common stock upon conversion.

The Company has the option of repaying the outstanding principal amount of the Convertible Note, in whole or in part, by paying the Purchaser a sum of money equal to one hundred and twenty percent (120%) of the principal together with accrued but unpaid interest upon 30 days notice, subject to certain beneficial ownership limits. For so long as the Company has any obligation under the Convertible Note, the Company agreed to certain restrictions regarding, among other things, incurrence of additional debt, liens, amendments to charter documents, repurchase of stock, payment of cash dividends, affiliated transactions. The Company is also prohibited from entering into certain variable priced agreements until the Convertible Note is repaid in full. The Convertible Note contains events of default which, if triggered, will result in the requirement to pay a default amount (up to 24%) as specified in the Convertible Note.

The foregoing is not a complete summary of the terms of the Convertible Note or the Warrant described in this Item 3.02, and reference is made to the complete text of the form of Convertible Note and Warrant that is filed herewith as an exhibit.

The Company is relying on an exemption from registration provided under Section 4(a)(2) of the Securities Act for the issuance of the Securities, which exemption the Company believes is available because the Securities were not offered pursuant to a general solicitation, and the status of the purchasers of the Securities as "accredited investors" as defined in Regulation D under the Securities Act.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 Exhibit No.    Description

          4.1   Form of Convertible Note Due March 18, 2016
        4.2     Form of Warrant dated March 18, 2014


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