Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 9, 2017
SINCERITY APPLIED MATERIALS HOLDINGS CORP.
(Exact
Name of Registrant as Specified in Charter)
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Nevada
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333-201365
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30-0803939
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File
Number)
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(IRS
Employer Identification
No.)
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Level 4, 10 Yarra
Street
South Yarra (Australia) VIC
3141
(Address of
Principal Executive Offices)
Registrant’s
telephone number, including area code: +
61-3-98230361
(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))
Item 1.01.
Entry into a Material Definitive Agreement.
On
November 9, 2017 we entered into a Securities Purchase Agreement
(“SPA”) with Emunah Funding, LLC (“Emunah”)
and Fourth Man, LLC (“Fourth Man”), Emunah and Fourth
Man hereinafter being collectively referred to as the
“Purchasers,” pursuant to which we issued and sold to
the Purchasers convertible promissory notes, dated November 9,
2017, in the aggregate principal amount of $108,000 (the
“Notes”). The Notes were subject to an 8% original
issue discount resulting in an aggregate purchase price to the
Purchasers of $100,000. Pursuant to the SPA, we also issued three
year warrants (the “Warrants) to the Purchasers, dated
November 9, 2017, consisting of Class A Warrants to purchase up to
an aggregate of 102,858 shares (subject to adjustment) of our
common stock at an initial exercise price of $6.00 per share and
Class B Warrants to purchase up to an aggregate of 800,000 shares
(subject to adjustment) of our common stock at an initial exercise
price of $7.50 per share. The Class A Warrants and Class B Warrants
are hereinafter referred to as the “Warrants”. The SPA
provides for us to register the shares issuable upon conversion of
the Notes and the exercise of the Warrants. We are required to file
a registration statement (the “Registration Statement”)
with respect to the shares underlying the Notes and Warrants within
30 days of the November 9, 2017 issuance date and have such
Registration Statement declared effective not more than 120 days
following such issuance date.
The
outstanding principal balance of the Notes, including accrued
interest then due thereon, can be prepaid by us, in whole or in
part, at any time during the 179 day period following November 9,
2017, upon five business days prior written notice, at a premium of
118%. Commencing on February 9, 2018 and monthly thereafter we are
required to pay all accrued interest then due on the Notes together
with 15% of the original principal amount of the Notes. The Notes
are convertible at any time commencing 170 days after November 9,
2017 at 75% of the lowest trading price for our common stock during
the 20 trading days ending on the last trading day prior to the
conversion date. We are required to initially reserve 2,000,000
shares of our common stock to cover Note conversions and Warrant
exercises. We are also required to cause our transfer agent to
issue and transfer shares to the holders of the Notes within five
trading days of our receipt of a conversation notice. If we fail to
deliver certificates within the required delivery period, the
converting holder has the right to rescind such conversion and we
will be required to pay liquidated damages to such holders. Such
delivery failure may also subject us to the buy-in liability. The
conversion price of the Notes is subject to customary adjustments
for stock splits and stock dividends, subsequent rights offerings,
pro rata shareholder distributions and fundamental transactions.
The conversion price is also subject to full ratchet anti-dilution
protection triggered by sales of our common stock or common stock
equivalents, excluding Exempt Issuances, as such term is defined
therein, during the term of the Notes, at a price below the
conversion price in effect at the time of issuance. The Notes also
contain negative covenants which restrict our ability to enter into
certain transactions or take certain actions while the Notes are
outstanding without the prior written consent of the holders of the
Notes. If an Event of Default, Fundamental Transaction or Change of
Control Transaction, as such terms are defined in the Notes,
occurs, the outstanding principal amount of the Notes, liquidated
damages, and other amounts owing in respect thereof through the
date of acceleration, becomes, at the holders’s election
,immediately due and payable in cash at the Mandatory Default
Amount, as such term is defined in the Notes. Commencing on the
maturity date of the Notes, if the Notes have not been repaid by
such date, or five days after the occurrence of an Event of
Default, interest on the Notes accrues at the rate of 24% per annum
or the maximum rate permitted under applicable law. The Notes
contain customary Events of Default including, but not limited to,
(i) the failure to pay principal, interest or liquidated damages
when due; (ii) breach of Note covenants or agreements; (iii) breach
of representation or warranties made in the Notes or other
transaction documents; (iv) bankruptcy events; (v) Change of
Control or Fundamental Transactions; (vi) failure to satisfy
current public information requirements under Rule 144; (vii)
certificate delivery failures; (viii) breaches of material terms of
the SPA; (ix) the entry of a monetary judgment, writ or similar
final process involving more than $50,000 which remains unvacated,
unbonded or unstayed for a period of 90 days; (x) any dissolution,
liquidation or winding up of our business; (xi) failure to maintain
the listing of our common stock on a trading market; (xii) our
effectuation of a reverse stock split without 10 days prior written
notice to the holders; (xiii) the required restatement of our
financial statements; or (xiv) our default under any of the other
Notes.
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The
Class A Warrants are exercisable on a cashless basis. We are
required to deliver certificates upon exercise within 3 trading
days of our receipt of all holder deliverables. Failure to do so
requires us to pay liquidated damages to the holders and subjects
us to potential buy-in liability. The Class A Warrants contain
adjustment provisions, including full ratchet anti-dilution rights,
which are identical, in all material respects, to those contained
in the Notes. The Class B Warrants are identical to the Class A
Warrants in all material respects except that they are not
exercisable on a cashless basis, they have a higher initial
exercise price, are exercisable for more shares than the Class A
Warrants and have exercise limitations. The Class B Warrants cannot
be exercised absent a default under the Notes. They are not
exercisable prior to the 16th day after an Event
of Default under the Notes. For every $27 of principal repaid on
the Notes prior to an Event of Default or within 15 day of an Event
of Default, 200 Warrants exercisable under the holder’s Class
B Warrants will be cancelled such that if the entire principal
amount and all accrued interest due on a holder’s Note is
repaid prior to the 16th day after an Event
of Default, all of the Warrants exercisable under the
holder’s Class B Warrants will be cancelled and will no
longer be exercisable.
Item 3.02.
Unregistered Sale of Equity Securities.
Reference
is made to the disclosures set forth under Item 1.01 above, which
disclosures are incorporated herein by reference.
Effective
November 9, 2017 we issued convertible promissory notes in the
aggregate principal amount of $108,000, three-year Class A Warrants
exercisable for the purchase of an aggregate of 102,858 shares of
our common stock at an initial exercise price of $6.00 per share
and three-year Class B Warrants exercisable for the purchase of an
aggregate of 800,000 shares of our common stock at an initial
exercise price of $7.50 per share in reliance on Section 4(a)(2) of
the Securities Act of 1933, as amended.
Item
9.01 Financial Statements and
Exhibits.
(d)
Exhibits
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Exhibit No.
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Description
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Securities
Purchase Agreement dated November 9, 2017
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Form of
12% Convertible Promissory Note dated November 9, 2017
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Form of
Class A Warrant dated November 9, 2017
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Form of
Class B Warrant dated November 9, 2017
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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 hereunto duly authorized.
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SINCERITY APPLIED MATERIALSHOLDINGS CORP.
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Date: November
20, 2017 |
By:
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/s/
Zhang
Yiwen
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Name:
Zhang
Yiwen
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Title:
Chief Executive
Officer
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