Current Report Filing (8-k)
June 13 2017 - 12:03PM
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):
May 25, 2017
GROW SOLUTIONS
HOLDINGS, INC.
(Exact name
of registrant as specified in its charter)
Nevada
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000-29301
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87-0575118
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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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1111 Broadway - Suite 406
Denver, CO 80203
(Address of
principal executive offices)
(646) 863-6341
(Registrant’s
telephone number, including area code)
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:
☐ 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))
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
o
If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
o
Item 1.01 Entry into a Material Definitive Agreement.
On May 25, 2017 (the (“Issuance
Date”), Grow Solutions Holdings, Inc., a Nevada corporation (the “Company”), issued a Promissory Note to an investor
(the “Lender”) in the principal amount of $100,000 (the “Note”). The Company received $100,000 in net proceeds
from the sale of the Note.
The Note is due on demand 180 days from
the Issuance Date (the “Maturity Date”). Payment by the Company to Lender under the terms of the Note may be made in
either cash or common stock of the Company, at the option of the Lender. In the event the Company repays the Note in common stock,
such common stock will be issued at a price equal to the closing price of the Company’s common stock on the Maturity Date
(the “Conversion Price”). The Note bears interest at a rate of fifteen percent (15%) per annum, to be accrued through
the Maturity Date. Interest may be paid in cash or common stock of the Company at the option of the Lender on the Maturity Date
at the Conversion Price.
Additionally, the Company will issue
the Lender shares of common stock in an amount equal to thirty three percent (33%) of the outstanding balance of principal and
interest under the Note on the Maturity Date (the “Issuance”). The Issuance of the Company’s common stock to
the Lender shall be at the Conversion Price on the Maturity Date. The Company shall deliver the shares of common stock to the Lender
within ten days after the Maturity Date.
Upon the occurrence of an Event
of Default (as defined in the Note), the Lender shall provide the Company notice of such occurrence, at which time the
Company will have five (5) business days from receipt of such notice to pay the outstanding principal amount of the Note,
with any unpaid interest thereof, in full. In the event full payment is not made upon the expiry of the five (5) day
period, here is a default penalty equal to two percent (2%) of the principal amount per month during the period of default
(the “Default Penalty”). Lender may then, at its sole discretion declare the entire then outstanding principal
amount of this Note together with any unpaid interest and the Default Penalty immediately due and payable, in which event the
Lender may, at its sole discretion take any action it deems necessary to recover amounts due under this Note.
The foregoing descriptions of the Note
do not purport to be complete and is subject to, and qualified in its entirety by the Note, a copy of which is attached hereto
as Exhibit 4.1, and 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.
Item 1.01 above is hereby incorporated by reference.
Item 3.02 Unregistered Sales of Equity Securities.
Item 1.01 above is hereby incorporated by reference.
The Note was not registered under the Securities
Act of 1933, as amended (the “Securities Act”). The Note qualified for exemption under Section 4(a)(2) of the Securities
Act since the issuance of the Note by us did not involve a public offering. The offering was not a “public offering”
as defined in Section 4(a)(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of
the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to
a high number of investors. In addition, the holder of the Note had the necessary investment intent as required by Section 4(a)(2)
of the Securities Act as the investor agreed to and received the Note bearing a legend stating that such Note is restricted pursuant
to Rule 144 of the Securities Act. This restriction ensures that the Note 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.
2
Item 3.03 Material Modification to
Rights of Security Holders.
On June 7, 2017, the Company filed an
amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of the State of Nevada, which,
among other things, established the designation, powers, rights, privileges, preferences and restrictions of the Series A Preferred
Stock, $0.001 par value per share (the “Series A Preferred Stock”).
Among other provisions, each one (1)
share of the Series A Preferred Stock shall have voting rights equal to (x) 0.019607
multiplied by
the total issued
and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote (the “Numerator”),
divided
by
(y) 0.49,
minus
(z) the Numerator. For purposes of illustration only, if the total issued and outstanding
shares of common stock of the Company eligible to vote at the time of the respective vote is 5,000,000, the voting rights of one
share of the Series A Preferred Stock shall be equal to 102,036 (0.019607 x 5,000,000) / 0.49) – (0.019607 x 5,000,000) =
102,036).
Fifty-one (51) shares of Series A Preferred
Stock were authorized and fifty-one (51) shares of Series A Preferred Stock were issued to Grow Solutions Holdings, LLC, a Colorado
limited liability company (the “LLC”) controlled equally by each member of the Board of Directors of the Company (the
“Board”).
The Series A Preferred Stock has no
dividend rights, no liquidation rights and no redemption rights, and was created primarily to be able to obtain a quorum and conduct
business at shareholder meetings. All shares of the Series A Preferred Stock shall rank (i) senior to the Company’s common
stock and any other class or series of capital stock of the Company hereafter created, (ii)
pari passu
with any
class or series of capital stock of the Company hereafter created and specifically ranking, by its terms, on par with the Series
A Preferred Stock and (iii) junior to any class or series of capital stock of the Company hereafter created specifically ranking,
by its terms, senior to the Series A Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary.
Additionally, all of the issued and
outstanding shares of Series A Preferred Stock will be forfeited and canceled by the LLC upon the earlier of (i) the Company closing
a financing transaction whereby it receives an investment in an amount equal to at least $3,000,000, or (ii) twenty four (24) months
from the filing date of the Amendment in the State of Nevada (the “Holding Period”), unless such Holding Period is
extended by a majority vote of the Board.
The foregoing descriptions of the
Amendment and the Series A Preferred Stock designations do not purport to be complete and are subject to, and qualified in
its entirety by, the Amendment, a copy of which is attached hereto as Exhibit 3.1, and incorporated herein by reference.
Item 5.03 Amendments to Articles
of Incorporation or Bylaws; Change in Fiscal Year.
Item 3.03 is hereby incorporated by
reference.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits.
* Filed herewith
3
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned
hereunto duly authorized.
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GROW SOLUTIONS HOLDINGS, INC.
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Date: June 13, 2017
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By:
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/s/ Jeffrey Beverly
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Name:
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Jeffrey Beverly
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Title:
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President
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Grow Solutions (CE) (USOTC:GRSO)
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