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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): December 29, 2023
KeyStar
Corp.
(Exact
name of registrant as specified in its charter)
Nevada |
|
000-56290 |
|
85-0738656 |
(State
or other jurisdiction of
incorporation) |
|
(Commission
File
Number) |
|
(I.R.S.
Employer
Identification
No.) |
78
SW 7th Street, Suite 500,
Miami,
Florida |
|
33130 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (866) 783-9435
(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:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17CFR 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)) |
Securities
registered pursuant to Section 12(b) of the Act: None.
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 ☒
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.
Item 1.01 Entry into a Material Definitive Agreement.
The
disclosures set forth in Item 2.03 are incorporated by reference into this Item 1.01.
Item 1.02 Termination of a Material Definitive Agreement.
The
disclosures set forth in Item 2.03 are incorporated by reference into this Item 1.02.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
On
December 29, 2023, KeyStar Corp., a Nevada corporation (the “Company,” “we” or “our”),
entered into a Fifth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a
Florida limited liability limited partnership (“Excel”) in the principal amount of not more than $2,000,000 (the “Note”).
The Note amends and restates that certain Fourth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note between
us and Excel entered into on September 14, 2023 in the principal amount of not more than $10,000,000 (the “Former Note”).
Excel is controlled by Mr. Bruce Cassidy, our Secretary and sole member of our board of directors (the “Board”). The
Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon
repayment of any amount of principal or interest under the Note, we may not reborrow under the Note.
A
total of $10,366,652.74 of indebtedness under the Former Note was converted into shares of our common stock (the “Shares”)
at a conversion price of $0.40 per Share (based on the sale by the Company of Shares within the last two years at $0.50 per share multiplied
by 80%) on December 28, 2023. As a result of the conversion, the outstanding indebtedness under the Former Note was reduced to $1,135,000,
which is the aggregate outstanding principal balance of all loans under the Note as of the date of the Note, and as of the date of this
Current Report on Form 8-K.
All
loans made under the Note accrue interest at a fixed rate per annum equal to 15.0% (the “Fixed Rate”). On the first day of
each month to the date on which Excel demands payment of the Note, we will pay to Excel interest, in arrears, on the aggregate outstanding
principal balance of the Note at the Fixed Rate.
Notwithstanding
the above, outstanding principal and accrued and unpaid interest are due and payable upon demand. We have the right to prepay the Note,
in whole or in part, at any time; provided, however, we must (i) provide Excel prior written notice of our intention to make such prepayment;
and (ii) pay to Excel all interest accrued on the outstanding principal balance of the Note to the date of such prepayment.
If
the Company: (i) fails to comply with any provision under the Note, including, but not limited to, failing to immediately pay all amounts
due to Excel after demand thereof is made; or (ii) becomes subject to certain bankruptcy or insolvency events, at the option of Excel,
the unpaid principal amount of the Note, accrued interest thereon, any fees or any other sums payable thereunder will thereafter until
paid in full bear interest at a rate per annum equal to the Fixed Rate plus 2.00%.
Excel
may, at its sole option, upon written notice, convert all or any portion of the indebtedness incurred under the Note (“Debt”)
into fully paid and non-assessable Shares at a conversion price in an amount equal to the product of the Lowest Recent Price multiplied
by 80%. The Lowest Recent Price is the lowest price per Share that we have sold one or more Shares to an investor or lender within the
24-month period prior to an applicable date of conversion; provided, however, that if no Shares were sold within such 24-month period,
the Lowest Recent Price will be $0.50 per Share.
In
case of a stock split, a stock combination, or a reverse stock split of the Shares, the number of Shares into which any Debt may be converted
and the conversion price shall be proportionately adjusted in the manner determined by the Board acting in good faith. Furthermore, in
connection with any reclassification, capital reorganization, or other change of outstanding Shares, or in case of any consolidation
or merger of the Company with or into another entity, Excel shall have the right thereafter, by converting the Debt, to receive upon
such conversion the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification,
capital reorganization, or other change, consolidation or merger by a holder of the number of Shares that could have been received upon
conversion of the Debt immediately prior to such reclassification, capital reorganization, or other change, consolidation or merger.
The
foregoing summary of the Note is qualified in its entirety by reference to the full text of the Note which is attached as Exhibit 10.1
hereto and is incorporated by reference herein. You are urged to read said exhibit attached hereto in its entirety.
Item 3.02 Unregistered Sales of Equity Securities.
On
December 27, 2023, with our consent, a total of $1,540,000.00 of the principal amount due under the Former Note was assigned from Excel
to eight (8) third parties (each, a “Debt Assignee”) pursuant to an Assignment and Assumption for each Debt Assignee.
The following day, we received a total of nine (9) Conversion Notices which elected, in aggregate, that a total of $10,366,652.74 of
indebtedness under the Former Note be converted at a conversion price of $0.40 per Share (based on the sale by the Company of Shares
within the last two years at $0.50 per share multiplied by 80%) into 25,916,631.85 Shares (the “Conversion Shares”). Excel
converted $8,826,652.74 into 22,066,631.85 Conversion Shares. The Debt Assignees, collectively, converted $1,540,000 into an aggregate
of 3,850,000 Conversion Shares.
The
offer, sale and issuance of the Conversion Shares were deemed to be exempt from registration under the Securities Act of 1933, as amended
(the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated
thereunder, as transactions by an issuer not involving a public offering. The converting debt holders acquired the Conversion Shares
for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed
to the Conversion Shares upon issuance thereof.
After
the issuance of the Conversion Shares, we have a total of 67,821,631.85 Shares issued and outstanding.
The
foregoing summary of the Conversion Notice is qualified in its entirety by reference to the full text of the Conversion Notice which
is attached as Exhibit 4.1 hereto and is incorporated by reference herein. You are urged to read said exhibit attached hereto in
its entirety.
Item
9.01 Financial Statements and Exhibits
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.
Date:
January 4, 2024 |
KEYSTAR CORP. |
|
|
|
|
By: |
/s/
Walter Tabaschek |
|
|
Walter
Tabaschek, CFO |
Exhibit
4.1
FORM
OF CONVERSION NOTICE
December
[ ], 2023
KeyStar
Corp
Attn:
Bruce Cassidy, Interim Chief Executive Officer
78
SW 7th Street, Suite 800
Miami,
FL 33130
Re: |
Fourth
Amended and Restated Discretionary Convertible Non-Revolving Line of Credit Demand Note, dated September 14, 2023, issued by KeyStar
Corp (“KeyStar”) to Excel Family Partners, LLLP (“EFP”) in the original principal amount of
$10,000,000.00 (the “Note”). |
Capitalized
terms used herein without definition will have the meanings given to such terms in the Note.
Mr.
Cassidy:
The
undersigned refers to the Assignment and Assumption Agreement, dated December [ ], 2023, between EFP and the undersigned, whereby EFP
assigned to the undersigned a total of [($______)] of the Debt (the “Subject Debt”), together with EFP’s rights
under the Note in regard to the Assigned Debt (the “Assignment”). As the assignee of the Subject Debt by effect of
the Assignment, the undersigned has the rights of a Lender to convert all or part of the Subject Debt to equity pursuant to Section 4(a)
of the Note.
In
connection with the Note, the undersigned hereby irrevocably elects to convert all of the Subject Debt to fully paid and non-assessable
shares of common stock of KeyStar, pursuant to Section 4(a) of the Note, with the following characteristics:
1. | The
Conversion Amount will be an amount equal to the Subject Debt; |
2. | The
Lowest Recent Price is $0.50. This is based on KeyStar’s most recent sale of shares
of its common stock to an investor or lender being the sale of shares of common stock in
April 2023 for $0.50 per share; |
3. | The
Conversion Price will be $0.40. This is 80% ($0.50 x 80% = $0.40) of the Lowest Recent Price
in accordance with Section 4(a) of the Note. |
4. | The
number of Shares to be issued will be [ ]. This amount is the quotient of dividing the Conversion
Amount by the Conversion Price [($______ / $________ = $_________)] in accordance with Section
4(a) of the Note. |
5. | The
Conversion Date is the date of this letter. The undersigned understands and agrees that the
Shares will be issued by KeyStar’s transfer agent on or shortly after the Conversion
Date. |
6. | The
Shares will be issued to the undersigned with standard 1933 Exchange Act restrictions. |
This
letter should be considered a Conversion Notice to complete the conversion of the Subject Debt to equity according to the above characteristics.
The
undersigned agrees to cooperate with KeyStar’s transfer agent and provide it any additional information or documents reasonably
requested for the issuance of the Shares.
|
Regards, |
|
|
Lender: |
|
|
|
[
] |
|
Address: |
[
] |
|
[EIN][SSN]: |
[
] |
CC:
Clark Hill PLC, Attn: Daniel Schenck, 14850 N, Scottsdale Road, Suite 500, Scottsdale, Arizona 85254
Exhibit
10.1
FIFTH
AMENDED AND RESTATED
DISCRETIONARY
CONVERTIBLE REVOLVING LINE OF CREDIT DEMAND NOTE
$2,000,000.00 |
Sarasota,
Florida |
|
Dated
as of December 29, 2023 |
FOR
VALUE RECEIVED, and intending to be legally bound hereby, KEYSTAR CORP, a Nevada corporation (the “Maker”), hereby
promises to pay ON DEMAND to the order of EXCEL FAMILY PARTNERS, LLLP, a Florida limited liability limited partnership (the “Lender”),
the lesser of (i) the principal sum of Two Million DOLLARS ($2,000,000.00) (the “Loan
Amount”) or (ii) the aggregate unpaid principal balance of all Loans (as hereinafter defined) made by the Lender to the Maker
from time to time, as may be evidenced by inscriptions made on Schedule 1 hereto, or as may be entered in a loan account on the
Lender’s books and records, or both (together will all extensions, renewals, refinancing or refundings in whole or in part, as
amended, modified or supplemented from time to time, this “Note”), together with interest thereon at the rate or rates
specified herein, as follows:
1. The
Revolving Credit Loan Facility.
(a) The
Loans. Subject to the terms and conditions hereof and relying upon the representations and warranties set forth in this Note, the
Lender has made and may make loans (each, a “Loan” and collectively, the “Loans”) to the Maker
at any time or from time to time in an aggregate principal amount which will not exceed the Loan Amount.
(b) Nature
of the Loans. Within the limits of time and amount set forth in this Note, the Maker may borrow, repay and reborrow under this Note.
(c) Making
the Loans. Subject to the terms and conditions set forth in this Note, and provided that the Maker has satisfied all applicable conditions
specified herein, the Lender, in its sole and absolute discretion, will make the Loans to the Maker.
(d) DISCRETIONARY
ADVANCES. This Note does not constitute a committed line of credit. Loans under
this Note, if any, shall be made by the Lender in its sole and absolute discretion. Nothing contained in this Note shall be construed
to obligate the Lender to make any Loan in any amount and the Lender shall have the right to refuse to make any Loan at any time without
prior notice to the Maker.
(e) Maximum
Principal Balance of the Loans. The aggregate principal amount of the Loans outstanding will not at any time exceed the Loan Amount.
The Maker agrees that if at any time the aggregate principal amount of the Loans outstanding exceeds the Loan Amount (the “Excess
Amount”), the Maker will promptly pay to the Lender such Excess Amount.
(f) Use
of Proceeds. The Loans may be subject to restricted uses from time to time, at the sole and absolute discretion of the Lender. Lender
may provide written instructions (instructions via email are permitted) to Maker regarding restrictions on the use of the Loans. Absent
such instructions from the Lender, the Maker may use the Loans for (i) general company purposes and/or (ii) any other use approved in
writing by the Lender, in its sole and absolute discretion.
(g) Outstanding
Principal Balance of the Loans. All advances of principal made on this Note may be inscribed by the Lender on Schedule 1 hereto
in the Lender’s discretion or entered on the Lender’s books and records. Each inscription or entry shall be prima facie evidence
of the facts so set forth. No failure by the Lender to make, and no error by the Lender in making, any inscription on Schedule 1
shall affect the Maker’s obligation to repay the full principal amount advanced by the Lender to or for the account of the Maker,
or the Maker’s obligation to pay interest thereon at the agreed upon rate.
2. Interest Rate.
(a) Interest.
Subject to the terms and conditions of this Note, the aggregate outstanding principal balance of the Loans will bear interest at a fixed
rate per annum equal to 15.0% (the “Fixed Rate”). Interest on the Loans, unpaid fees and other sums payable hereunder
will be computed on the basis of a year of 365 days and paid for the actual number of days elapsed.
(b) Interest
After Default or Demand. If the Maker (i) fails to comply with any provision hereunder, including, but not limited to, failing to
immediately pay all amounts due hereunder to the Lender after demand thereof is made, or (ii) becomes subject to any event described
in Section 8 hereof, at the option of the Lender, the unpaid principal amount of the Loans or any portion thereof, accrued interest
thereon, any fees or any other sums payable hereunder will thereafter until paid in full bear interest at a rate per annum equal to the
Fixed Rate plus 2.00%.
3. Description of Payments.
(a) Payments
of Interest. On the first day of each month to the date on which Lender demands payment of this Note, the Maker will pay to the Lender
interest, in arrears, on the aggregate outstanding principal balance of the Loans at the Fixed Rate.
(b) Payments
of Principal. If not sooner paid, the entire principal balance of all outstanding Loans, together with all unpaid accrued interest
thereon, and all other sums and costs owed to the Lender by the Maker with respect to the Loans will be immediately due and payable ON
DEMAND, without presentment, protest or notice or further demand of any kind, all of which are hereby waived and an action therefore
shall accrue immediately.
(c) Optional
Prepayments. The Maker will have the right to prepay the Loans, in whole or in part, at any time; provided, however, the Maker must
(i) provide the Lender prior written notice of the Maker’s intention to make such prepayment and (ii) pay to the Lender all interest
accrued on the outstanding principal balance of the Loans to the date of such prepayment and all other fees, costs and charges required
to be paid by the Maker to and for the benefit of the Lender.
(d) Payments.
All payments (and to the extent the Maker determines to make any prepayments) to be made in respect of principal, interest, fees or other
amounts due from the Maker under this Note will be payable on or before 5:00 p.m. (Eastern Time) on the day when due without presentment,
further demand, protest or notice of any kind, all of which are hereby expressly waived. Payments made after 5:00 p.m. (Eastern Time)
shall be deemed to be made on the next Business Day. All such payments must be made to the Lender at its designated address in lawful
money of the United States of America in immediately available funds without setoff, counterclaim or other deduction of any nature. Subject
to the terms and conditions of this Note, all such payments will be applied at the option of the Lender to accrued and unpaid interest,
outstanding principal and other sums due under this Note in such order as the Lender may elect. All such payments will be made absolutely
net of, without deduction or offset, and altogether free and clear of any and all present and future taxes, levies, deductions, charges
and withholdings and all liabilities with respect thereto, excluding income taxes imposed on the Lender under the Laws (as hereinafter
defined) of the United States or any state or political subdivision thereof.
4. Conversion.
(a) Right
to Convert. The Lender may, at its sole option, convert all or any portion of the Debt (as hereinafter defined) into fully paid and
non-assessable shares of common stock of the Maker (the “Shares”) at a conversion price in an amount equal to the
product of the Lowest Recent Price (as hereinafter defined) multiplied by 80% (such amount is referred to as the “Conversion
Price”). The number of Shares to be issued upon each conversion of the Debt shall be determined by dividing the Conversion
Amount (as hereinafter defined) by the applicable Conversion Price then in effect on the date specified in a notice of conversion (“Conversion
Notice”) given by Lender, delivered to Maker by Lender on such conversion date (the “Conversion Date”).
Promptly after receipt of a Conversion Notice, the Maker shall provide evidence in form and substance acceptable to the Lender in its
sole discretion, that the conversion of such Debt into Shares has occurred.
(b)
Adjustments for Reclassification and Reorganization. In case of any reclassification, capital reorganization, or other change
of outstanding Shares, or in case of any consolidation or merger of the Maker with or into another entity (other than a consolidation
or merger in which the Maker is the continuing company and which does not result in any reclassification, capital reorganization, or
other change of outstanding Shares), the Maker shall cause effective provision to be made so that the Lender shall have the right thereafter,
by converting the Debt, to receive upon such conversion the kind and number of shares of stock or other securities or property (including
cash) receivable upon such reclassification, capital reorganization, or other change, consolidation or merger by a holder of the number
of Shares that could have been received upon conversion of the Debt immediately prior to such reclassification, capital reorganization,
or other change, consolidation or merger. Any such provision shall include provision for adjustments that shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 4. The foregoing provisions shall similarly apply to successive
reclassifications, capital reorganizations, and other changes of outstanding shares and to successive consolidations or mergers. If the
consideration received by the holders of Shares is other than cash, the value shall be as determined by the board of directors of the
Maker acting in good faith.
(c) Adjustment
for Stock Splits. If and whenever the Maker shall declare or cause a stock split, a stock combination, or a reverse stock split of
the Shares, the number of Shares into which the Debt may be converted and the Conversion Price shall be proportionately adjusted in the
manner determined by the Maker’s board of directors acting in good faith. The number of Shares into which the Debt may be converted,
as so adjusted, shall be rounded down to the nearest whole number and the Conversion Price shall be rounded to the nearest cent.
5. Representations
and Warranties. The Maker represents and warrants to the Lender that: (i) it is duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its formation, and is in good standing and registered to conduct business in all other jurisdictions
in which any such failure would materially and adversely affect its ability to perform its obligations hereunder, (ii) the Maker has
full power, authority and legal right to enter into this Note and the other Loan Documents and to perform all of its respective obligations
hereunder and thereunder and (iii) this Note and the other Loan Documents have been duly executed and delivered by the Maker, and this
Note and the other Loan Documents constitute the legal, valid and binding obligation of the Maker enforceable in accordance with their
terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar Laws affecting creditors’
rights generally.
6. Affirmative
Covenants. The Maker covenants and agrees with the Lender as follows:
(a) Notice
of Breach. Promptly upon becoming aware of any failure of the Maker to comply with any provision hereunder, the Maker will give the
Lender notice thereof, together with a written statement signed on behalf of the Maker setting forth the details of such failure and
any action taken or contemplated to be taken by the Maker with respect thereto.
(b) Further
Information. The Maker will promptly furnish, or will cause to be promptly furnished, to the Lender such other information, and in
such form, as the Lender may reasonably request from time to time.
(c) Further
Assurances. The Maker, at the Maker’s own cost and expense, will cause to be promptly and duly taken, executed, acknowledged
and delivered all such further acts, documents and assurances as the Lender may reasonably request from time to time in order to carry
out the intent and purposes of this Note and the transactions contemplated by this Note.
(d) Other
Conditions. Concurrently herewith, the Maker will deliver such other documents and satisfy such other conditions as may be reasonably
required to be delivered or satisfied by the terms of this Note and/or any other Loan Document.
7. Negative
Covenants. The Maker covenants to the Lender as follows:
(a) Liens.
The Maker will not at any time create, incur, assume or permit to exist any Lien on or any of its assets without the prior written consent
of Lender, which consent may be given or withheld in Lender’s sole discretion.
(b) Indebtedness.
The Maker will not, at any time, create, incur, assume or suffer to exist any Indebtedness (as hereinafter defined) without the Lender’s
prior written consent, except:
(i) Indebtedness
under this Note or any other Loan Document or any other document, instrument or agreement between the Maker and the Lender; and
(ii) current
accounts payable, accrued expenses and other expenses arising out of transactions (other than borrowing) in the ordinary course of business.
(c) Disposition
of Assets. Except as set forth in this Note and/or any other Loan Document, the Maker will not sell, convey, pledge, assign, abandon,
transfer or dispose of, voluntarily or involuntarily, any of its assets without the Lender’s prior written consent.
(d) Dividends
and Distributions. The Maker will not make, cause, permit or allow the payment of any dividends or distributions to any member of
Maker without the Lender’s prior written consent.
8. Bankruptcy/Insolvency.
(a) If
a proceeding shall have been instituted in respect of the Maker:
(i) seeking
to have an order for relief entered in respect of or seeking a declaration or entailing a finding that the Maker is insolvent or a similar
declaration or finding, or seeking dissolution, winding-up, charter revocation or forfeiture, liquidation, reorganization, arrangement,
adjustment, composition or other similar relief with respect to the Maker, his assets or debts under any Law relating to bankruptcy,
insolvency, relief of debtors or protection of creditors, termination of legal entities or any other similar Law now or hereafter in
effect and said proceeding or order is not dismissed, vacated or stayed within sixty (60) days of his commencement or entry; or
(ii) seeking
appointment of a receiver, trustee, custodian, liquidator, assignee, sequestrator or other similar official for the Maker or for all
or any substantial part of his property; or
(b) if
the Maker shall become insolvent, shall become generally unable to pay his debts as they become due, shall voluntarily suspend transaction
of his businesses, shall make a general assignment for the benefit of creditors, shall institute a proceeding described in Section
8(a)(i) or shall consent to any such order for relief, declaration, finding or relief described therein, shall institute a proceeding
described in Section 8(a)(ii) of this Note or shall consent to any such appointment or to the taking of possession by any such
official of all or any substantial part of his property whether or not any proceeding is instituted, shall dissolve, wind-up or liquidate
any substantial part of his properties, or shall take any action in furtherance of any of the foregoing.
THEN,
IN ADDITION TO THE LENDER’S UNQUALIFIED RIGHT TO DEMAND PAYMENT OF THE OUTSTANDING AGGREGATE PRINCIPAL BALANCE AND ALL ACCRUED
INTEREST ON THE LOANS, the unpaid principal amount of this Note, interest accrued on the unpaid principal amount and all other amounts
owing by the Maker under this Note shall automatically become immediately due and payable without presentment, demand, protest or notice
of any kind, all of which are expressly waived, and an action for any amounts due shall accrue immediately.
9. Remedies
Cumulative. The rights and remedies of the Lender will be cumulative and may be pursued singly, concurrently, or successively in
the Lender’s sole discretion, and may be exercised as often as necessary; and the failure to exercise any such right or remedy
will in no event be construed as a waiver or release of the same.
10. Definitions.
As used herein:
(a) “Affiliate”
of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person; and (y) the term “control” (including the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or otherwise
(b) “Business
Day” will mean any day which is neither a Saturday or Sunday nor a legal holiday on which commercial banks are authorized or
required to be closed in Sarasota, Florida.
(c) “Closing
Date” will mean as of December 29, 2023.
(d) “Conversion
Amount” means, with respect to any conversion of the Debt, the sum of (i) the principal amount of this Note to be converted
in such conversion plus (ii) at the Lender’s option, accrued and unpaid interest, if any, on such principal amount to the Conversion
Date.
(e) “Conversion
Date” will mean that as set forth in Section 4(a) hereof.
(f) “Conversion
Notice” will mean that as set forth in Section 4(a) hereof.
(g) “Conversion
Price” will mean that as set forth in Section 4(a) hereof.
(h) “December
2023 Loans” will mean that as set forth in Section 13(l) hereof.
(i) “Debt”
will mean, collectively, (A) all indebtedness, whether of principal, interest, fees, expenses or otherwise, of the Maker to the Lender,
whether now existing or hereafter incurred including, but not limited to, future loans and advances, if any, under this Note, as the
same may be amended from time to time, together with any and all extensions, renewals, refinancings or refundings thereof in whole or
in part, and (B) all costs and expenses including, without limitation, to the extent permitted by Law, reasonable attorneys’ fees
and legal expenses, incurred by the Lender in the collection of any of the indebtedness referred to in clause (A) above in amounts due
and owing to the Lender under this Note.
(j) “Excess
Amount” will mean that as set forth in Section 1(e) hereof.
(k) “Existing
Note” will mean that as set forth in Section 13(l) hereof.
(l) “Fixed
Rate” will mean that as set forth in Section 2(a) hereof.
(m) “Indebtedness”
will mean, all obligations for borrowed money, direct or indirect, incurred, assumed or guaranteed (including, without limitation, all
notes payable and drafts accepted representing the Loan Amount).
(n) “Law”
or “Laws” will mean, singularly or collectively, as the context may require, any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Official Body.
(o) “Lender”
will mean that as set forth in the preamble hereof.
(p) “Lien”
will mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature
including, but not limited to, any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security for Indebtedness.
(q) “Loan”
or “Loans” will mean that as set forth in Section 1(a) hereof.
(r) “Loan
Amount” will mean that as set forth in the preamble hereof.
(s) “Loan
Document” or “Loan Documents” will mean, singularly or collectively, as the context may require, (i) this
Note and (ii) any and all other documents, instruments, certificates and agreements executed and delivered in connection with this Note,
as any of them may be amended, restated, modified or supplemented from time to time.
(t) “Lowest
Recent Price” means, as of each applicable Conversion Date, the lowest price per Share that Company has sold one or more Shares
to an investor or lender within the 24-month period prior to the applicable Conversion Date; provided, however, that if no Shares were
sold within such 24-month period, the Lowest Recent Price will be $0.50 per Share.
(u) “Maker”
will mean that as set forth in the preamble hereof.
(v) “Note”
will mean that as set forth in the preamble hereof.
(w) “Notices”
will mean that as set forth in Section 13(f) hereof.
(x) “Official
Body” will mean any government or political subdivision or any agency, authority, bureau, central bank, board, commission,
department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
(y) “Person”
will mean an individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization, or
a government or any agency or political subdivision thereof.
(z) “Shares”
will mean that as set forth in Section 4(a) hereof.
11. Construction.
Unless the context of this Note otherwise clearly requires, references to the plural includes the singular, the singular the plural,
the part the whole and “or” has the inclusive meaning represented by the phrase “and/or”. References in this
Note to “judgments” of the Lender include good faith estimates by the Lender (in the case of quantitative judgments) and
good faith beliefs by the Lender (in the case of qualitative judgments). The definition of any document or instrument includes all schedules,
attachments, and exhibits thereto and all renewals, extensions, supplements, restatements and amendments thereof. “Hereunder”,
“herein”, “hereto”, “hereof”, “this Note” and words of similar import refer to this entire
document; “including” is used by way of illustration and not by way of limitation, unless the context clearly indicates to
the contrary; and any action required to be taken by the Maker is to be taken promptly, unless the context clearly indicates to the contrary.
12. Duration;
Survival. All representations and warranties of the Maker contained in this Note or the Loan Documents will survive the making of
and will not be waived by the execution and delivery of this Note or the Loan Documents, by any investigation by the Lender, or by the
making of the Loans. Notwithstanding termination of this Note, all covenants and agreements of the Maker will continue in full force
and effect from and after the date of this Note until payment in full of this Note, interest thereon, and all fees and other obligations
of the Maker under this Note.
13. Miscellaneous.
(a) This
Note evidences the Loans and evidences all other amounts payable by the Maker hereunder.
(b) Except
as otherwise provided in this Note, whenever any payment or action to be made or taken under this Note is stated to be due on a day which
is not a Business Day, such payment or action will be made or taken on the next following Business Day and such extension of time will
be included in computing interest or fees, if any, in connection with such payment or action.
(c) The
Lender and the Maker may from time to time enter into agreements amending, modifying or supplementing this Note or changing the rights
of the Lender or of the Maker under this Note and the Lender may from time to time grant waivers or consent to a departure from the due
performance of the obligations of the Maker under this Note. Any such agreement, waiver or consent must be in writing and will be effective
only to the extent specifically set forth in such writing. An agreement to increase the Loan Amount stated herein may be made by a separate
written instrument or by an email exchange between the authorized representatives of the Lender and Maker who execute this Note if the
increased amount is specifically stated and is ten percent (10%) or less than the Loan Amount stated herein. In the case of any waiver
or consent relating to any provision of this Note, any failure to comply with any provision of this Note so waived or consented to will
be deemed to be cured and not continuing, but no such waiver or consent will extend to any other or subsequent failure to comply with
any provision of this Note or impair any right consequent thereto.
(d) This
Note may not be assigned or transferred by the Lender without the written consent of the Maker, which consent shall not be unreasonably
withheld, conditioned or delayed. This Note shall inure to the benefit of and be binding upon the parties hereto and their permitted
assigns.
(e) No
course of dealing and no delay or failure of Lender in exercising any right, power or privilege under this Note will affect any other
or further exercise thereof or exercise of any other right, power or privilege except as and to the extent that the assertion of any
such right, power or privilege will be barred by an applicable statute of limitations; nor will any single or partial exercise of any
such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any
further exercise thereof or of any other right, power or privilege. The rights and remedies of the Lender under this Note are cumulative
and not exclusive of any rights or remedies that the Lender would otherwise have.
(f) All
notices, requests, demands, directions and other communications (collectively “Notices”) under the provisions of this
Note must be in writing (including telexed or telecopied communication) unless otherwise expressly permitted under this Note and must
be sent by first-class or first-class express mail, private overnight or next Business Day courier or by telex or telecopy with confirmation
in writing mailed first class, in all cases with charges prepaid, and any such properly given Notice will be effective when received.
All Notices will be sent to the applicable party at the addresses stated below or in accordance with the last unrevoked written direction
from such party to the other parties.
|
Maker: |
KEYSTAR
CORP |
|
|
78
SW 7th Street, Suite 800 |
|
|
Miami,
FL 33130 |
|
|
Attention:
Chief Executive Officer |
|
|
|
|
|
|
and
copy to: |
Clark
Hill PLC |
|
|
|
14850
N, Scottsdale Road, Suite 500 |
|
|
|
Scottsdale,
Arizona 85254 |
|
|
|
Attention:
Daniel A. Schenck, Esquire |
|
|
|
|
|
Lender: |
EXCEL
FAMILY PARTNERS, LLLP |
|
|
1285
N. Palm Ave. |
|
|
Sarasota,
Florida 34236 |
|
|
Attention:
Bruce Cassidy |
|
|
|
|
|
|
and
copy to: |
Clark
Hill PLC |
|
|
|
One
Oxford Centre, 14th Floor |
|
|
|
Pittsburgh,
Pennsylvania 15219 |
|
|
|
Attention:
Jeffrey J. Conn, Esquire |
(g) The
provisions of this Note are intended to be severable. If any term or provision of this Note, or the application thereof to any Person
or circumstance, will to any extent be invalid or unenforceable, the remainder of this Note, or the application of such term or provision
to Persons or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each term
and provision of this Note will be valid and enforceable to the fullest extent permitted by Law.
(h) This
Note will be deemed to be a contract under the Laws of the State of Florida and for all purposes will be governed by and construed and
enforced in accordance with the substantive Laws, and not the laws of conflicts, of said State. The Maker consents to the exclusive jurisdiction
and venue of the federal and state courts located in Sarasota County, Florida, in any action on, relating to or mentioning this Note,
the other Loan Documents or any one or more of them.
(i) This
Note and the other Loan Documents supersede all prior understandings and agreements, whether written or oral, among the parties relating
to the transactions provided for in this Note and the other Loan Documents.
(j) This
Note may not be amended, modified or supplemented orally.
(k) This
obligation will bind the Maker and its successors and assigns, and the benefits hereof will inure to the Lender and its successors and
assigns, except that the Maker may not assign or transfer any of its rights under this Note.
(l) This
Note amends and restates that certain Fourth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note, dated September
14, 2023, issued by the Maker to the Lender in the original principal amount of Ten Million Dollars ($10,000,000.00) (the “Existing
Note”). This Note is issued in substitution for the Existing Note and is not a novation thereof. The Maker acknowledges and
agrees that (i) three (3) Loans were made under the Existing Note prior to the Closing Date in December 2023, specifically a Loan for
$655,000.00 on December 13, 2023, a Loan for $100,000.00 on December 21, 2023, and a Loan
for $380,000.00 on December 28, 2023 (such three (3) Loans are collectively referred to as, the “December 2023 Loans”),
(ii) excluding the principal and accrued interest of the December 2023 Loans, on December 28, 2023, the other Debt owed under the Existing
Note totaled TEN MILLION THREE HUNDRED SIXTY-SIX THOUSAND SIX HUNDRED FIFTY-TWO AND 74/100 DOLLARS ($10,366,652.74), (iii) pursuant to
multiple Conversion Notices received by the Maker from Lender (and from Lender’s eight (8) assignees for portions of the Debt)
on December 28, 2023, an aggregate amount of TEN MILLION THREE HUNDRED SIXTY-SIX THOUSAND SIX HUNDRED FIFTY-TWO AND 74/100 DOLLARS ($10,366,652.74)
of the Debt owed under the Existing Note was converted to fully paid and non-assessable shares of common stock of the Maker, pursuant
to Section 4(a) of the Existing Note, and (iv) no principal amount or accrued interest of any of the December 2023 Loans were converted
to equity of Maker on December 28, 2023, and, as of the Closing Date, each of the December 2023 Loans are deemed a Loan under this Note
and each are inscribed on Schedule 1 of this Note.
(m) WAIVER
OF TRIAL BY JURY. THE MAKER AND THE LENDER HEREBY EXPRESSLY, KNOWINGLY AND VOLUNTARILY WAIVE ALL BENEFIT AND ADVANTAGE OF ANY SUCH
RIGHT TO A TRIAL BY JURY, AND NEITHER WILL AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR
ADVANTAGE OF A TRIAL BY JURY IN ANY ACTION ARISING IN CONNECTION WITH THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS.
(n) DEMAND.
THE MAKER ACKNOWLEDGES THAT THE LOANS ARE PAYABLE ON DEMAND AND THAT NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS NOTE, NOTHING IN
THIS NOTE, INCLUDING WITHOUT LIMITATION THE ENUMERATION IN THIS NOTE OF SPECIFIC CONDITIONS OR COVENANTS RELATING TO THE LOANS, SHALL
BE CONSTRUED TO QUALIFY, DEFINE OR OTHERWISE LIMIT IN ANY WAY THE LENDER’S UNRESTRICTED RIGHT, POWER AND ABILITY, AT ANY TIME,
AND FROM TIME TO TIME, TO DEMAND THE PAYMENT OF THE AGGREGATE OUTSTANDING BALANCE OF, AND ALL ACCRUED INTEREST ON, THE LOANS, AND THE
MAKER AGREES THAT THE FAILURE TO COMPLY WITH ANY CONDITION, COVENANT OR OTHER PROVISION OF THIS NOTE IS NOT THE ONLY BASIS FOR A DEMAND
TO BE MADE BY THE LENDER FOR THE PAYMENT OF THE LOANS.
(o) FLORIDA
DOCUMENTARY STAMP TAX REQUIRED BY LAW HAS BEEN PAID OR WILL BE PAID DIRECTLY TO THE DEPARTMENT OF REVENUE. LENDER MAY PAY THE DOCUMENTARY
STAMP TAX AND ADD SUCH TAX PAYMENT AS A “Loan” UNDER THIS NOTE.
IN
WITNESS WHEREOF, the Maker has duly executed and delivered this Note on the day and year first above written.
|
MAKER: |
|
KEYSTAR
CORP, a Nevada corporation |
|
|
|
|
By: |
/s/
Walter Tabaschek |
|
|
Walter
Tabaschek, its Chief Financial Officer |
Acknowledged
and Agreed to: |
|
|
|
LENDER: |
|
|
|
EXCEL
FAMILY PARTNERS, LLLP, a Florida limited liability limited partnership |
|
|
|
|
By: |
Fortress
Holdings, LLC, its general partner |
|
|
|
|
By: |
/s/
Bruce A. Cassidy |
|
|
Bruce
A. Cassidy, its Manager |
|
{Signature
Page to
Fifth
Amended and Restated Convertible Discretionary Revolving Line of Credit Demand Note}
FIFTH
AMENDED AND RESTATED
DISCRETIONARY
CONVERTIBLE REVOLVING LINE OF CREDIT DEMAND NOTE
SCHEDULE
1
DATE |
REVOLVING
CREDIT LOANS |
DETAILS |
December
13, 2023 |
$655,000.00 |
Wire
Transfer |
December
21, 2023 |
$100,000.00 |
Wire
Transfer |
December
28, 2023 |
$380,000.00 |
Wire
Transfer |
TOTAL: |
$1,135,000.00 |
|
|
Ledger
acknowledged and confirmed by: |
|
KEYSTAR
CORP, |
|
a
Nevada corporation |
|
|
|
|
By: |
/s/
Walter Tabaschek |
|
|
Walter
Tabaschek, its Chief Financial Officer |
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