UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 1-U
Current Report Pursuant to Regulation A
Date of Report: April 16, 2019
(Date of earliest event reported)
SlideBelts, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 46-3346479 |
| (State or other incorporation) | (I.R.S. Employer Identification No.) |
5272 Robert J Matthews Pkwy
El Dorado Hills, CA 95762
(Full mailing address of principal executive offices)
+1 (888) 754-3311
(Issuer’s telephone number, including area code)
Class A Common Stock
(Title of each class of securities issued pursuant to Regulation A)
Item 8. Certain Unregistered Sales of Equity Securities
On April 11, 2019, SlideBelts, Inc. (the “Company”) entered into an agreement to sell 12,871,000 shares of its Class C Common Stock (the “Shares”) to Alex Chnaiderman for total proceeds of $1,100,000 pursuant to a securities purchase agreement (the “SPA”), representing approximately $0.085463 per share. The SPA is attached hereto as Exhibit 6.17. The Company’s sale of the Shares will be made in reliance upon the exemption from securities registration afforded by the provisions of Rule 506(c) of Regulation D of the Securities Act of 1933, as amended (the “Act”). As of the date of this 1-U, Mr. Chnaiderman is a Director of the Company.
Pursuant to the terms of the SPA, Mr. Chnaiderman was granted approval rights for certain actions by the Company, including, (i) any material changes to the Company’s marketing or advertising plans, (ii) any indebtedness to be incurred by the Company other than to vendors in the ordinary course of business, (iii) any new hires, other than replacements, (iv) any purchases by the Company in excess of $150,000, (v) any plans to develop new products, (vi) the adoption of budgets, and (vii) any material changes to a budget that has already been adopted.. In addition, the Company was granted a redemption right for the Shares until March 31, 2024, until which the Company may repurchase all or any part of the Shares from Mr. Chnaiderman for $0.1194 per share. This right is held by the Company; Mr. Chnaiderman may not demand redemption of the Shares.
The foregoing summary of the SPA does not purport to be complete, and is qualified in its entirety by reference to the full text of the SPA substantially in the form filed as Exhibit 6.17 hereto.
Management of the Company believes this investment is in the best interest of the Company. Mr. Chnaiderman is a seasoned entrepreneur and his additional involvement in the strategy and operations of the Company beyond his role as a Director will bring added value to the Company.
Further, the sale of our Class C Common Stock does not impact the ongoing offering of our Class A Common Stock under Regulation A. We will reflect the creation and sale of our Class C Common Stock and additional services to be provided by Mr. Chnaiderman is a supplement to our ongoing offering under Regulation A.
Item 9. Other Events
On April 8, 2019, the Company’s Board of Directors and sole voting stockholder authorized a Certificate of Amendment of its Amended and Restated Certificate of Incorporation, attached hereto as Exhibit 2.4 (the “Certificate of Amendment”) in order to effect the sale of Shares to Mr. Chnaiderman referenced above. The Company received confirmation from the office of the Secretary of State of the State of Delaware that the Certificate of Amendment had been accepted by such office for filing as of April 12, 2019. The Certificate of Amendment increased the authorized shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) to 121,500,000, and designated 20,000,000 shares of the Common Stock as a new series of Common Stock - Class C Common Stock. The Class C Common Stock is identical to the Class A Common Stock, other than the fact that it is entitled to a preferred dividend over the Class A Common Stock and Class B Common Stock that is payable only out of surplus or net profits of the Company.
The foregoing summary of the Certificate of Amendment does not purport to be complete, and is qualified in its entirety by reference to the full text of the Certificate of Amendment substantially in the form filed as Exhibit 2.4 hereto.
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SlideBelts, Inc. | ||
| By | /s/ Brig Taylor | |
| Brig Taylor, Chief Executive Officer | ||
| SlideBelts, Inc. | ||
| Date: | April 16, 2019 | |
Exhibit Index
| Exhibit No. | Description | |
| 2.4 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of SlideBelts, Inc., dated April 8, 2019 | |
| 6.17 | Form of Class C Stock Purchase Agreement dated April 8, 2019 |
Exhibit 2.4
Alexandre Chnaiderman
5272 Robert J Mathews Pkwy
El Dorado Hills, CA 95762
April 8, 2019
Brig Taylor, CEO
SlideBelts Inc.
5272 Robert J Mathews Pkwy
El Dorado Hills, CA 95762
| Re: | Investment in Class C Common Stock |
Dear Brig:
This will confirm my agreement to purchase a total of 12,871,000 shares of the Class C Common Stock (the “Shares”) of SlideBelts Inc. (the “Corporation”) for $1,100,000, in accordance with the Schedule attached.
The Corporation and I hereby agree as follows:
1) The rights, preferences and limitations of the Shares shall be as set forth in the attached Certificate of Amendment of Certificate of Incorporation.
2) I am purchasing the Shares for investment purposes only and not with a view toward resale or distribution.
3) I am purchasing the Shares on my own behalf, not on behalf of any other person.
4) For as long as I own at least half the Shares, my consent shall be required for (i) any material changes to the Corporation’s marketing or advertising plans, (ii) any indebtedness to be incurred by the Corporation other than to vendors in the ordinary course of business, (iii) any new hires, other than replacements, (iv) any purchases by the Corporation in excess of $150,000, (v) any plans to develop new products, (vi) the adoption of budgets, and (vii) any material changes to a budget that has already been adopted. I will review and respond promptly to any proposals made by the Corporation with regard to these matters, and the absence of a response within five business days shall be deemed approval by me of any requested action or decision.
5) The Corporation will reimburse the cost of transportation and lodging for a visit to the office of the Corporation sometime within the next six months.
6) The Corporation, or person designated by the Corporation, may purchase all or any part of the Shares at any time on or before March 31, 2024 for $0.1194 per share, representing 140% of the purchase price.
7) I may not transfer any of the Shares without the consent of the Corporation, which shall not be unreasonably withheld. However, the rights described in paragraph 4 may not be transferred.
This letter agreement will be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts between residents of that State and executed in and to be performed entirely within that State, and without giving effect to such State’s conflicts of law provisions. Each party hereto irrevocably consents to the exclusive jurisdiction and venue of the federal and state courts located in the State of Delaware, County of New Castle. Each of the parties expressly and irrevocably agrees to waive any right her or it may have to a jury trial.
| Very truly yours, | |
| /s/ Alexandre Chnaiderman | |
| Alexandre Chnaiderman |
AGREED TO AND ACCEPTED BY:
| SLIDEBELTS INC. | ||
| By | /s/ Brig Taylor | |
| Brig Taylor, CEO | ||
PURCHASE SCHEDULE
of Class C Common Stock of SlideBelts Inc.
| On or Before | Payment | Shares Issued |
| Date | ||
| TOTAL | $1,100,000 | 12,871,000 |
Exhibit 6.17
SlideBelts Inc.
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
SlideBelts Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:
1. This Certificate of Amendment amends the provisions of the Corporation’s Amended and Restated Certificate of Incorporation filed with the Secretary of State on January 30, 2017 (the “Certificate of Incorporation”).
2. Article FOURTH of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:
FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is 121,500,000 shares of Common Stock, $0.001 par value per share (“Common Stock”), of which 20,000,000 are designated as Class C Common Stock (“Class C Common Stock”), 1,500,000 are designated as Class B Common Stock (“Class B Common Stock”), and 100,000,000 are designated as Class A Common Stock (“Class A Common Stock” and, together with the Class C Common Stock and Class B Common Stock, the “Common Stock”). The rights, preferences, powers, privileges, and the restrictions, qualifications and limitations of the Class A Common Stock, the Class B Voting Common Stock, and the Class C Common Stock are identical other than in respect of voting and conversion rights and a special dividend preference set forth in paragraphs (a), (c) and (d) of this Article FOURTH, and for all other purposes under this Certificate of Incorporation, including without limitation, dividends, liquidation, stock splits, subdivisions, combinations and the like, the Class C Common Stock, Class B Common Stock and Class A Common Stock shall together constitute a single class of shares of the capital stock of the Corporation.
(a) Voting Rights of Common Stock.
i. Except as otherwise provided herein or by applicable law, the holders of shares of Common Stock shall at all times vote together as one class on all matters (including the election of directors) submitted to a vote or for the consent of the stockholders of the Corporation.
ii. Each holder of shares of Class B Common Stock shall be entitled to one (1) vote for each share of Class B Common Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation.
iii. Except as otherwise required by applicable law, shares of Class A Common Stock and shares of Class C Common Stock shall have no voting power and the holders thereof, as such, shall not be entitled to vote on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation.
(b) Equal Status. Except as expressly provided in this Article FOURTH, Class A Common Stock, Class B Common Stock and Class C Common Stock shall have the same rights and privileges and rank equally, share ratably and be identical in all respects as to all matters. Without limiting the generality of the foregoing, (i) in the event of a merger, consolidation or other business combination of the Corporation requiring the approval of the holders of the Corporation’s capital stock entitled to vote thereon (whether or not the Corporation is the surviving entity), the holders of the Common Stock shall receive the same amount and form of consideration, if any, on a per share basis as the consideration, if any, received by holders of any other class of Common Stock in connection with such merger, consolidation or combination (provided that if holders of Class B Common Stock are entitled to make an election as to the amount or form of consideration such holders shall receive in any such merger, consolidation or combination with respect to their shares of Class B Common Stock, the holders of Class A Common Stock and Class C Common Stock shall be entitled to make the same election as to their shares of Class A Common Stock), and (ii) in the event of (x) any tender or exchange offer to acquire any shares of Common Stock by any third party pursuant to an agreement to which the Corporation is a party or (y) any tender or exchange offer by the Corporation to acquire any shares of Common Stock, pursuant to the terms of the applicable tender or exchange offer, the holders of the Class A Common Stock and Class C Common Stock shall receive the same amount and form of consideration on a per share basis as the holders of the Class B Common Stock (provided that if holders of Class B Common Stock are entitled to make an election as to the amount or form of consideration such holders shall receive in any such tender or exchange offer with respect to their shares of Class B Common Stock, the holders of Class A Common Stock and Class C Common Stock shall be entitled to make the same election as to their shares of Class A Common Stock).
(c) Conversion of Class B Common Stock.
i. Voluntary Conversion. The shares of Class B Common Stock shall be convertible into shares of Class A Common Stock on a one-to-one basis at any time and from time to time at the option of the holder. Any such conversion shall be effected by the surrender to the Corporation of the certificate or certificates representing the Class B Common Stock, together with written notice by the holder of such Class B Common Stock, stating that such holder desires to convert the shares of Class B Common Stock, or a stated number of such shares represented by such certificate or certificates, into an equal number of shares of the Class A Common Stock. Such notice shall also state the name or names (with addresses) and denominations in which the certificate or certificates for shares of Class A Common Stock are to be issued and shall include instructions for the delivery thereof. The Corporation shall promptly upon receipt of such notice and certificates, issue and deliver in accordance with the surrendering holder’s instructions the certificate or certificates evidencing the shares of Class A Common Stock issuable upon such conversion, and the Corporation will deliver to the converting holder a certificate representing any Class B Common Stock shares which were represented by the certificate or certificates delivered to the Corporation in connection with such conversion that were not converted. Such conversion, to the extent permitted by law, shall be deemed to have been effected as of the close of business on the date on which such surrendered certificate or certificates shall have been received by the Corporation.
ii. Mandatory Conversion. Upon a transfer by any holder of any issued and outstanding shares of Class B Common Stock, by operation of law or otherwise, to a person other than pursuant to a Permitted Transfer (as defined below) the shares of Class B Common Stock so transferred shall automatically, without any action on part of the transferor, the transferee or the Corporation, be converted into an equal number of shares of Class A Common Stock upon the consummation of such transfer. “Permitted Transfer” means a transfer of Class B Common Stock (a) voluntarily by the transferor to any trust, limited liability company, limited partnership or other entity having as its sole beneficiaries or owners such transferor, any spouse, parent, sibling, child or grandchild of such transferor or any combination of the foregoing, so long as such trust, limited liability company, limited partnership or other entity is controlled by such transferor (b) to a trust for the benefit of the holder or any member of the holder’s immediate family for estate planning purposes only, or (c) by will or intestacy. Upon surrender of the certificate or certificates representing the shares so transferred and converted the Corporation shall issue and deliver in accordance with the surrendering holder’s instructions the certificate or certificates representing the shares of Class A Common Stock into which such transferred shares of Class B Common Stock have been converted.
iii. Effect of Conversion. Any shares of Class B Common Stock converted pursuant to Section (c) of this Article FOURTH shall be retired and cancelled and may not be reissued as shares of such class, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Class B Common Stock accordingly.
(d) The holders of Class C Common Stock shall be entitled each year to a preferred dividend, in the amount set forth below, provided, however, that such dividend shall be payable only out of surplus or net profits as provided in Delaware General Corporation Law Section 170(a). Such dividend may be paid in equal quarterly installments. The dividend for each year (beginning with 2020) shall be an amount, per share, calculated as (i) 2.5% of the Corporation’s Gross Profit for the preceding fiscal year, divided by (ii) 12,871,000. Gross Profit for purposes of this paragraph shall mean for any period Net Sales less Cost of Sales for such period, as those terms are applied in Generally Accepted Accounting Principles and S.E.C. Regulation S-X, and shall be determined by the Corporation’s regular accountant, whose determination of Gross Profit shall, in the absence of any judicial finding of fraud, be conclusive and final. No dividends on any share of Class A Common Stock or Class B Common Stock shall be paid unless the preferred dividend payable on Class C Common Stock shall have been paid in full through such date. If any such preferred dividend Class C Common Stock dividend shall not be paid due to insufficiency of surplus or net profits, any such unpaid amount shall be accumulated and paid, prior to any other dividends on Common Stock, in the first year thereafter in which the Corporation shall have surplus or net profits. After the payment of the Class C Common Stock preferred dividend, any further dividend on Common Stock shall be declared and paid equally on each share of Common Stock, regardless of Class.
3. These amendments were duly adopted in accordance with the provisions of section 242 of the DGCL.
4. All other provisions of the Certificate of Incorporation shall remain in full force and effect.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by Brig Taylor, its Chief Executive Officer, on April 8, 2019.
| /s/ Brig Taylor | |
| Brig Taylor, Chief Executive Officer |