Item 1.01. Entry into a Material Definitive Agreement
On December 31, 2019, Beyond Commerce, Inc., a Nevada corporation (the
"Company"), entered into a securities purchase agreement (the "Securities
Purchase Agreement") with TCA Special Situations Credit Strategies ICAV, an
Irish collective asset vehicle (the "Buyer" or "TCA ICAV"), and TCA Beyond
Commerce, LLC, a Wyoming limited liability company ("TCA Beyond Commerce"),
pursuant to which the Buyer purchased from the Company a senior secured
redeemable debenture having an initial principal amount of $900,000 and an
interest rate of 16% per annum (the "Initial Debenture"). The Initial Debenture,
and any future debentures that may be purchased by Buyer pursuant to the
Securities Purchase Agreement (the "Additional Debentures"), is secured through
an unconditional and continuing security interest in all of the assets and
properties, including after acquired assets, of the Company and each of its
subsidiaries, which are acting as guarantors with respect to the Company's
obligations under the Initial Debenture and any Additional Debentures, pursuant
to that certain Security Agreement, dated December 31, 2019, entered into by the
Company and TCA Beyond Commerce in favor of the Buyer (the "Security
Agreement").In addition, Geordan Pursglove, the Company's CEO, delivered a
personal guaranty with respect to the Company's obligations under the Securities
Purchase Agreement. Additional Debentures may be issued and funded, subject to
and upon the approval of the Company and the Buyer, provided that the total
value of the Initial Debenture and the Additional Debentures together shall not
exceed $5,000,000.
The Securities Purchase Agreement was entered into as part of a larger financing
transaction between the Company and the Buyer. As part of this financing
transaction, the Company and the Buyer formed TCA Beyond Commerce as a special
purpose vehicle to complete the Company's acquisition of Customer Centered
Strategies, L.L.C., a Minnesota limited liability company ("CCS"), while using
the funds generated through the Company's sale of the Initial Debenture. The
Company owns 80% of the outstanding common membership interests of TCA Beyond
Commerce (the "Common Units") and the Buyer owns 2,000 Common Units, comprising
the remaining 20% of the Common Units issued, as well as 100% of the 250,000
Series A Preferred Units issued and the sole Series B Preferred Unit issued
(which is the sole class of equity with voting rights). The Common Units and the
Series A Preferred Units are convertible into shares of the Company's common
stock at a 10% discount to the lowest closing bid price during the preceding 20
trading days and such equity will be redeemed pursuant to the Company's making
of installment payments, in accordance with the Operating Agreement of TCA
Beyond Commerce. The Company has pledged its interests in TCA Beyond Commerce to
TCA ICAV as security for the repayment of the Initial Debenture.
TCA Beyond Commerce entered into a Membership Interest Purchase Agreement (the
"Membership Interest Purchase Agreement"), whereby TCA Beyond Commerce acquired
100% of the authorized and issued membership interests of CCS from its sole
member (the "CCS Seller"). TCA Beyond Commerce acquired the membership interests
for a purchase price $525,000 (the "CCS Purchase Price"), with $175,000 to be
paid in cash and the remaining $350,000 to be paid through TCA Beyond Commerce's
issuance of a convertible promissory note with an original principal of $350,000
and a conversion feature that provides the CCS Seller with the right to convert
outstanding principal and accrued interest into shares of the Company's common
stock at a price based on the 10-day trailing average price of the Company's
stock (the "CCS Purchase Note").
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In addition to the CCS Purchase Price, the CCS Seller and Service 800, Inc., a
Minnesota corporation and subsidiary of the Company ("Service 800") entered into
an employment agreement whereby the CCS Seller will be employed by Service 800
as Vice President of Operations and Technologies for a period of six months
The foregoing descriptions of the Securities Purchase Agreement, Security
Agreement, Membership Interest Purchase Agreement, Operating Agreement, Initial
Debenture, and the CCS Purchase Note do not purport to be complete and are
qualified in their entirety by the full text of their forms, which are filed as
exhibits hereto and incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 3.02.
The issuance of the securities whose information is set forth in Item 1.01 and
this Item 3.02 of this Current Report on Form 8-K were not registered under the
Securities Act of 1933, as amended (the "Securities Act"), but qualified for
exemption under Section 4(a)(2) of the Securities Act. The securities were
exempt from registration under Section 4(a)(2) of the Securities Act because the
issuance of such securities by the Company did not involve a "public offering,"
as defined in Section 4(a)(2) of the Securities Act, due to the insubstantial
number of persons involved in the transaction, size of the offering, manner of
the offering and number of securities offered. All of the securities were issued
without registration under the Securities Act of 1933 in reliance upon the
exemption provided in Section 4(a)(2).
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Item 9.01. Exhibits.
(d) Exhibits
Exhibit No. Exhibit
4.1* Form of Senior Secured Debenture Dated December 31, 2019.
4.2* Form of Security Agreement
4.3* Form of TCA Beyond Commerce Convertible Promissory Note Dated
December 31, 2019
10.1* Form of Securities Purchase Agreement Dated December 31, 2019.
10.2* Form of Membership Interest Purchase Agreement dated December 31,
2019
10.3* Form of Limited Liability Company Agreement
* Filed herewith
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