BLACKSTAR ENTERPRISE GROUP, INC. Item 1.01 Entry into a Material Definitive Agreement
On
The Company executed the 10% convertible promissory note of the Company with
Holder, in the principal amount of
The Note, bearing an interest rate of 10%, dated
Clause breached if: Penalty:
The Company shall not deliver to the
day beginning on the 10th day.
The Company shall lose the "bid" price An increase of the outstanding principal for its stock and a market
amounts by 20%.
The Company shall have its Common Stock Outstanding principal due under this
delisted from an exchange or, if the Note shall increase by 50%.
Common Stock trades on an exchange, then
trading in the Common Stock shall be
suspended for more than 10 consecutive
days or ceases to file its 1934 act
reports with the SEC .
The Note is not paid at maturity. The outstanding principal balance under
the Note shall increase by 10%.
The Company shall not be "current" in Holder shall be entitled to use the
its filings with the SEC . lowest closing bid price during the
delinquency period as a base price for
the conversion.
Additionally, at Holder's election, if the Company fails for any reason to deliver to the Holder the conversion shares by the 3rd business day following the delivery of a Notice of Conversion to the Company and if the Holder incurs a Failure to Deliver Loss, then at any time the Holder may provide the Company written notice indicating the amounts payable to the Holder in respect of the Failure to Deliver Loss and the Company must make the Holder whole as follows: Failure to Deliver Loss = [(Highest VWAP price for the 30 trading days on or after the day of exercise) x (Number of conversion shares)]. The Company must pay the Failure to Deliver Loss by cash payment, and any such cash payment must be made by the third (3rd) business day from the time of the Holder's written notice to the Company.
The Company may prepay the Note in whole or in part at any time, up to 180 days after funding, by paying the principal amount to be prepaid together with premium interest thereon to the date of prepayment (120% within 60 days; 130% 61-120 days; 140% 121-180 days). After 180 days, Company may not prepay any amount.
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The Holder shall not be entitled to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of the Company (which may be increased up to 9.9% upon 60 days' prior written notice by the Holder).
Additionally, the Company has issued 2,666,666 returnable shares to Holder. In the event that, upon the 6th monthly anniversary of the Issuance Date of the Note, the Company has not effected a resale registration statement under which no less than 13,000,000 shares of Common Stock have been registered for conversion of the Note or if, on the 6th monthly anniversary of the Issuance Date there is an outstanding balance on the Note, then the Note shall be convertible into shares of Common Stock at the closing bid price of the Common Stock for the trading day ending immediately prior to the date of a delivery of a Notice of Conversion, the outstanding principal balance shall be increased by fifteen percent (15%), and the Holder shall retain the 2,666,666 shares.
Securities Purchase Agreements:
The Company and the Holder executed the Securities Purchase Agreement ("SPA") in
accordance with and in reliance upon the exemption from securities registration
for offers and sales to accredited investors afforded, inter alia, by Rule 506
under Regulation D as promulgated by the
Transfer Agent Instruction Letters:
Until the Company's obligations under the Notes is paid and performed in full, the Transfer Agent of the Company is authorized to establish a reserve of shares of authorized but unissued Common Stock of the Company in an amount not less than 44,000,000 shares for issuance upon partial or full conversion of the Note, in accordance with the terms thereof, and the Transfer Agent shall immediately add shares of Common Stock to the reserved shares as and when requested by Company or Holder in writing from time to time, so long as there are sufficient authorized and unissued shares of the Company not otherwise reserved available to do so.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
See the disclosures under Item 1.01 of this Current Report on Form 8-K, incorporated herein by this reference.
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Item 3.02 Unregistered Sales of
The Company and the Holder executed the Securities Purchase Agreement ("SPA") in
accordance with and in reliance upon the exemption from securities registration
for offers and sales to accredited investors afforded, inter alia, by Rule 506
under Regulation D as promulgated by the
See the disclosures under Item 1.01 of this Current Report on Form 8-K, incorporated herein by this reference.
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