Plenty of that sour yogurt to go around
20-Feb-2014
Unregistered Sale of Equity Securities, Amendments to Articles of Inc. o
Item 3.02 Unregistered Sales of Equity Securities
On February 18, 2014, Be Active Holdings, Inc. (the "Company") sold an aggregate of 33,333,332 shares of common stock, par value $0.0001 per share (the "Common Stock"), 26,666,667 shares of Series C Convertible Preferred Stock, par value $0.0001 per share (the "Series C Preferred Stock" and, collectively with the shares of Common Stock sold, the "Shares") and five year warrants to purchase up to an aggregate of 59,999,999 shares of Common Stock at an exercise price of $0.03 per share (the "Warrants") with gross proceeds to the Company of $1,799,999.99 (the "Offering") to certain accredited investors (the "Investors") pursuant to a subscription agreement (the "Subscription Agreement"). Each Share was sold for a purchase price of $0.03 per Share. Investors who would, as a result of the purchase of shares of Common Stock, hold in excess of 5% of the Company's issued and outstanding Common Stock, were afforded the opportunity to elect to receive shares of Series C Preferred Stock. Until the earlier of (i) three years from the closing of the Offering or (ii) such time as no Investor holds any Shares, Warrants, or shares of Common Stock underlying Warrants or underlying the Series C Preferred Stock, in the event the Company issues or sells Common Stock or Common Stock equivalents at a per share price equal to less than $0.03 per share, as adjusted, the Company has agreed to issue additional Shares such that the aggregate purchase price paid by such Investor shall equal such lower price issuance, subject to certain customary exceptions.
Each share of Series C Preferred Stock is convertible, at the option of the holder at any time, into one share of Common Stock and has a stated value of $0.0001 per share. The conversion ratio of the Series C Preferred Stock is subject to adjustment in the case of stock splits, stock dividends, combination of shares and similar recapitalization transactions. The Company is prohibited from effecting the conversion of the Series C Preferred Stock to the extent that as a result of such conversion, the holder would beneficially own more than 9.99%, in the aggregate, of the issued and outstanding shares of Common Stock calculated immediately after giving effect to the issuance of shares of Common Stock upon the conversion of the Series C Preferred Stock. Holders of the Series C Preferred Stock are entitled to vote on all matters submitted to the Company's stockholders and are entitled to such number of votes as is equal to the number of shares of Common Stock into which such shares of Series C Preferred Stock are convertible, subject to the governing beneficial ownership limitations discussed in the preceding sentence.
The Warrants are exercisable for a period of five years from the date of issuance and have an exercise price of $0.03 per share, subject to adjustment upon the occurrence of certain events such as lower priced issuances, stock splits and dividends.
The Warrants contain anti-dilution protection for as long as such Warrant is outstanding, such that (other than customary exceptions) if the Company issues securities for consideration less than the Exercise Price, then the Exercise Price shall be reduced to such lower price and the number of shares issuable upon exercise of the Warrant shall be increased such that the aggregate exercise price payable under the Warrant, after taking into account the decrease in the exercise price, shall be equal to the exercise price prior to such adjustment.
If at any time there is no effective registration statement registering, or no current prospectus available for, the resale of the shares of Common Stock underlying the Warrant, then the holder of such Warrant has the right to exercise the Warrant by means of a cashless exercise. The Company is prohibited from effecting the exercise of the Warrants to the extent that, as a result of such exercise, the holder beneficially owns more than 9.99%, in the aggregate, of the issued and outstanding shares of Common Stock calculated immediately after giving effect to the issuance of shares of Common Stock upon the exercise of the Warrants.
In connection with the Offering, the Company granted the Investors "piggy-back" registration rights. Additionally, Investors in the Offering are entitled to a right of participation in future financings conducted by the Company for a period of 24 months.
The Company paid placement agent fees of $143,999.99 in cash and issued a warrant to purchase up to 4,799,999 shares of Common Stock to a broker-dealer in connection with the sale of the Shares and the Warrants. The warrant issued to the broker dealer contains substantially the same terms as the Warrants issued to the Investors in the Offering. The Company permitted the conversion of an aggregate of $13,500 of unpaid fees owed to a consultant into Shares and Warrants at the per Share offering price.
