Interesting Filing 8k
Sub-Urban Brands, Inc.: 8-K, Sub-Doc 1, Page 2
Item 1.01
Entry into a Material Definitive Agreement
Item 2.03
Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
Item 3.02
Unregistered Sales of Equity Securities
From August 28, 2006 to September 18, 2006, to obtain funding for working capital, Sub-Urban Brands, Inc. (the “Company”) entered into securities purchase agreements (the “Agreement”) with accredited investors (the “Investors”) for the sale of $300,000 in the principal amount of 10% Subordinated Promissory Note (the “Note”) and 373,500 common stock purchase warrants (“Warrants”) exercisable at $0.40. The Warrants are exercisable for a period of three years from the date of execution. The investors may exercise the Warrants on a cashless basis within one year from the original issue date if the shares underlying the Warrants are not then registered. The investors have agreed to restrict their ability to exercise their Warrants and receive shares of our common stock such that the number of shares of common stock held by them and their affiliates in the aggregate after such exercise does not exceed 9.99% of the then issued and outstanding shares of common stock.
Closings under the Agreement took place as follows: (i) $125,000 on August 23, 2006 (ii) $75,000.00 on September 1, 2006, and (iii) $100,000 on September 18, 2006.
The Notes bear interest at 10% and mature January 2, 2007. At maturity, the Company will pay a fixed bridge fee of 15% of the face value of the note in addition to interest due. The full principal amount of the Notes is due upon default under the terms of Notes.
The Investors will receive “piggyback” registration rights for the shares of Common Stock underlying the Warrants in connection with any registration statement filed by the Company.
In connection with the offering, the Company paid a placement fee of $12,500 issued warrants to purchase an aggregate of 15,625 shares of common stock on the same terms and conditions as the investors.
The securities were offered and sold to the Investors in a private placement transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933 and Rule 506 promulgated thereunder. The Investors are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933.
In the period August 16, 2006 through August 31, 2006 the company issued 153,724 shares of its Common Stock in exchange for the conversion of $38,431 of outstanding convertible notes payable including accrued interest of $5,431. The notes and accrued interest converted at $0.25 per in accordance with the terms of the convertible notes.
Item 5.02
Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
Effective October 5, 2006, the Company announced the resignation of Meredith Feldman as President of the Company. Joe Shortal, Chief Executive Officer of the Company, will assume the duties of President. There was no disagreement or dispute between Ms. Feldman and the Company which led to her resignation.
AI
