GBOE purchase agreement 8k.. Too thin to trade though imo.
Wednesday, November 16 2011 2:02 PM, EST GEOBIO ENERGY, INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Financial Statements and Exhibits Edgar Online "Glimpses"
Item 1.01 Entry Into a Material Definitive Agreement
On November 14, 2011 , GeoBio, Inc. , a Colorado corporation ("GeoBio"), entered into and closed an equity purchase agreement with El Gas North America, Inc. , a Washington limited liability company (" El Gas NA "), under which El Gas NA agrees to sell all (100%) of the issued and outstanding equity interests of El Gas NA to GeoBio in exchange for total consideration (the "Purchase Price") including:
(i) 2,500,000 shares of common stock of GeoBio (the "Acquisition Stock") to be issued into escrow within fourteen (14) days following the closing date of this Agreement, and which shall be released to El Gas NA upon the full payment of the Purchase Note (defined below);
(ii) $100,000.00 in the form of an 8% Promissory Note, due upon the earlier of (i) GeoBio's receipt of third-party financing (or, cumulatively, financings) of not less than $5,000,000.00 or (ii) one year from the date of the Closing (the "Maturity Date"), provided that El Gas NA has generated sufficient revenue during the year to GeoBio to repay the 8% Promissory Note, or that at such time as sufficient revenue has been made available to GeoBio (the "Acquisition Note");
(iii) GeoBio agrees to reimburse to El Gas NA all reasonable expenses that El Gas NA incurs ("Reimbursable Expenses") prior to El Gas NA achieving its first month of positive Earnings Before Income, Taxes, Depreciation and Amortization ("EBITDA"), such payment of the Reimbursable Expenses to occur upon the earlier of (a) a third-party financing (or, cumulatively, financings) of not less than $5,000,000.00 , (b) within six months following such time as of which fifty percent (50%) of the monthly EBITDA is sufficient to repay the Reimbursable Expenses or (c) one year from the date of the Closing; and
(iv) At the end of GeoBio's fiscal year for each of the first two years following the Closing, provided that the Agreement is not at such time terminated or otherwise unwound, the Board of Directors of GeoBio and of El Gas NA shall evaluate the value of the Acquisition Stock, and to the extent that the value of the Acquisition Stock is less than the value of the Acquisition Stock at the Closing (the "Baseline Value"), GeoBio shall issue to El Gas NA that amount of additional Acquisition Stock necessary to raise the total value of the Acquisition Stock to not less than its Baseline Value. In no event shall the Acquisition Stock be reduced.
Additionally, under the Agreement, GeoBio agreed to provide the principal of El Gas NA with a five-year employment contract to serve as President of El Gas NA at a pay rate of $8,000.00 per month ("Base Salary"), which shall be payable 50% by GeoBio and 50% by El Gas NA until the El Gas NA - generated revenue is sufficient to pay the entire monthly Base Salary (the "Employment Contract"). Additionally, for each full year that Employment Contract remains effective, GeoBio shall extend the term of the employment agreement by an additional year (for up to a maximum of ten years). The Employment Agreement shall provide severance benefits in the event of termination without cause consisting of not less than severance salary of not less one hundred percent (100%) of the Base Salary for the period of the Employment Contract. The Agreement requires the parties to agree upon and enter the Employment Contract within 30 days following the Closing.
The Closing occurred upon GeoBio's and El Gas NA's mutual execution of the Agreement. The Agreement is subject to termination in the event of material breach of the Agreement by either party including, but not limited to, GeoBio's failure to repay the Acquisition Note or the Reimbursable Expenses by the Maturity Date under the conditions set forth in the Agreement or failure of the parties agree upon the Employment Contract.
El Gas NA is a fully licensed and exclusive distributor of El Gas s.r.o's natural gas volume monitoring and correcting equipment and data recorder products in the territories including the United States , Canada , Mexico and the Caribbean Islands . El Gas s.r.o, licensor of El Gas NA , was founded in 1992 in Pardubice, Czech Republic . Electronic volume correctors facilitate proper natural gas measurement, data recording and billing, and are generally used by gas utility concerns, municipalities, natural gas producers, pipeline operators and some industrial concerns.
Sale of the products in the United States and Canada is subject to El Gas NA receiving UL approval and CSA approval, respectively, which applications are underway and which El Gas NA expects to receive by the close of January 2012 . El Gas NA's licensor, El Gas s.r.o, has APEX approval, the European equivalent required certification, on the products in Europe .
Item 2.01 Completion of Acquisition or Disposition of Assets
On November 14, 2011 , GeoBio completed the acquisition of El Gas NA , as set forth above. Upon the closing, GeoBio became obligated to issue 2,500,000 shares of common stock to the principals of El Gas NA , which GeoBio intends to issue in November 2011 , in exchange for 100% of El Gas NA's equity interests. Additionally, GeoBio paid to the principals of El Gas NA the Purchase Note and is required to complete the Employment Contract within 30 days and pay the Reimbursable Expenses within six months, as set forth in greater detail in Section 1.01 of this Form 8-K.
El Gas NA's primary asset is its exclusive distributer contract to distribute El Gas s.r.o's natural gas volume monitoring and correcting equipment and data recorder products in territories including the United States , Canada , Mexico and the Caribbean Islands .
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
EXHIBIT NUMBER DESCRIPTION LOCATION
10.38 El Gas North America, LLC
Equity Purchase Agreement Filed herewith
99.15 Press release issued November 16, 2011 Filed herewith
