On October 13, 2014, iHookup Social, Inc. (the “Company”) received notice from OTC Markets Group that the Company will be delisted from OTCQB and moved to OTC Pink Sheets on October 14, 2014. On May 1, 2014, OTCQB implemented new eligibility standards for OTCQB which requires companies to maintain a closing bid price of $0.01 per share on at least one of the prior 30 consecutive calendar days. We believe that, among other reasons, due to the conversion of previously issued convertible notes into the Company’s common stock and the sale of such common stock, the closing bid price of the Company’s common stock has fallen below $0.01 for 30 consecutive calendar days from September 11, 2014.
In order to regain OTCQB eligibility, the Company intends to execute a reverse stock split and submit an application for re-listing on OTCQB as soon as reasonably practicable. The Company has also engaged the investor relation firm, Viral Network Inc. (“Megacast”) to assist in communications with investors, potential investors and other participants in the stock markets, and will soon engage Integrative Business Alliance LLC (“IBA”) for the same purpose.
Item 9.01 Financial Statements and Exhibits.
None.
Interesting how you admit these filings, the ones that really count, not their own PR's and "forward looking statements." That said, PR's and gaining market share are keys to surviving long enough to get bought out for their subscriber base.
Many dumped b/c often this sort of P&D precedes the reverse split which means their investment will likely emerge very negligible. The 2nd R/S in 6 months from this company b/c promises that the one in April would keep them in the QB didn't pan out, largely b/c as they admit, their own toxic financiers dumped, converted their shares at preferred rights, right away...is how they themselves seem to explain the crash in price.
It's possible the company won't carry out the R/S if price CLOSES above a penny very soon, but it's not clear if closing just one day/month now that company already has been delisted to Pinks, is enough to get it back to QB. But it's a crapshoot now.
They keep loading company with debt to the tune of $3.4MIL/ year largely for their own salaries/ perk/ reimbursing their other company Checkmate Mobile with interest for the underlying software... then they have to make deals like this to survive? To get a mere $43,000 heavily favoring the financiers?
From the PRER14-C filed March 14th: Dean Rositano has an identical deal and there are other 6-figure management deals as well:
Employment Agreements
Robert Rositano
Effective January 19, 2014, iHookup, a wholly-owned subsidiary of the Company, entered into an employment agreement with Robert Rositano to serve as Chief Executive Officer and Secretary of iHookup for a term of two years with automatic renewals for similar two year periods pursuant to the terms of the agreement. Robert Rositano’s duties shall include the duties and responsibilities for the Company’s corporate and administration offices and positions as set forth by the Company and such other duties and responsibilities as the board of directors may from time to time reasonably assign to Robert Rositano.
The employment agreement provides, among other things, that Robert Rositano will be eligible for participation in any employee benefit plan, retirement plan, and option plan maintained by iHookup; receive a base salary of $150,000 per year; and receive reimbursement for ordinary and necessary business expenses incurred by Robert Rositano in connection with the performance of his duties as Chief Executive Officer and Secretary.
Upon a successful launch of iHookup’s products and services and reaching the first 1,000,000 registered users, Robert Rositano will receive a bonus of $50,000 and his base salary will be increased to $200,000 annually.
When iHookup reaches a cumulative 5,000,000 registered users or more, Robert Rositano will receive a bonus of $75,000 and his base salary will be increased to $250,000 annually. After the above goals are achieved, his base salary will begin being increased semi-annually at a minimum rate of 10% or higher, as determined by the board of directors or a committee established by the board of directors for compensation purposes.
-- The Board of Directors being of course...themselves.
Item 1.01 Entry into a Material Definitive Agreement.
As of October 14, 2014, and with a closing date of October 15, 2014, the Company entered into a securities purchase agreement with KBM Worldwide Inc. ( “KBM” ), pursuant to which the Company sold to KBM a $43,000 face value 8% Convertible Note (the “KBM Note”) with a term of nine months (the “KBM Maturity Date” ). Interest accrues daily on the outstanding principal amount of the KBM Note at a rate per annual equal to 8% on the basis of a 365-day year.
The principal amount of the note and interest is payable on the KBM Maturity Date. The note is convertible into common stock beginning six months after the issue date (the “Issue date” ), at the holder’s option, at a 45% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 110% if prepaid during the period commencing on the Issue Date through 30 days thereafter, (ii) 115% if prepaid 31 days following the closing through 60 days following the Issue Date, (iii) 120% if prepaid 61 days following the closing through 90 days following the Issue Date, (iv) 125% if prepaid 91 days following the Issue Date through 120 days following the Issue Date, and (v) 135% if prepaid 121 days following the Issue Date through the 180 days following the Issue Date. The Company may not prepay the note after the 180 th day following the Issue Date. In the event of default, the amount of principal and interest not paid when due bear default interest at the rate of 22% per annum and the note becomes immediately due and payable. Should that occur the Company is liable to pay the holder 150% of the then outstanding principal and interest. KBM does not have the right to convert the Note, to the extent that KBM and its affiliates would beneficially own in excess of 4.99% of our outstanding common stock. KBM has a right of first refusal to participate in future financings below $45,000 for a period of 12 months. The Company paid KBM $3,000 for its legal fees and expenses.
The agreements described above are in substantially similar form as prior financing agreements the Company has on file with the SEC.
Item 3.02 Unregistered Sales of Equity Securities.
See the disclosure under Item 1.01 of this current report on Form 8-K.
-- They've already got Beaufort, Asher in similar deals. -- At least these financiers have to wait 6 mos. to convert at a 45% discount, certain conditions applying...
There are so many filings it's hard to keep up, they must keep FINRA and the SEC busy. COULD THEY have been diluting, exercising the A/S of 20BIL they filed for at the time of the April R/S? Who knows til disclosures come out months later maybe.
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