Item 2. Unregistered Sales of Equity Securities
Item
2
Unregistered Sales of Equity Securities and Use of Proceeds
On August 16, 2018, we issued 150,428 shares of our common
stock to Qualified Development & Management, LLC pursuant to the Brown
Settlement Agreement (as defined below).
On October 31, 2017, our company, Lifewater Industries, LLC,
Wright Investment Group, LLC, Richard A. Wright, our president, chief executive
officer and director, David Guarino, our chief financial officer, secretary,
treasurer and director, entered into a Settlement Agreement and Mutual Release
of Claims (the Brown Settlement Agreement ) with Chris Brown and
McDowell 78, LLC.
Chris Brown and McDowell 78, LLC alleged multiple claims and
allegations for breaches of various oral promises during the past five years
against our company, Steve Nickolas, the Nickolas Family Trust, Richard A.
Wright, Wright Investment Group, LLC, Lifewater Industries, LLC and WiN
Investments, LLC.
The Brown Settlement Agreement provides, among other things,
the following:
1.
As soon as commercially practicable after the full
execution of the Brown Settlement Agreement and for no additional
consideration, we agreed to issue 150,428 shares of our common stock to
McDowell 78, LLCs designee, Qualified Development & Management, LLC;
and
2.
The parties also agreed to mutual release of
claims.
Lifewater Industries, LLC, WiN Investments, LLC and Wright
Investment Group, LLC are entities controlled by Richard A. Wright.
We issued 150,428 shares of our common stock to Qualified
Development & Management, LLC relying on the registration exemption provided
for in Section 4(a)(2) of the Securities Act of 1933.
In connection with the private placement completed on September
27, 2018, we paid issued 66,210 finders warrants. Each finders warrant
entitles the holder thereof to purchase one additional share of our common stock
at a price of CDN$2.90 per share for a period of two years. These finders
warrants were issued to 2 non-U.S. persons (as that term is defined in
Regulation S of the Securities Act of 1933, as amended) in an offshore
transaction relying on Regulation S and/or Section 4(a)(2) of the Securities Act
of 1933, as amended.
Item
3
Defaults Upon Senior Securities
None.
Item
4
Mine Safety Disclosures
Not applicable.
18
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