UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 13, 2015
REDHAWK HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
000-54323
(Commission file number)
20-3866475
(I.R.S. Employer Identification No.)
219 Chemin Metairie Road, Youngsville, La 70592
(Address of principal executive offices)(Zip Code)
(337) 269-5933
(Company's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On November 12, 2015, pursuant to a certificate of designation filed with the Nevada Secretary of State, we designated 2,000 shares of our authorized preferred stock as Series A 5% Convertible Preferred Stock (the “Series A Preferred”). The holders of the Series A Preferred are entitled to receive cumulative dividends at a rate of 5% per annum, payable quarterly in cash, or at the Company’s option, such dividends shall be accreted to, and increase, the stated value of the issued Series A Preferred (“PIK”). Holders of the Series A Preferred are entitled to votes on all matters submitted to stockholders at a rate of ten votes for each share of common stock into which the Series A Preferred may be converted. After six months from issue, each share of Series A Preferred is convertible, at the option of the holder, into the number of shares of common stock equal to the quotient of the stated value, as adjusted for PIK dividends, by $0.015, as adjusted for stock splits and dividends.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On November 13, 2015, we acquired certain commercial real estate from a related party for $480,000 consisting of $75,000 in land costs and $405,000 in buildings and improvements. Please see “Part II – Other Information, Item 5. Other Information” for a more detailed description of the commercial real estate acquisition. On November 13, 2015, we acquired certain commercial real estate from a Beechwood Properties, LLC (“Beechwood”), an entity controlled by G. Darcy Klug, our Chief Financial Officer, for $480,000 consisting of $75,000 in land costs and $405,000 in buildings and improvements. The purchase price was paid by the Company assuming $265,000 of long-term bank indebtedness (“Note”) plus the issuance of 215 shares of the Company’s newly designated Series A Preferred. The Series A Preferred were issued in reliance upon on an exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The purchase price of the property was determined by independent third party appraisers commissioned by the financial institution providing the long-term financing for the acquisition, plus the cost of specific security improvements requested by the lessee.
The Note is dated November 13, 2015, in the amount of $265,000. Monthly payments under the Note are $1,962 including interest accruing at a rate of 5.95% per annum. The Note matures in June 2021 and is secured by the commercial real estate, guarantees by the Company and its real estate subsidiary and the personal guarantee of G. Darcy Klug, the Company’s Chief Financial Officer.
Item 2.02. Results of Operations and Financial Condition.
On November 19, 2015, we issued a press release announcing our results of operations for the quarter ended September 30, 2015. A copy of the press release is attached hereto as Exhibit 99.1. The information in the press release shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act, except as expressly set forth by specific reference in such a filing.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Effective November 13, 2015, we entered into a $100,000 Commercial Note Line of Credit (“Line of Credit”) with a related party to evidence prior indebtedness and provide for future borrowings. Please see “Part II – Other Information, Item 5. Other Information” for a description of the terms and conditions of the Line of Credit. Effective November 13, 2015, we entered into a $100,000 Line of Credit with Beechwood to evidence prior indebtedness and provide for future borrowings. The Line of Credit accrues interest at 5% per annum and matures on October 31, 2016. At maturity or in connection with a pre-payment, subject to the conditions set forth in the Line of Credit, Beechwood has the right to convert the amount outstanding (or the amount of the pre-payment), into the Company’s Series A Preferred at the par value of $1,000 per share. This transaction was executed in reliance on an exemption provided by Section 4(a)(2) of the Securities Act.
Item 9.01. Financial Statements and Exhibits.
| (a) | Exhibits |
| 10.1 | Certificate of Designation of Series A Preferred Stock | |
| 10.2 | Act of Sale with Assumption of Mortgage. |
| 10.3 | Commercial Note Line of Credit. |
| 99.1 | Press Release issued by RedHawk Holdings Corp. dated November 19, 2015. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 19, 2015 | RedHawk Holdings Corp. | |
| By: | /s/ G. Darcy Klug | |
| Name: | G. Darcy Klug | |
| Title: | Chief Financial Officer | |
Exhibit 10.1
REDHAWK HOLDINGS CORP.
CERTIFICATE OF DESIGNATION
OF
SERIES A PREFERRED STOCK
Section 1. Definitions. For the purposes hereof, the following terms shall have the following meanings:
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Common Stock” means the Company’s common stock, par value $0.001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company” shall mean RedHawk Holdings Corp., a Nevada corporation.
“Conversion Date” shall have the meaning set forth in Section 6(a).
“Conversion Rate” shall have the meaning set forth in Section 6(b).
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series A Preferred in accordance with the terms hereof.
“Holder” shall have the meaning given such term in Section 2.
“Junior Securities” means the Common Stock and all other Common Stock Equivalents of the Company other than those securities which are explicitly senior or pari passu to the Series A Preferred in dividend rights or liquidation preference.
“Liquidation” shall have the meaning set forth in Section 5.
“Notice of Conversion” shall have the meaning set forth in Section 6(a).
“Original Issue Date” means the date of the first issuance of the Series A Preferred shares in question regardless of the number of transfers of any particular shares of Series A Preferred and regardless of the number of certificates which may be issued to evidence such Series A Preferred.
1
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Series A Preferred” shall have the meaning set forth in Section 2.
“Securities” means the Series A Preferred and the Underlying Shares.
“Share Delivery Date” shall have the meaning set forth in Section 6(c)(i).
“Stated Value” shall have the meaning set forth in Section 2, as the same may be increased from time to time pursuant to Section 3(a).
“Trading Day” means a day on which the New York Stock Exchange is open for business.
“Transfer Agent” means VStock Transfer, LLC and any successor transfer agent of the Company.
“Underlying Shares” means the shares of Common Stock issued and issuable upon conversion of the Series A Preferred in accordance with the terms of this Certificate of Designation.
Section 2. Designation, Amount and Par Value. The series of preferred stock shall be designated as the Series A Preferred Stock (the “Series A Preferred”) and the number of shares so designated shall be two thousand (2,000) (which shall not be subject to increase without the written consent of all of the holders of the Series A Preferred (each, a “Holder” and collectively, the “Holders”)). Each share of Series A Preferred shall have a par value of $1,000.00 per share and a stated value equal to $1,000.00 per share, subject to increase as set forth in Section 3(a) below (the “Stated Value”).
Section 3. Dividends.
(a) Dividends in Cash or in Kind. Holders shall be entitled to receive, and the Company shall pay, cumulative dividends at the rate per share (as a percentage of the Stated Value per share) of 5.0% per annum, payable quarterly within 30 days of January 1, April 1, July 1 and October 1 of each year, beginning on the first such date after the Original Issue Date and on each Conversion Date (with respect only to Preferred Stock being converted) (each such date, a “Dividend Payment Date”) (if any Dividend Payment Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day) in cash, or at the Company’s option, such dividends shall be accreted to, and increase, the outstanding Stated Value.
2
(b) Dividend Calculations. Dividends on the Preferred Stock shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue from such date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. Dividends shall cease to accrue with respect to any Series A Preferred converted as provided for herein. Except as otherwise provided herein, if at any time the Company pays dividends partially in cash and partially through accretion to Stated Value, then such payment shall be distributed ratably among the Holders based upon the number of shares of Preferred Stock held by each Holder on such Dividend Payment Date.
Section 4. Voting Rights. Except as otherwise provided herein or as otherwise required by law, holders of Series A Preferred shall vote together with the Common Stock on all matters submitted to stockholders. Each Series A Preferred share shall be entitled to ten (10) votes on all matters submitted to a vote of the stockholders of the Company for each share of Common Stock into which such Series A Preferred could have been converted on the last Dividend Payment Date. Also, as long as any shares of Series A Preferred are outstanding, the Company shall not, without the affirmative vote of a majority of the Holders of the then outstanding shares of the Series A Preferred, alter or change adversely the powers, preferences or rights given to the Series A Preferred (including by issuance of more senior preferred stock) or alter or amend this Certificate of Designation.
Section 5. Liquidation. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the Stated Value of the Series A Preferred and any other fees or liquidated damages then due and owing thereon under this Certificate of Designation, for each share of Series A Preferred, before any distribution or payment shall be made to the holders of any Junior Securities, and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among the Holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Section 6. Conversion.
a) Conversions at Option of Holder. Each share of Series A Preferred shall be convertible, at any time following the six (6) month anniversary of the Original Issue Date, and from time to time from and thereafter at the option of the Holder thereof into Common Stock at the Conversion Rate. Holders shall effect conversions by providing the Company with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Series A Preferred to be converted, the number of shares of Series A Preferred owned prior to the conversion at issue, the number of shares of Series A Preferred owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers such Notice of Conversion to the Company (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Company is deemed delivered hereunder. No ink-original Notice of Conversion shall be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of Series A Preferred, a Holder shall not be required to surrender the certificate(s) representing the shares of Series A Preferred to the Company unless all of the shares of Series A Preferred represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Series A Preferred promptly following the Conversion Date at issue. Shares of Series A Preferred converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.
3
b) Conversion Rate. Each share of Series A Preferred shall be convertible into the number of shares of Common Stock equal to the quotient of: (1) the Stated Value, as may be increased from time to time pursuant to Section 3(a), by (2) $0.015 (the “Conversion Rate”).
c) Mechanics of Conversion
i. Delivery of Conversion Shares Upon Conversion. Not later than five (5) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the converting Holder the number of Conversion Shares being acquired upon the conversion of the Series A Preferred. If the Common Stock is listed or quoted for public trading and upon request of the Holder, the Company shall deliver the Conversion Shares required to be delivered by the Company under this Section 6 electronically through the Depository Trust Company or another established clearing corporation performing similar functions.
ii. Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Series A Preferred certificate delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.
iii. Obligation Absolute. The Company’s obligation to issue and deliver the Conversion Shares upon conversion of Series A Preferred in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action that the Company may have against such Holder. In the event a Holder shall elect to convert any or all of the Series A Preferred, the Company may not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Series A Preferred of such Holder shall have been sought and obtained. In the absence of such injunction, the Company shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion.
4
iv. Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Preferred, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Series A Preferred), not less than such aggregate number of shares of the Common Stock as shall be issuable upon the conversion of the then outstanding shares of Series A Preferred. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.
v. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series A Preferred. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Rate or round up to the next whole share.
vi. Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Series A Preferred shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Series A Preferred and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.
Section 7. Certain Adjustments.
a) Stock Dividends and Stock Splits. If the Company, at any time while this Series A Preferred is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of this Series A Preferred), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Rate shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
5
b) Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
c) Notice to the Holders.
i. Adjustment to Conversion Rate. Whenever the Conversion Rate is adjusted pursuant to any provision of this Section 7, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Series A Preferred, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Company, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.
6
Section 8. Miscellaneous.
a) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at 219 Chemin Metairie Road, Youngsville, Louisiana, 70592, Attention: Daniel J. Schreiber, or such other address as the Company may specify for such purposes by notice to the Holders delivered in accordance with this Section 8. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (Central time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (Central time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
b) Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay liquidated damages, as applicable, on the shares of Series A Preferred at the time, place, and rate, and in the coin or currency, herein prescribed.
c) Lost or Mutilated Series A Preferred Certificate. If a Holder’s Series A Preferred certificate shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series A Preferred so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Company.
d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflict of laws thereof.
e) Waiver. Any waiver by the Company or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Company or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Company or a Holder must be in writing.
7
f) Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.
g) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
h) Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.
i) Status of Converted or Redeemed Series A Preferred. If any shares of Series A Preferred shall be converted, redeemed or reacquired by the Company, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series A Preferred.
*********************
8
ANNEX A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert Shares of Series A Preferred Stock)
The undersigned hereby elects to convert the number of shares of Series A Convertible Preferred Stock indicated below into shares of common stock, par value $0.001 per share (the “Common Stock”), of RedHawk Holdings Corp., a Nevada corporation (the “Company”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Company. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.
Conversion calculations:
|
Date to Effect Conversion: _____________________________________________
| |
|
Number of shares of Series A Preferred owned prior to Conversion: _______________
| |
|
Number of shares of Series A Preferred to be Converted: ________________________
| |
|
Number of shares of Common Stock to be Issued: ___________________________
| |
|
Applicable Conversion Rate:____________________________________________
| |
|
Number of shares of Series A Preferred subsequent to Conversion: ________________
| |
| Address for Delivery: ______________________ |
| [HOLDER] | ||
| By: | ||
| Name: | ||
| Title: | ||
9
Exhibit 10.2
STATE OF LOUISIANA
PARISH OF LAFAYETTE
ACT OF SALE WITH ASSUMPTION OF MORTGAGE
BE IT KNOWN that that on the date set forth below, but effective for all purposes as of November 12, 2015 (the “Effective Date”), before me, Notary Public, duly commissioned and qualified in the State and Parish aforesaid, and in the presence of the undersigned witnesses, personally came and appeared:
BEECHWOOD PROPERTIES, LLC (last four digits of Tax Id No. 7341), a Louisiana limited liability company domiciled at 219 Chemin Metairie Road, Youngsville, Louisiana 70592, represented herein by G. Darcy Klug, its sole Manager (hereinafter “Seller”)
who declared that for and in consideration of FOUR HUNDRED EIGHTY THOUSAND AND NO/100 DOLLARS ($480,000.00), (the “Purchase Price”) the receipt and sufficiency of which is hereby acknowledged, payable as set forth below, Seller does hereby sell and deliver with full warranty of title and with subrogation to all rights and actions of warranty Seller may have against any predecessors in title, unto:
REDHAWK LAND & HOSPITALITY, LLC, (last four digits of Tax ID No. 4879) whose mailing address is 219 Chemin Metairie Road, Youngsville, Louisiana 70592, represented herein by G. Darcy Klug, its sole Manager (hereinafter referred to as “Purchaser”),
the following described property, with all its component parts, including all rights, ways, privileges, servitudes and appurtenances thereto belonging, the possession of which Purchaser acknowledges, located in Lafayette Parish, Louisiana, to-wit:
THAT CERTAIN IRREGULAR PLOT OF GROUND, together with all the buildings and improvements thereon, situated in the Alexander Mouton Addition to the City of Lafayette, Louisiana, being Lots No. one, two, three and four (1, 2, 3, 4) of Block One (1) of said addition. Said lots forming said irregular plot of ground are contiguous and are together bounded Northeasterly by Jefferson or Oak Avenue; Northwesterly by Lots No. 41, 42, 43, 44, 45 of said Block One (1), said addition; Southwesterly by Lot No. 5, said block, said addition; and Southeasterly by General Gardiner Street; said lots having the dimensions as shown by plat of said addition on file in the Clerk’s office for the Parish of Lafayette, Louisiana (the “Property”).
The Property bears the municipal address of 1118 Jefferson Street, Lafayette, Louisiana.
Being the same property acquired by Beechwood Properties, LLC by Cash Sale dated July 18, 2008, recorded July 21, 2008, under Entry No. 2008-00031059 in the records of the Clerk of Court for the Parish of Lafayette, Louisiana.
The Purchase Price is payable as follows: (a) Purchaser hereby assumes and agrees to pay, in full, to its complete and final discharge, the remaining balance due (which as of the Effective Date is $265,000.00) on that certain Promissory Note made by Seller payable to the order of Regions Bank dated June 23, 2014 in the original principal amount of Two Hundred Seventy-Five Thousand and No/100 Dollars ($275,000.00)(the “Note”), which Note is secured by that certain Multiple Indebtedness Mortgage on the Property by Seller in favor of Regions Bank dated June 23, 2014 and recorded July 18, 2014 under Entry No. 2014-00026763 in the mortgage records of the Clerk of Court for the Parish of Lafayette, State of Louisiana (the “Mortgage”) and that certain Assignment of Leases and Rents by and between Seller and Regions Bank dated June 23, 2014 and recorded July 18, 2014 under Entry No. 2014-00026767 in the conveyance records of the Clerk of Court for the Parish of Lafayette, State of Louisiana (the “Assignment of Leases and Rent ”); and (b) Purchaser has, as of the Effective Date, caused to have issued and delivered to Seller 215 shares (par value of $1,000.00 per share and stated value equal to $1,000.00 per share) of Series A Convertible Preferred Stock of Redhawk Holdings Corp.
This sale is made subject to the Mortgage, the Assignment of Leases and Rents and that certain Lease (the “Lease”) dated as of August 1, 2011 by and between Seller, as landlord, and the Louisiana Third Circuit Court of Appeal, as tenant, evidenced of record by that certain Notice of Lease dated August 1, 2011 and recorded August 2, 2011 under Entry No. 2011-00030158 in the conveyance records of the Clerk of Court for the Parish of Lafayette, State of Louisiana.
Purchaser does hereby assume and agree to hold the Seller free and harmless and to indemnify and defend from the payment and satisfaction of all obligations and liabilities under the Note, the Mortgage and the Assignment of Leases and Rents. Purchaser agrees to fully comply with and discharge all of the terms and conditions of the Note, Mortgage and Assignment of Leases and Rents arising from and after the Effective Date and the obligation to make payments of principal and interest installments under the Note arising from and after the Effective Date, in each case, to the same extent as if Purchaser had personally executed the Note, the Mortgage and the Assignment of Leases and Rents. All of the terms and conditions of the Note, the Mortgage and the Assignment of Leases and Rents shall remain in full force and effect, and the execution of this sale shall not be considered a novation of the Note, the Mortgage or the Assignment of the Leases and Rents.
Seller hereby assigns its entire interest in and to the Lease to Purchaser and Purchaser expressly accepts the assignment of the Lease and assumes all of the obligations of Seller under the Lease as of the Effective Date. Seller expressly agrees to indemnify and hold Purchaser harmless from any liabilities, obligations or claims resulting from or arising out of Seller’s failure to perform all obligations of landlord under the Lease arising prior to the Effective Date. Purchaser expressly agrees to indemnify and hold Seller harmless from any liabilities, obligations or claims resulting from or arising out of Purchaser’s failure to perform all obligations of landlord under the Lease arising from and after the Effective Date.
Seller hereby waives any vendor's lien it may have, and any other right it may have to rescind this sale in whole or in part for inadequate consideration or any other reason.
Seller transfers to Purchaser all of Seller's right, title and interest in and to any escrow funds or other funds held by the Mortgagee to secure payment of any taxes, insurance, or other charges.
All agreements, stipulations and obligations assumed herein shall inure to the benefit of and be binding upon the heirs, successors and assigns of the respective parties. Purchaser’s heirs and assigns shall have and hold the described property in full ownership forever.
“Seller” and “Purchaser” agree that the improvements and all other items on the property are transferred by “Seller” to “Purchaser” on an “AS IS” and “WHERE IS” basis, in their present condition and that these are being transferred by “Seller” to “Purchaser” without any warranty whatsoever on the part of the “Seller,” except as to title. “Purchaser” hereby expressly waives all warranties as to the property herein sold, whether expressed or implied by this or any other writing or representation, as well as any warranties provided by law. This waiver applies to all warranties of any nature, express or implied, including without limitation warranties of fitness for a particular purpose, or otherwise, except merchantability of title. “Purchaser” understands that under Articles 2520 through 2548 of the Louisiana Civil Code and other provisions of law, this sale would ordinarily include a warranty, implied by Louisiana, against certain defects in the property sold. “Purchaser” expressly waives any and all such warranties, with respect to all defects, whether apparent of latent, visible or not visible and regardless of whether “Purchaser” is presently aware of such defects. This waiver of warranty extends to all defects, even if the defect or defects render the property absolutely useless, or so inconvenient and imperfect that “Purchaser” would not have purchased it had it known of the defect. “Purchaser” also waives any rights “Purchaser” might have or ever have relative to this sale: a) to any redhibitory action; b) to the return all or any portion of the purchase price; c) to rescind or revoke the sale; or d) to have “Seller” repair or replace all or any part of the property conveyed. “Seller,” however, does assign and transfer to “Purchaser” and rights of warranty that “Seller” might have, if any, against others pertaining thereto. “Purchaser” hereby acknowledges that “Purchaser” has read and understands the foregoing waiver of warranty, that the waiver has been pointed out and explained to “Purchaser,” and that questions or doubts “Purchaser” has concerning same have been answered satisfactorily. “Seller” and “Purchaser” acknowledged and stipulate that the sales price was negotiated and agreed upon after consideration of the waiver of warranty herein set forth.
Taxes for the current year will be paid by Purchaser, but pro-rated between Seller and Purchaser as of the Effective Date. In accordance with La. R.S. 9:2721, notice is given that Purchaser is designated as the party to whom all property tax and assessment notices are to be mailed, said notices to be sent to the address shown above for said Purchaser.
All parties to this act confirm, acknowledge, and agree that the notary public before whom the Seller executes this act shall have no responsibility or liability whatsoever of any nature, type, or kind, express or implied, for (1) obtaining mortgage, conveyance, tax and any and all other researches and certifies, (2) examining title to the Property, (3) obtaining a title insurance policy insuring title to the Property, or (4) obtaining a survey of the Property. This act shall become effective upon its execution by the last party to execute this act.
THUS DONE AND SIGNED in the City of Lafayette, Lafayette Parish, Louisiana, in the presence of the undersigned competent witnesses and me, Notary, on this ___ day of November, 2015.
| WITNESSES: | BEECHWOOD PROPERTIES, LLC | ||
| Print: | G. DARCY KLUG, MANAGER | ||
| REDHAWK LAND & HOSPITALITY, LLC | |||
| Print: |
G. DARCY KLUG, MANAGER | ||
___________________________________
NOTARY PUBLIC
Print Name: _________________________________
State Bar No./Notary Identification No.: ________________
Commission expires: ______________________
Exhibit 10.3
Commercial Note
Line of Credit
| $100,000.00 | November 12, 2015 |
Subject to the terms and conditions of this Commercial Note for Line of Credit (the “Note”), Beechwood Properties, LLC (“Lender”) has made a Line of Credit Loan (the “Line of Credit”) to RedHawk Holdings Corp., a Nevada corporation (the “Borrower”), in the maximum principal amount of ONE HUNDRED THOUSAND and no/100 ($100,000.00) dollars. This Line of Credit is a non-revolving loan, and the principal amount available under this Line of Credit shall be reduced by the amount of each advance and shall not be increased after payments have reduced the amount outstanding.
(i) REPAYMENT: All outstanding principal and accrued interest shall be due and payable in full on October 31, 2016 (the “Maturity Date”). Upon fifteen (15) business day’s advance notice, Borrower may prepay without penalty any principal on this Note in whole or in part and any prepayments made on this Note shall be applied to the principal payment(s) due on this Note.
| INTEREST: | Interest shall accrue on this Note at the rate of 5.0% per annum from date of advance until paid, payable in monthly installments of interest only, payable in arrears, commencing on November 30, 2015 and continuing on the same day of each month thereafter, with a final payment of all principal and outstanding interest due (along with any other fees and expenses) and payable on the Maturity Date. |
DEFAULT
| RATE: | After maturity, whether that maturity results from acceleration or otherwise, interest shall, to the extent permitted by law, accrue at the Default Rate. Additionally, upon the occurrence of any Default (and from and after the date of such occurrence) and following the declaration of the Borrower’s Default, interest shall, to the extent permitted by law, accrue at the Default Rate. The “Default Rate” shall be the maximum rate authorized by applicable law, and if applicable law establishes no maximum rate, then Eighteen Percent (18%) per annum. All interest shall be computed on the basis of the actual number of days elapsed over a year composed of 360 days. Interest shall accrue from the first date that funds are advanced to Borrower until all sums due hereunder are paid in full. |
(ii) ADVANCES: Advances totaling approximately $44,000.00 have been made through the date of this Note.
| (iii) | From time to time, and as a condition to each advance under the Line of Credit, Borrower shall submit to Lender a borrowing request, setting forth the principal amount of the advance requested by Borrower from Lender pursuant to the terms hereof, the total amount advanced to date and the requested date of funding. The amount of the requested advance when added to the then outstanding principal balance of the Line of Credit shall not exceed $100,000.00. Such borrowing request shall be made no later than seven (7) business days prior to the requested day of funding. Lender is not obligated to make any additional advances pursuant to any borrowing request and all future advances are in the sole discretion of the Lender. |
| (iv) | Each advance under this Note and each payment on this Note shall be evidenced by entries in the Lender’s and Borrower’s internal records, which shall be prima facie evidence of (a) the amount of principal and interest owing on this Note from time to time; (b) the amount of each advance made to Borrower under this Note; and (c) the amount of each principal and/or interest payment received by Lender on this Note. The failure to make an accurate entry of advances and payments shall not limit or otherwise affect the obligation of Borrower to repay funds actually advanced by Lender hereunder. |
(v) OPTIONAL
(vi) CONVERSION: Subject to the conditions herein, Lender shall have the right, but not the obligation, to convert the amount of any prepayment and all outstanding principal, accrued but unpaid interest, and any other fees, costs and expenses owing to the Lender at maturity into shares of the Company’s Series A preferred stock, par value $1,000.00 per share (the “Preferred Stock”). Such conversions may be made at the Lender’s option upon maturity or any prepayment.
(vii)
| (viii) | In order to convert the amounts outstanding into Preferred Stock, no later than ten (10) business days prior to the Maturity Date, or within seven (7) business days of Borrower’s notice of prepayment, the Lender shall provide written notice of its option to convert amounts owed into shares of the Company Preferred Stock. The number of whole shares of Preferred Stock to be issued shall be equal to: (1) the aggregate amount (including accrued but unpaid interest and fees) owed, or in the event of a conversion upon prepayment, the amount prepaid, by Borrower to Lender divided by (2) the par value of each share of Preferred Stock. The Borrower shall pay Lender cash in lieu of any fractional shares of Preferred Stock that would otherwise be issued. |
(ix)
| (x) | THE PREFERRED STOCK INTO WHICH THIS NOTE IS CONVERTIBLE, AND THE COMMON STOCK INTO WHICH THE PREFERRED STOCK IS CONVERTIBLE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. |
| (xi) |
(xii) DEFAULT: The occurrence of the failure of Borrower to make any payment of principal or interest under this Note when due shall be considered an event of default (“Default”). In the event of a Default, Lender will be under no further obligation to comply with any obligations with respect to this Note.
(xiii)
| (xiv) | Upon the occurrence of a Default, Lender may pursue any one or more of the following remedies: |
| (i) | cancel this Note by written notice to Borrower, in which event Lender shall be fully released and relieved of all further obligations and liabilities to Borrower hereunder; provided however, that Borrower shall not be released from any of its obligations and liabilities owed to Lender hereunder; |
| (ii) | institute appropriate proceedings to specifically enforce performance hereof; or |
| (iii) | accelerate maturity of the Note, and demand payment (or conversion into Preferred Stock) of the principal sums due hereunder with interest, advances and costs, and in default of said payment or any part hereof and pursue any or all of its other rights and remedies provided by law. |
| (xv) | The remedies herein provided shall be in addition to and not in substitution for the rights and remedies which would otherwise be vested in Lender at law or in equity, all of which rights and remedies are specifically reserved by Lender. The remedies herein provided or otherwise available to Lender shall be cumulative and may be exercised concurrently. The failure to exercise any of the remedies herein provided shall not constitute a waiver thereof, nor shall exercise of any of the remedies hereby provided prevent the subsequent or concurrent resort to any other remedy or remedies. It is intended that all remedies herein provided or otherwise available to Lender shall continue and be available to Lender until all sums due it by reason of this Note have been paid to it in full and all obligations of Borrower pursuant to this Note have been satisfied. |
Each party to this Note waives presentment for payment, demand, notice of dishonor, protest, pleas of discussion and division. To secure the indebtedness evidenced by this Note, including, without limitation, future advances, with interest, reasonable and documented attorneys' fees, documented expenses of collection and documented costs, Borrower further agrees to pay any and all documented charges, documented fees, documented costs and/or documented taxes levied or assessed against Lender in connection with this Note. If any payment on this Note is eleven (11) days or more late, Borrower agrees to pay to the Lender, in addition to the amount otherwise due hereunder, a delinquency charge of 5.00% of the unpaid amount of payment, or $50.00, whichever is greater. Late charges will not be assessed following declaration of default and acceleration of maturity of this Note. In the event that any payment under this Note by check or preauthorized charge is later dishonored or returned to Lender unpaid due to nonsufficient funds, Borrower agrees to pay Lender an additional NSF check charge equal to $50.00. The provisions of this Note may not be waived or modified except in writing, signed by Lender. No failure or delay of Lender in exercising its rights shall be construed as a waiver.
SUCCESSORS AND ASSIGNS. This Note is binding upon and shall inure to the benefit of the Lender and the Borrower and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Note without the prior written consent of the Lender.
ENTIRE AGREEMENT; AMENDMENT; WAIVERS. This Note embodies the final, entire agreement among the parties hereto and supersedes any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. There are no oral agreements among the parties hereto. The provisions of this Note to which the Borrower is a party may be amended or waived only by an instrument in writing signed by the parties hereto.
COUNTERPARTS. This Note may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
SEVERABILITY. Any provision of this Note held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Note and the effect thereof shall be confined to the provision held to be invalid or illegal.
APPLICABLE LAW. This Note shall be governed by and construed and enforced in accordance with the internal laws of the State of Louisiana, without regard to the principals of conflict of laws thereof.
Lender:
Beechwood Properties, LLC
| By: | ||
| Name: G. Darcy Klug | ||
| Title: Manager | ||
Borrower:
RedHawk Holdings Corp.
| By: | ||
| Name: Daniel J. Schriber | ||
| Title: Chief Executive Officer | ||
Exhibit 99.1
| FOR IMMEDIATE RELEASE | NOVEMBER 19, 2015 |
Media Contact:
Julie Calzone
(337) 235-2924
jcalzone@calzone.com
Company Contacts:
Daniel J. Schreiber, CEO
(858) 509-8800
dan@redhawkholdingscorp.com
G. Darcy Klug, CFO
(337) 269-5933
darcy.klug@redhawkholdingscorp.com
REDHAWK ANNOUNCES FIRST QUARTER RESULTS
Youngsville, Louisiana (OTC: IDNG) – RedHawk Holdings Corp. (“RedHawk” or the “Company”) announced today that it has reported a net loss of $108,404 for the three months ended September 30, 2015, as compared to a net loss of $46,171 for the three months ended September 30, 2014. The $62,233 increase in the net loss was attributable to higher professional fees combined with higher amortization costs, which more than offset lower management fees for the three months ended September 30, 2015. The higher professional fees during the three months ended September 30, 2015 related primarily to increased business transactions and certain regulatory issues. The amortization expense for the three months ended September 30, 2015 was associated with the March 31, 2014 acquisition of certain intangibles from American Medical Distributors, LLC. There was no amortization expense recorded during the three months ended September 30, 2014.
Commenting on the first quarter results, Daniel J. Schreiber, Chairman and Chief Executive Officer, said, “We have initiated the program to re-capitalize our balance sheet. This recapitalization allows us to continue pursuing expansion of our land, medical device, pharmaceutical, and financial services business units. The next step in our balance sheet recapitalization includes obtaining the working capital necessary to complete certain previously announced acquisitions.”
“Negotiations and due diligence are ongoing with the previously announced strategic acquisition targets,” continued Schreiber. “During the quarter ending December 31, 2015, we expect to complete the acquisition of the membership interests in the previously announced real estate restoration project in Hilo, Hawaii. Closing of the previously announced European pharmaceutical acquisition is expected to be finalized in early 2016 after completion of ongoing due diligence.”
Schreiber added, “During the 2015 fiscal year, we focused on re-directing our business strategies. During the 2016 fiscal year, we are focused on identifying and completing strategic transactions with strong growth potential. We believe with this disciplined approach and with management’s execution of our business plan and model, RedHawk is well positioned to enhance future shareholder value.”
# # #
This release may contain forward-looking statements. Forward-looking statements are all statements other than statements of historical fact. Statements contained in this release that are not historical facts may be deemed to be forward-looking statements. The words “anticipate,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “to be,” “potential” and any similar expressions are intended to identify those assertions as forward-looking statements.
Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties. In evaluating forward-looking statements, you should consider the various factors which may cause actual results to differ materially from any forward-looking statements including those listed in the “Risk Factors” section of our latest 10-K report. Further, the Company may make changes to its business plans that could or will affect its results. Investors are cautioned that the Company will undertake no obligation to update any forward-looking statements.