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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 Act of 1934
Date of Report (Date of
earliest event reported): December 5,
2022
TEARDROPPERS,
INC.
(Exact name of registrant as specified in its charter)
| Nevada |
333-197889 |
46-2407247 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 620
Newport Center Dr. Suite 1100 PMB 488 |
|
| Newport Beach, CA |
92660 |
| (Address of Principal Executive Offices) |
(Zip Code) |
Registrant's telephone number, including area code: (949)
751-2173
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)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| N/A |
N/A |
N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act
of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Share Exchange Agreement and Subscriptions
Effective December 15, 2022, the Registrant, The
Teardroppers, Inc. (“Registrant”) entered into that certain Debt to Equity Conversion Agreement (the “DE Agreement”)
by and among Registrant and Gemini Southern, LLC, a Delaware limited liability company (“GSI”). .Pursuant to the DE Agreement,
GSI agreed to exchange $850,000 of principle indebtedness owed to GSI by Registrant for 3,400,000 shares of newly created Convertible
Class A Preferred Stock of the Registrant (the “Class A Preferred”). The Class A Preferred provides for the payment of a $0.12
per share dividend, which will be accrued. Distribution of all or part of the accrued dividends are at the discretion of the Registrant.
Each share of Class A Preferred is convertible, at any time at the Registrant’s discretion, into one share of common stock of the
Registrant.
The above description of the DE Agreement does
not purport to be complete and is qualified in its entirety by reference to the DE Agreement, and the Certificate of Designations (filed
with the State of Nevada creating the Class A Preferred), the which are attached here to as Exhibit 1.1 and 1.2 respectively, to this
Current Report on Form 8-K.
Item 3.02 Unregistered Sales of Equity
Securities.
The information set forth in Item 1.01 of this Current Report on Form
8-K is incorporated herein by reference.
Pursuant to the terms of the DE Agreement, the
Company issued 3,400,000 shares of Class A Preferred in exchange for $850,000 of principle indebtedness owed to GSI by Registrant (for
a description of the terms of the Class A Preferred, see Item 3.03 below .
These securities were not registered under the
Securities Act of 1933, as amended (the “Securities Act”), but qualified for exemption under Section 4(2) of the Securities
Act. The securities were exempt from registration under Section 4(2) of the Securities Act because the issuance of such securities by
the Company did not involve a “public offering,” as defined in Section 4(2) of the Securities Act, due to the insubstantial
number of persons involved in the transaction, size of the offering, manner of the offering and number of securities offered. The Company
did not undertake an offering in which it sold a high number of securities to a high number of investors. In addition, these shareholders
had the necessary investment intent as required by Section 4(2) of the Securities Act since they agreed to, and received, share certificates
bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that
these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.”
Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities
Act.
Item 3.03 Material Modification of
Rights of Security Holders
On January 10, 2023, Registrant filed Designations
(the “Designations”) with the Secretary of State of the State of Nevada, which created a new series of its Preferred Stock,
par value $0.001 per share, designated as “Class A Preferred Stock”. The terms of the Class A are as follows:
1. Stated Capital.
The amount to be represented in stated capital at all times for each share of Class A Preferred Stock shall be $.001.
2. Designation and Rank.
The Class A Preferred Stock shall rank senior to the Company's common stock, par value $0.001 per share (the "Common Stock"),
and to all other classes and series of equity securities of the Company ("Junior Stock"). with respect to the right to receive
dividends, distributions or proceeds in a liquidation, dissolution or winding up of the Corporation. The Class A Preferred Stock shall
be subordinate to and rank junior to all indebtedness of the Company now or hereafter outstanding.
3. Dividends The dividend rate on Class
A Preferred Shares shall be $.12 per share per annum. Dividends on Class A Preferred Shares shall be fully cumulative, accruing, without
interest, from the date of original issuance of the Class through the date of redemption or conversion thereof, and may be distributed,
or not distributed, at the discretion of the board of directors of the Company, in arrears on March 31, June 30, and September 30 of each
year, commencing January 1, 2023, except that if such date is not a Business Day then to the extent so declared by the Board of Directors
the dividend may be distributed on the first immediately succeeding Business Day (as used herein, the term “Business Day”
shall mean any day except a Saturday, Sunday or day on which banking institutions are legally authorized to close in Orange County, California)
(each such date being hereinafter referred to as a “Dividend Payment Date”). Dividends on the Class A Preferred Shares,
when distributed, shall be paid in cash; provided, however, the Corporation may pay such dividends, at the Corporation’s
option, (i) in fully paid and nonassessable shares of Common Stock (such dividends paid in such form being herein called “PIK
Dividends”) or (ii) in cash. PIK Dividends shall be paid by delivering to each record holder of Class A Preferred Shares a number
of shares of Common Stock (“PIK Dividend Shares”) determined by dividing (x) the total aggregate dollar amount of dividends
accrued and unpaid with respect to Class A Preferred Shares owned by such record holder on the record date for the applicable Dividend
Payment Date (rounded to the nearest whole cent) by (y) the applicable PIK Dividend Price. In order to deliver PIK Dividend Shares in
lieu of cash on a Dividend Payment Date, the Corporation must deliver, on or before the fifteenth (15th) calendar day immediately
prior to such date, written notice to each Holder of Class A Preferred Shares stating that the Corporation wishes to do so (a “PIK
Stock Dividend Notice”); in the event that the Corporation does not deliver a Common Stock Dividend Notice on or before such
fifteenth (15th) day, the Corporation will be deemed to have elected to pay the related dividend in cash. Each Holder shall
promptly thereafter deliver to the Corporation instructions designating whether such Holder wishes to receive delivery of its Conversion
Shares in physical certificates (and, if so, at what address) or through DTC, as long as no legend is required by the terms of the Exchange
Agreement to be imprinted on such Shares (and, if so, the account number to be credited). If the Corporation wishes to deliver PIK Dividend
Shares in lieu of cash with respect to accrued dividends, it must do so with respect to all (but not less than all) of such dividends.
A Common Stock Dividend Notice, once delivered by the Corporation, shall be irrevocable unless the Corporation ceases to satisfy all of
the Stock Payment Conditions at any time after delivering such Common Stock Dividend Notice, in which case such notice shall be deemed
revoked and the dividend to which such notice relates shall be payable in cash on the Dividend Payment Date. The Corporation shall not
issue fractional shares of Common Stock to which Holders may become entitled pursuant to this subparagraph, but in lieu thereof, the Corporation
shall round the number of shares to be issued up to the next whole number. Each dividend shall be paid to the Holders of record of Class
A Preferred Shares as they appear on the stock register of the Corporation on the record date, not less than 10 nor more than 60 days
preceding the applicable Dividend Payment Date, as shall be fixed by the Board of Directors. Dividends payable on each Dividend Payment
Date shall be computed on the basis of a 360-day year of twelve 30-day months and rounded to the nearest cent. Dividends on account of
arrearages for any past Dividend Payment Date may be declared and paid at any time, without reference to any scheduled Dividend Payment
Date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board of Directors
of the Corporation. Dividends shall accrue regardless of whether the Corporation has earnings, whether there are funds legally available
therefor and/or whether declared. No interest shall be payable with respect to any dividend payment that may be in arrears. Holders of
Class A Preferred Shares called for redemption between the close of business on a dividend payment record date and the close of business
on the corresponding dividend payment date shall, in lieu of receiving such dividend on the Dividend Payment Date fixed therefor, receive
such dividend payment on the date fixed for redemption together with all other accrued and unpaid dividends to the date fixed for redemption.
The Holders shall not be entitled to any dividends other than the dividends provided for in this Paragraph 3.
4. Liquidation Participation. In the event
of any voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation, the holders of shares of Class A Preferred
Stock shall be entitled to participate in the distribution of the assets of the Corporation pursuant to Paragraph 2 above . A liquidation,
dissolution, or winding-up of the Corporation, as such terms are used in this of Article (V) shall not be deemed to be occasioned by or
to include any merger of the Corporation with or into one or more corporations or other entities, any acquisition or exchange of the outstanding
shares of one or more classes or Class of the Corporation, or any sale, lease, exchange, or other disposition of all or a part of the
assets of the Corporation.
5. Right to Action by Vote or Consent. The
Class A Preferred Stock shall have no right to vote at any meeting of the shareholders of common stock.
6. Conversion The shares of Class A Preferred
Stock shall be convertible into shares of Common Stock on the terms and conditions set forth in this Paragraph 6.
(a) Optional Conversion Right. At any time,
the Corporation, shall be entitled, without any further consideration, to convert all or any part of the then-outstanding shares of Class
A Preferred Stock into fully paid and non-assessable shares of Common Stock in accordance with Paragraph 6(b) below, at the Conversion
Rate. The Corporation shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the
issuance of a fraction of a share of Common Stock, the Corporation shall round such fraction of a share of Common Stock up to the nearest
whole share. The Corporation shall pay any and all transfer, stamp, and similar taxes that may be payable with respect to the issuance
and delivery of Common Stock upon conversion of any shares of Class A Preferred Stock. Except as specifically set forth herein, the optional
conversion of any shares of Class A Preferred Stock shall immediately terminate any rights, including rights to payment of accrued dividends,
attached to such shares of Class A Preferred Stock upon conversion.
(b) Conversion Rate. Each share of Class
A Preferred is convertible into one share of Common Stock.
(c) Insufficient Authorized Shares. If at
any time the Corporation does not have a sufficient number of authorized and unreserved shares of common stock to be able to issue at
least a number of Conversion Shares (appropriately adjusted for any stock split, stock dividend, reverse stock split, stock combination
or other similar transaction) (an “Authorized Share Failure”), to the Class A Preferred Stock shareholders, then the Corporation
shall immediately take all action necessary to increase the Corporation’s authorized shares of Common Stock to an amount sufficient
to allow the Corporation to issue the Conversion Shares (appropriately adjusted for any stock split, stock dividend, reverse stock split,
stock combination or other similar transaction) for the Class A Preferred Stock.
(d) Mechanics of Conversion. To convert
the shares of Class A Preferred Stock into the Conversion Shares, the Corporation shall transmit to the Holders of the Class A Preferred
Stock or their duly appointed Designee (the “Designee“), by facsimile (or otherwise deliver), for receipt at least five days
prior to a date on which such shares of Class A Preferred Stock will be converted, a Notice of Conversion in the form attached hereto
as Exhibit A (the “Conversion Notice”) to the Holders. and (ii) the Holders shall surrender the certificate(s)
representing and/or including such shares of Class A Preferred Stock on the same day on which the Conversion Notice is delivered to a
nationally recognized overnight delivery service for delivery to the Corporation (or an indemnification undertaking with respect to such
shares of Class A Preferred Stock in the case of its loss, theft, or destruction) (the date on which the conditions set forth in (i) and
(ii) are satisfied being the “Conversion Date”). On or before the third Business Day following the Conversion
Date, the Corporation shall transmit by facsimile (or otherwise deliver) an acknowledgment of confirmation of receipt of Class A Preferred
Certificates from the Holder(s) of such shares and the Corporation’s transfer agent. Subject to the timely receipt of the certificates
or indemnification undertaking referred to in clause (ii) above, on or before the fifth Business Day following the Conversion Date, the
Corporation shall issue and deliver a certificate, registered in the name of the Holder(s) or such Holders’ designee, for the number
of shares of Common Stock to which the Holder(s) shall be entitled.
(e) Adjustments for Mergers or Reorganizations,
etc. If at any time there shall occur any reclassification, reorganization, recapitalization, consolidation, sale of all or substantially
all of the Corporation’s assets, property, or business, or any merger involving the Corporation, in each case in which the common
stock is converted into or exchanged for securities (including warrants or other subscription or purchase rights), cash or other property,
or pursuant to which any such securities, cash, or other property is to be received by or distributed to the holders of common stock of
the Corporation (each, a “Reorganization Event”), then, following any such Reorganization Event, the Conversion
Rate shall be adjusted such that Holders of shares of Class A Preferred Stock shall be entitled to receive upon the conversion hereof
the kind and amount of securities, cash, or other property which the Holders would have been entitled to receive if, immediately prior
to such Reorganization Event, the Holder had held the number of shares of Common Stock as provided hereunder, giving application to all
adjustments called for during such period hereunder. The Corporation shall not effect any Reorganization Event unless, prior to the consummation
thereof, the successor or surviving entity (if other than the Corporation) and, if an entity different from the successor or surviving
entity, the entity whose stock, securities, assets, or other property the holders of common stock are entitled to receive as a result
of such Reorganization Event, assumes by written instrument (i) the obligations to deliver such shares of stock, securities, assets, or
other property as, in accordance with the foregoing provisions, the Holders of shares of the Class A Preferred Stock may be entitled to
receive and (ii) the due and punctual observance and performance of the powers, designations, preferences, and relative, participating,
optional, or other special rights, and the qualifications, limitations, or restrictions applicable to the Class A Preferred Stock as set
forth herein. The foregoing provisions shall similarly apply to successive Reorganization Events and to the stock or securities of any
other corporation.
(f) Adjustment for Reclassification, Exchange,
and Substitution. If at any time or from time to time, the common stock issuable upon conversion hereof is changed into the same or
a different number of shares of any class or classes of stock, the shares of Class A Preferred Stock will thereafter obtain the right
to acquire such number and kind of securities as would have been issuable as a result of conversion of such shares and the Conversion
Price therefor shall be appropriately adjusted, such adjustment to be determined by the Board in its sole and absolute discretion, all
subject to further adjustment in this Paragraph 6(f).
(g) Certain Limitations. The Corporation
will not enter into any agreements inconsistent with the rights of the Holders hereunder.
(h) Reservation of Common Stock. The Corporation
shall, so long as any shares of Class A Preferred Stock are outstanding, reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the Class A Preferred Stock, such number of shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all of the Class A Preferred Stock then outstanding.
7. Legal Fees. In the event that any action
is instituted by the Holders of the Class A Preferred Stock under these Designations to enforce or interpret any of the terms hereof,
the Holders of the Class A Preferred Stock shall be entitled to be paid all court costs and expenses, including reasonable attorneys’
fees, incurred by the Class A Preferred Stock Holders with respect to such action, unless as a part of such action, the court of competent
jurisdiction determines that each of the material assertions made by Class A Preferred Stock Holders as a basis for such action were not
made in good faith or were frivolous. In the event of an action instituted by or in the name of the Corporation under this Paragraph 7
of these Designations or to enforce or interpret any of the terms of this Paragraph 7 of these Designations, shall be entitled to be paid
all court costs and expenses, including attorneys’ fees, incurred by Class A Preferred Stock Holders in defense of such action (including
with respect to Class A Preferred Stock Holders’ counterclaims and cross-claims made in such action), unless as a part of such action
the court determines that each of Class A Preferred Stock Holders material defenses to such action were made in bad faith or were frivolous.
8. Redemption.
(a) Optional Redemption. The Company, at
its option, may redeem, in whole or in part, at any time and from time to time, out of funds legally available therefor, the shares of
Class A Preferred Stock at the time outstanding, upon notice given as provided in Paragraph 8(d) below, at a redemption price equal to
100% of the issue price plus any accrued and unpaid dividends, but excluding, the date fixed for redemption; provided, however,
that if less than all of the outstanding Class A Preferred Stock is then being redeemed, the Liquidation Amount of the shares of Class
A Preferred Stock being redeemed shall not be less than 25% of the aggregate Liquidation Amount for all shares of Class A Preferred Stock
as of the Original Issue Date.
(b) Redemption Date. The redemption price
for any shares of Class A Preferred Stock shall be payable on the redemption date to the holder of such shares against surrender of the
certificate(s) evidencing such shares to the Company or its agent.
(c) No Sinking Fund. The Class A Preferred
Stock will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders of Class A Preferred Stock will
have no right to require redemption or repurchase of any shares of Class A Preferred Stock.
(d) Notice of Redemption. Notice of every
redemption of shares of Class A Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of record
of the shares to be redeemed at their respective last addresses appearing on the books of the Company. Such mailing shall be at least
30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Sub-paragraph shall be conclusively
presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any
defect in such notice or in the mailing thereof, to any holder of shares of Class A Preferred Stock designated for redemption shall not
affect the validity of the proceedings for the redemption of any other shares of Class A Preferred Stock. Notwithstanding the foregoing,
if shares of Class A Preferred Stock are issued in book-entry form through The Depository Trust Company or any other similar facility,
notice of redemption may be given to the holders of Class A Preferred Stock at such time and in any manner permitted by such facility.
Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of Class A Preferred Stock
to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from
such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment
of the redemption price.
(e) Partial Redemption. In case of any redemption
of part of the shares of Class A Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata
or in such other manner as the Board of Directors or a duly authorized committee thereof may determine to be fair and equitable. Subject
to the provisions hereof, the Board of Directors or a duly authorized committee thereof shall have full power and authority to prescribe
the terms and conditions upon which shares of Class A Preferred Stock shall be redeemed from time to time. If fewer than all the shares
represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the
holder thereof.
(f) Effectiveness of Redemption. If notice
of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption
have been deposited by the Issuer, in trust for the pro rata benefit of the holders of the shares called for redemption, with a
bank or trust company doing business in the Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500
million and selected by the Board of Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any
certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends
shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding
and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption from such bank or trust.
9. Preemptive Rights. The Class A Preferred
Stock is not entitled to any preemptive or subscription rights in respect of any securities of the Corporation.
10. Number of Shares of Class A Preferred
Stock. The number of shares of Class A Preferred Stock shall initially be 3.4 million, which number may be increased or decreased
by the Corporation. Shares of Class A Preferred Stock converted by the Corporation shall be cancelled and shall revert to authorized
but unissued Preferred Stock, undesignated as to Class.
Item 5.01 Changes in Control of Registrant
On December 15, 2022, Larry Krogh,
Rayna Austin, and Robert J. Waltos (the “Former Directors) resigned as directors of the Registrant. Also on December 15, 2022, Cody
S. Ware resigned as Chief Executive Officer and President There were no disagreements known to the Registrant between the Former Directors,
Cody S. Ware and the Registrant with regard to the Registrant’s operations, policies or operations.
Pursuant to the Consent of a shareholder
holding the majority of common shares entitled to vote at a meeting of common shareholders, Kevin P. O’Connell was elected as sole
director of the Registrant. Also on December 15, 2022, Kevin P. O’Connell was elected as the Chief Executive Officer and President
of the Registrant.
Item 5.02 Departure
of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
The disclosures set forth in Item 5.01
above are incorporated by reference into this Item 5.02.
The business background description
of the newly appointed officer and director is as follows:
Kevin P. O’Connell -
From 1997 through the present, Mr. O’Connell has led venture capital investments and asset management (real estate & securities)
strategies with particular focus in the general capital markets consisting of private and public financing, mergers and acquisitions,
and corporate restructurings. He is the founder and managing partner of FinTekk AP, LLC a Southern California firm providing advisory
services, direct investment and capital markets consulting. Mr. O’Connell has been a direct principal investor and active board
member having managed the strategic decisions, equity/debt financing and developmental stage efforts of companies engaged in the technology,
healthcare and environmental industries.
He received a Bachelor of Arts (BA)
from California State University, Northridge (CSUN), earned his Master of Business Administration (MBA) from Pepperdine University
and completed the Corporate Governance Program at Harvard Business School (HBS) in Boston, MA.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
_________________
* Filed herewith
SIGNATURES
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.
| |
The Teardroppers, Inc. |
| |
|
| Date: January 26, 2023 |
By: |
/s/ Kevin P. O’Connell |
| |
|
Name: Kevin P. O’Connell
Title: Chief Executive Officer |
