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): August 15, 2019
ATTIS INDUSTRIES
INC.
(Exact Name of Registrant as Specified in Charter)
| New York | 001-13984 | 13-3832215 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
12540 Broadwell Road, Suite 2104
Milton, GA 30004
(Address of Principal Executive Offices) (Zip Code)
(678) 580-5661
(Registrant's telephone number, including area code)
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 | ||
| Common Stock, par value $0.025 | ATIS | The NASDAQ Capital Market | ||
| Warrant to purchase Common Stock (expiring January 30, 2022) |
ATISW | The NASDAQ Capital Market |
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.
On August 16, 2019, Attis Industries Inc. (the “Company”), and certain of its affiliates, entered into a Modification and Forbearance Agreement (the “Modification Agreement”) with Highscore Capital LLC (“Highscore”). Under the Modification Agreement, Highscore agreed to forbear from taking any action with respect to any defaults by the Company that may have occurred under the Loan and Security Agreement dated as of May 31, 2019 (the “Loan Agreement”) until August 31, 2019. Pursuant to the Modification Agreement, the Company increased the principal amount under the Loan Agreement by $1,500,000.00 (the “Principal Adjustment”) and is required to pay a fee of $25,000 per week until such date as all amounts payable under the Loan Agreement are paid.
In addition, at any time following the date on which the Company has filed with the Securities Exchange Commission its Quarterly Report on Form 10-Q for the period ended June 30, 2019, Highscore may elect, in its sole and absolute discretion, to require payment of the Principal Adjustment in cash (as originally provided in the Agreement) or to accept, in lieu of cash payment, a number of shares of the Company’s common stock (the “Adjustment Shares”) equal to the quotient obtained by dividing $1,500,000.00 by a price of $1.75 per share; provided that if Attis Ethanol Fulton, LLC intends to pay the Loan Agreement in full prior to the date it matures, Highscore would be provided notice such that it could elect to receive the Adjustment Shares as set forth above, to the extent permitted.
The foregoing description of the Modification Agreement is qualified in its entirety by reference to the text of the Modification Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
| Exhibit Number | Description | |
| 10.1 | Modification and Forbearance Agreement by and among Attis Industries Inc., Ethanol Fulton, LLC, Attis Biofuels, LLC, and Highscore Capital LLC, dated August 15, 2019 | |
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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.
| Attis Industries Inc. | ||
| Date: August 22, 2019 | By: | /s/ Jeffrey Cosman |
| Jeffrey Cosman | ||
| Chief Executive Officer | ||
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Exhibit 10.1
HIGHSCORE CAPITAL LLC
6 Stone Street
New York, New York 10004
August 15, 2019
by email: jcosman@attisind.com
Attis Ethanol Fulton, LLC
12540 Broadwell Road
Suite 2104
Milton, Georgia 30004
Attn.: Jeffrey S. Cosman, Manager
RE: Forbearance and Modification
Gentlemen:
Reference is made to the Loan and Security Agreement dated as of May 31, 2019 among Attis Ethanol Fulton, LLC, Attis Biofuels, LLC, Attis Industries, Inc., Jeffrey S. Cosman and Highscore Capital LLC (the “Agreement”). Capitalized terms, not otherwise defined herein, are used herein as defined in the Agreement.
Events of Default may have occurred and/or may be continuing in connection with Borrower’s obligation to make certain required payments to Lender. As a result of an Event of Default occurring, Lender would have the unconditional presently exercisable right to pursue any and all remedies available under the Agreement and applicable Law. Among other things, the Agreement provides for an increase of $1,500,000.00 in the principal amount of the Loan required to be paid by Borrower (the “Principal Adjustment”). However, as a one-time accommodation for the benefit of Borrower, Lender has agreed to modify the previously applicable Loan payment schedule and, subject to certain conditions, to forbear from exercising its rights and remedies with respect to the specified Events of Default until August 31, 2019, all as more fully set forth (the “Modification”).
In connection with the Modification, at any time following the date on which the Parent has filed with the Securities Exchange Commission its Quarterly Report on Form 10-Q for the period ended June 30, 2019, Lender may elect, in its sole and absolute discretion, to require payment of the Principal Adjustment in cash (as originally provided in the Agreement) or to accept, in lieu of cash payment, a number of shares of Parent’s common stock (the “Adjustment Shares”) equal to the quotient obtained by dividing $1,500,000.00 by $1.75.; provided that if Borrower intends to pay the Loan in full prior to the Maturity Date and Lender would be permitted to elect to receive the Adjustment Shares as set forth above, Borrower shall give written notice to Lender of the proposed date of prepayment at least ten (10) Business Days prior thereto, and Lender shall give written notice to Borrower of its election to receive cash or Adjustment Shares at least five (5) Business Days prior to such date of prepayment; provided further that, if Borrower fails so to prepay the Loan on such date, Lender’s election shall be rescinded and Lender may again elect to receive cash payment of the Purchase Adjustment or the Adjustment Shares prior to the subsequent payment in full of the Loan.
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If Lender so elects to accept the Adjustment Shares, Parent shall issue the Adjustment Shares to Lender (registered in Lender’s name or in the name of Lender’s nominee, as set forth in Lender’s notice) within two (2) Business Days of the receipt of Lender’s notice, and such shares, when issued, shall be duly authorized and validly issued, fully paid and non-assessible, and free and clear of any Lien or adverse claim or right of any third party (other than on account of a Contractual Obligation of Lender).
In addition, in consideration of Lender’s agreement to the Modification, Borrower shall pay to Lender weekly an extension fee in the amount of $25,000.00 per week until such date as all amounts payable under the Agreement, subject to the Modification, due prior to or on such date are fully paid.
Borrower and each other Loan Party, jointly and severally, represent and warrant that each Loan Party has had the opportunity to review this letter agreement with counsel of its own choice and to confer with such counsel with respect to the Modification, and that the Modification, including the issuance of the Adjustment Shares, if applicable, does not, and the performance by the Loan Parties of their respective obligations with respect thereto, will not, violate any Law or any provision of any Loan Party’s Organizational Documents, and do not and will not conflict with or result in any breach of any condition or provision of, or constitute a default under, or create or give rise to any adverse right of termination or cancellation by, or excuse the performance of, any other Person under, any Contractual Obligation to which any Loan Party is a party or to which its assets are subject, or result in the creation or imposition of any Lien upon any of the assets of any Loan Party or have a Material Adverse Effect.
Lender is not hereby waiving any Event of Default or right or remedy Lender may have under the Agreement (and the related emails) or applicable Law and, except as set forth herein, is not amending or modifying the Agreement (or the related emails).
Borrower and each of the other Loan Parties shall execute and deliver such additional agreements, instruments and other documents, and take such other actions, as Lender may request to effect the issuance of the Adjustment Shares, if applicable, and the other transactions related to the Modification.
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Kindly confirm your acceptance of, and agreement with, the foregoing by executing this letter agreement where indicated below and returning it to the undersigned.
| Very truly yours, | ||
| HIGHSCORE CAPITAL LLC | ||
| By: | /s/ Moshe Mintz | |
| Moshe Mintz, Managing Member | ||
| ACCEPTED AND AGREED: | ||
| ATTIS ETHANOL FULTON, LLC | ||
| By: | /s/ Jeffrey S. Cosman | |
| Jeffrey S. Cosman, Manager | ||
| ACKNOWLEDGMENT OF GUARANTORS: | ||
| ATTIS INDUSTRIES, INC. | ||
| By: | /s/ Jeffrey S. Cosman | |
Jeffrey S. Cosman, CEO |
||
| ATTIS BIOFUELS, LLC | ||
| By: | /s/ Jeffrey S. Cosman | |
| Jeffrey S. Cosman, Manager | ||
| /s/ Jeffrey S. Cosman | ||
| Jeffrey S. Cosman | ||
| cc (by email): | Attis Industries, Inc. | |
| jcosman@attisind.com | ||
| Attis Biofuels, LLC | ||
| jcosman@attisind.com | ||
| Jeffrey S. Cosman | ||
| jcosman@attisind.com | ||
| rick@rdregerlaw.com | ||
| Richard J. Dreger, Attorney at Law, P.C. | ||
| 2101 Macy Drive | ||
| Roswell, Georgia 30076 | ||
| Attn.: Richard J. Dreger, Esq. | ||
| mbensinger@mcgrailbensinger.com | ||
| McGrail & Bensinger LLP | ||
| 888-C 8th Avenue #107 | ||
| New York, New York 10019 | ||
| Menachem M. Bensinger, Esq. | ||
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