Item 1.01 Entry into a Material Definitive Agreement.
Convertible Promissory Note with Vis Vires Group
On September 24, 2015, Jammin Java Corp. (the "Company", "we" and "us") sold Vis
Vires Group, Inc. ("Vis Vires") a Convertible Promissory Note (with an issuance
date of September 9, 2015) in the principal amount of $254,000 (the "Vis Vires
Convertible Note"), pursuant to a Securities Purchase Agreement, dated September
9, 2015. The Vis Vires Convertible Note bears interest at the rate of 8% per
annum (22% upon an event of default) and is due and payable on June 11, 2016.
The Vis Vires Convertible Note provides for standard and customary events of
default such as failing to timely make payments under the Vis Vires Convertible
Note when due and the failure of the Company to timely comply with Securities
Exchange Act of 1934, as amended, reporting requirements. Additionally, upon the
occurrence of certain fundamental defaults, as described in the Vis Vires
Convertible Note, we are required to repay Vis Vires liquidated damages in
addition to the amount owed under the Vis Vires Convertible Note.
The principal amount of the Vis Vires Convertible Note and all accrued interest
is convertible at the option of the holder thereof into our common stock at any
time following the 180th day after the Vis Vires Convertible Note was issued.
The conversion price of the Vis Vires Convertible Note is equal to the greater
of (a) 65% (a 35% discount) multiplied by the average of the lowest five closing
bid prices of our common stock during the ten trading days immediately prior to
the date of any conversion; and (b) $0.00009, provided that the conversion price
during major announcements (as described in the Vis Vires Convertible Note) is
the lower of the conversion price on the announcement date of such major
announcement and the conversion price on the date of conversion. In the event we
fail to deliver the shares of common stock issuable upon conversion of the note
within three business days of our receipt of a conversion notice, we are
required to pay Vis Vires $2,000 per day for each day that we fail to deliver
such shares. The Vis Vires Convertible Note conversion price also includes
anti-dilution protection such that in the event we issue or are deemed to have
issued common stock or convertible securities at a price equal to less than the
conversion price of the Vis Vires Convertible Note in effect on the date of such
issuance or deemed issuance, the conversion price of the Vis Vires Convertible
Note is automatically reduced to such lower price, subject to certain exceptions
in the note, including an exemption for persons whom whom the Company was in
discussions regarding an investment at the time the Vis Vires Convertible Note
was entered into and officer and employee issuances/grants.
At no time may the Vis Vires Convertible Note be converted into shares of our
common stock if such conversion would result in Vis Vires and its affiliates
owning an aggregate of in excess of 9.99% of the then outstanding shares of our
We may prepay in full the unpaid principal and interest on the Vis Vires
Convertible Note, upon notice, any time prior to the 180th day after the
issuance date. Any prepayment is subject to payment of a prepayment amount
ranging from 108% to 133% of the then outstanding balance on the Vis Vires
Convertible Note (inclusive of accrued and unpaid interest and any default
amounts then owing), depending on when such prepayment is made.
The Vis Vires Convertible Note also contains customary positive and negative
We paid $4,000 of Vis Vires's attorney's fees in connection with the sale of the
Vis Vires Convertible Note.
The goal is for the Company to utilize this debt and similar debt incurred in
the past several weeks as growth capital to help accelerate projects that
generate revenue. We hope to repay the Vis Vires Convertible Note prior to any
conversion. In the event that the Vis Vires Note is not repaid in cash in its
entirety, Company shareholders may suffer dilution if and to the extent that the
balance of the Vis Vires Note is converted into common stock.
The description of the Vis Vires Convertible Note and Subscription Agreement
above is not complete and is qualified in its entirety by the full text of the
Convertible Note and Subscription Agreement, filed herewith as Exhibits 10.2 and
10.1, respectively, which are incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
On September 24, 2015, we sold Vis Vires the Vis Vires Convertible Note. The
note is convertible into our common stock at a discount to the trading price of
our common stock as described in greater detail above. We claim an exemption
from registration for the issuance of such convertible note pursuant to Section
4(a)(2) and/or Rule 506 of Regulation D of the Securities Act of 1933, as
amended (the "Securities Act"), since the foregoing issuance did not involve a
public offering, the recipient was (i) an "accredited investor"; and/or (ii) had
access to similar documentation and information as would be required in a
Registration Statement under the Securities Act, and the recipient acquired the
securities for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof. The securities were
offered without any general solicitation by us or our representatives. No
underwriters or agents were involved in the foregoing issuance and we paid no
underwriting discounts or commissions. The securities sold are subject to
transfer restrictions, and the certificates evidencing the securities contain an
appropriate legend stating that such securities have not been registered under
the Securities Act and may not be offered or sold absent registration or
pursuant to an exemption therefrom. The securities were not registered under the
Securities Act and such securities may not be offered or sold in the United
States absent registration or an exemption from registration under the
Securities Act and any applicable state securities laws.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
10.1* Securities Purchase Agreement dated September 9, 2015, by and between
Jammin Java Corp. and Vis Vires Group, Inc.
10.2* $254,000 Convertible Promissory Note dated September 9, 2015, by Jammin
Java Corp. in favor of Vis Vires Group, Inc.
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