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): March 20, 2017 (March 14, 2017)
Blue Sphere Corporation
(Exact name of registrant as specified in its charter)
| Nevada | 000-55127 | 98-0550257 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
301 McCullough Drive, 4th Floor, Charlotte, North Carolina 28262
(Address of principal executive offices) (Zip Code)
704-909-2806
(Registrant’s telephone number, including area code)
_____________________________________________________
(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 (see General Instruction A.2. below):
☐ 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))
As used in this Current Report, all references to the terms “we”, “us”, “our”, “Blue Sphere” or the “Company” refer to Blue Sphere Corporation and its wholly-owned subsidiaries, unless the context clearly requires otherwise.
Item 1.01
Entry Into a Material Definitive Agreement
As reported by the Company on our Current Report on Form 8-K filed on October 31, 2016 , on October 25, 2016, the Company completed a private placement of its securities to JMJ Financial (the “Investor”), an “accredited investor” pursuant to Regulation D, Rule 501 of the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to a securities purchase agreement between the parties (the “SPA”), the Company agreed to issue shares of our common stock, $0.001 par value per share (“Common Stock”), equal to 25% of the borrowed Note Principal (“Origination Shares”), a note and warrants, in exchange for up to USD $1,000,000 (the “Note Principal”). The Origination Shares are issuable on the fifth trading day after the pricing of a public offering, but in no event later than April 15, 2017. In accordance with the specified installment schedule, the Company issued to the Investor a non-interest bearing USD $1,053,000 Promissory Note (the “Note”), with a balance reflecting the Note Principal plus an approximate 5% “origination fee” and warrants.
On February 15, 2017, Blue Sphere and the Investor made an amendment to the SPA to include a provision limiting the number of Origination Shares to be issued to a number no greater than 9.99% of the total number of shares of Common Stock issued and outstanding after such issuance. As reported on our Current Report on Form 8-K filed on March 7, 2017, the Company received the third installment of the Note Principal on February 15, 2017 and by letter agreement dated March 1, 2017, the Investor agreed to extend specified milestone dates contained in the events of default under the Note and warrants.
On March 14, 2017, Blue Sphere and the Investor entered into Amendment No. 2 to the SPA and Note (“Amendment No. 2”), to increase the principal loan under the SPA and the Note by USD $500,000, to an aggregate principal amount of up to USD $1,500,000 (the “Amended Principal Loan”). Pursuant to Amendment No. 2, the Company agreed to (i) increase the number of Origination Shares proportionately up to the Amended Principal Loan; (ii) amend the Note to reflect the Amended Principal Loan, plus an aggregate “origination fee” of USD $79,500, for a total Note balance of up to USD $1,579,500; and (iii) issue warrants to purchase shares of Common Stock equal to 100% coverage upon receipt of each payment made by the Investor toward the Amended Principal Loan.
On March 14,2017, we received the fourth installment under the Note in the amount of USD $250,000 and issued a five (5) year warrant to purchase 3,333,333 shares of Common Stock in accordance with the SPA (the “Warrant”). The Warrant is exercisable for five (5) years from the date of issuance, includes an option by which the holder may exercise the Warrant by means of a cashless exercise, and includes weighted-average price adjustment and anti-dilution terms. The exercise price per share of Common Stock under the Warrant will be the lesser of (i) 80% of the per share price of Common Stock in a public offering; (ii) $0.075 per share (the deemed aggregate exercise price); (iii) 80% of the offering price in a public offering; or (iv) the exercise price of any warrants issued in a public offering.
The foregoing description of the Warrant and Amendment No. 2 does not purport to be complete and is qualified in its entirety by reference to the full text of the Warrant and Amendment No. 2 filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
The Company is providing this report in accordance with Rule 135c under the Securities Act, and the notice contained herein does not constitute an offer to sell the Company’s securities, and is not a solicitation for an offer to purchase the Company’s securities. The securities offered have not been registered under the Securities Act, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
Item 3.02
Unregistered Sales of Equity Securities
The information pertaining to the sales of the securities pursuant to the SPA in Item 1.01 is incorporated herein by reference in its entirety.
Item 9.01
Financial Statements and Exhibits.
The following exhibits are furnished as part of this Current Report on Form 8-K:
(d) Exhibits.
10.1
Form of Securities Purchase Agreement, Promissory Note and Common Stock Purchase Warrant. (1)
10.2
*
Filed herewith.
(1)
Incorporated by reference to our Current Report on Form 8-K on October 31, 2016.
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.
| Blue Sphere Corporation | |||
| Dated: March 20, 2017 | By: | /s/ Shlomi Palas | |
| Name: | Shlomi Palas | ||
| Title: | President and Chief Executive Officer | ||
Exhibit 10.2
AMENDMENT #2
TO
THE SECURITIES PURCHASE AGREEMENT AND
TO THE $1,053,000 PROMISSORY NOTE
This Amendment #2, dated March 14, 2017 (this “Amendment”), is by and between Blue Sphere Corporation, a Nevada corporation (the “ Issuer ”) and JMJ Financial (the “ Investor ”) (referred to collectively herein as the “ Parties ”)
WHEREAS, the Issuer and the Investor entered into a Securities Purchase Agreement Document SPA-10212016 (the “ SPA ”) dated as of October 24, 2016, pursuant to which the Issuer issued to the Investor a $1,053,000 Promissory Note (the “ Note ”), a Warrant, and Origination Shares (All capitalized terms not otherwise defined herein shall have the meanings given such terms in the SPA).
WHEREAS, the Issuer and the Investor previously entered into Amendment #1 to the SPA and the Note dated February 15, 2017;
WHEREAS, the Issuer and the Investor previously entered into a Letter Agreement dated March 1, 2017 extending certain deadlines in the Note and in the Warrants issued under the SPA;
WHEREAS, the Investor has paid all $1,000,000 of Consideration to the Issuer under the Note; and
WHEREAS, the Issuer requests that the dollar amount of the Note be increased to permit the Investor to pay additional Consideration to the Issuer under the Note.
NOW, THEREFORE, the Issuer and the Investor agree to amend the SPA and the Note as follows:
1.
Note Amount. The Principal Sum of the Note is hereby increased from $1,053,000 to $1,579,500 and the Consideration is increased to $1,500,000. The first four sentences of the second paragraph of the Note are hereby amended and replaced with the following:
“The Principal Sum is up to $1,579,500 (one million five hundred seventy nine thousand five hundred) plus accrued and unpaid interest and any other fees. The Consideration is $1,500,000 (one million five hundred thousand) payable by wire. The Investor shall pay $750,000 of Consideration in accordance with the attached Funding Schedule in its sole election. The Investor may pay up to an additional $750,000 of Consideration to the Issuer in such amounts and at such dates as the Investor may choose, however, the Issuer has the right to reject any of those payments within 24 hours of receipt of rejected payments.”
2.
SPA Amendments. The reference to a Note aggregate principal amount of $1,053,000 contained in Section 1.1 of the SPA shall be amended to refer to a Note aggregate principal amount of $1,579,500. The reference to a total Consideration amount of $1,000,000 contained in Section 1.4 of the SPA shall be amended to refer to a total Consideration amount of $1,500,000. All references to the SPA or the Note in any of the Transaction Documents, including any Warrants issued after the date of the SPA, shall refer to the SPA, as amended, and to the Note, as amended.
3.
TA Letters. The Issuer agrees that the terms of the irrevocable instruction letter dated October 24, 2016 in which the Issuer irrevocably authorized and instructed ClearTrust, LLC to issue shares of common stock of the Issuer to the Investor without any further action or confirmation by the Issuer upon ClearTrust's receipt from the Investor of a Conversion Notice or Exercise Notice shall apply to the Note as amended and shall apply to all warrants the Issuer has issued to the Investor pursuant to the terms of the SPA as amended. In addition, the Issuer agrees that the terms of the irrevocable instruction letter dated October 24, 2016 in which the Issuer irrevocably authorized and instructed ClearTrust, LLC to issue shares of common stock of the Issuer to the Investor without any further action or confirmation by the Issuer upon ClearTrust's receipt from the Investor of a request for issuance of Origination Shares pursuant to the Issuer's obligations under the SPA shall apply to all requests for issuance of Origination Shares pursuant to the Issuer's obligations under the SPA as amended. If ClearTrust requires the Issuer and/or the Investor to deliver to ClearTrust new irrevocable instruction letters to give effect to the terms of this paragraph, the Issuer agrees that it will cooperate in good faith with the Investor in drafting and executing the new irrevocable instruction letters and any supporting documents required by ClearTrust and the Issuer shall promptly deliver the new irrevocable instruction letters to ClearTrust.
ALL OTHER TERMS AND CONDITIONS OF THE SPA AND THE NOTE, AS PREVIOUSLY AMENDED, REMAIN IN FULL FORCE AND EFFECT.
Please indicate acceptance and approval of this Amendment by signing below:
| /s/ Shlomi Palas | /s/ JMJ Financial | ||
| Shlomi Palas | JMJ Financial | ||
| Blue Sphere Corporation | Its Principal | ||
| Chief Executive Officer | |||