UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): June 10, 2016
Commission File Number 000-54530
GOPHER PROTOCOL INC.
(Exact name of small business issuer as specified in its charter)
| Nevada | 27-0603137 |
| (State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.) |
| organization) |
23129 Cajalco Road , Perris, CA 92570
(Address of principal executive offices)
888-685-7336
(Issuer’s telephone number)
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 Instructions 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))
| Item 1.01 | Entry into a Material Definitive Agreement |
| Item 3.02 | Unregistered Sales of Equity Securities |
On June 10, 2016, Gopher Protocol Inc. (the “Company”) entered into a consulting agreement (the "Agreement") with Waterford Group LLC ("Waterford") pursuant to which the Company engaged Waterford to provide sales and marketing consulting and advisory services to the Company in consideration of 100,000 shares of restricted common stock of the Company (the "Shares") and a common stock purchase warrant (the "Warrant") to acquire 750,000 shares of restricted common stock of the Company at an exercise price of $2.25 per share for a period of five (5) years. 50,000 of the Shares were issued to Waterford upon the execution of the Agreement, which such initial shares cover Q2 2016, and 12,500 of the Shares will be issued to the Waterford on a quarterly basis thereafter. The Warrant vests on a quarterly basis in eight (8) equal quarterly installments each in the amount of 93,750 shares during the term of the Agreement. The first quarterly installment vested upon the execution of the Agreement and covers Q2 2016 and each subsequent quarterly installment vests each quarter thereafter.
The Company claims an exemption from the registration requirements of the Securities Act of 1933 (the “Securities Act”) for the issuances of the above securities pursuant to Section 4(2) of the Securities Act and/or Regulation D promulgated thereunder. Waterford is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Securities Act.
The foregoing information is a summary of each of the agreements involved in the transactions described above, is not complete, and is qualified in its entirety by reference to the full text of those agreements, each of which is attached an exhibit to this Current Report on Form 8-K. Readers should review those agreements for a complete understanding of the terms and conditions associated with this transaction.
| Item 9.01 | Financial Statements and Exhibits |
(c) Exhibits.
|
Exhibit
Number |
Description | |
| 10.1 | Consulting Agreement dated June 10, 2016, by and between Gopher Protocol Inc. and Waterford Group LLC | |
| 4.1 | Common Stock Purchase Warrant |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GOPHER PROTOCOL INC. | |
| By:/s/ Michael Murray | |
| Name: Michael Murray | |
| Title: CEO, President, Secretary, | |
| Treasurer and Director |
| Date: | June 13, 2016 |
| Perris, California |
Exhibit 4.1
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS") AND SHALL NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER HAS BEEN REGISTERED UNDER THE SECURITIES ACT AND STATE ACTS, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
COMMON STOCK PURCHASE WARRANT
| Warrant No. WF-01 | Number of Shares: 93,750 |
GOPHER PROTOCOL INC.
COMMON STOCK, PAR VALUE $.00001 PER SHARE
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME
JUNE 18, 2021
This Warrant is issued to WATERFORD GROUP, LLC ("Holder") by GOPHER PROTOCOL INC., a Nevada corporation (hereinafter with its successors called the "Company").
For value received and subject to the terms and conditions hereinafter set out, Holder is entitled to purchase from the Company at a purchase price per share of $2.25, NINETY THREE THOUSAND SEVEN HUNDRED FIFTY (93,750) fully paid and non-assessable shares of common stock, par value $.00001 per share ("Common Shares") of the Company. Such purchase price per Common Share, adjusted from time to time as provided herein, is referred to as the "Purchase Price."
1. The Holder may exercise this Warrant, in whole or in part, upon surrender of this Warrant, with the exercise form annexed hereto duly executed, at the office of the Company, or such other office as the Company shall notify the Holder in writing, together with a certified or bank cashier's check payable to the order of the Company in the amount of the Purchase Price times the number of Common Shares being purchased.
2. The person or persons in whose name or names any certificate representing Common Shares is issued hereunder shall be deemed to have become the holder of record of the Common Shares represented thereby as of the close of business on the date on which this Warrant is exercised with respect to such shares, whether or not the transfer books of the Company shall be closed. Until such time as this Warrant is exercised or terminates, the Purchase Price payable and the number and character of securities issuable upon exercise of this Warrant are subject to adjustment as hereinafter provided.
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3. Unless previously exercised, this Warrant shall expire at 5:00 p.m. Eastern Standard Time, on June 18, 2021 , and shall be void thereafter.
4. The Company covenants that it will at all times reserve and keep available a number of its authorized Common Shares, free from all preemptive rights, which will be sufficient to permit the exercise of this Warrant. The Company further covenants that such shares as may be issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and non-assessable and free from all taxes, liens, and charges.
5. If the Company subdivides its outstanding Common Shares, by split-up or otherwise, or combines its outstanding Common Shares, the Purchase Price then applicable to shares covered by this Warrant shall forthwith be proportionately decreased in the case of a subdivision, or proportionately increased in the case of a combination.
6. In no event shall any fractional Common Share of the Company be issued upon any exercise of this Warrant. If, upon exercise of this Warrant as an entirety, the Holder would, except as provided in this Section 8, be entitled to receive a fractional Common Share, then the Company shall issue the next higher number of full Common Shares, issuing a full share with respect to such fractional share. If this Warrant is exercised at one time for less than the maximum number of Common Shares purchasable upon the exercise hereof, the Company shall issue to the Holder a new warrant of like tenor and date representing the number of Common Shares equal to the difference between the number of shares purchasable upon full exercise of this Warrant and the number of shares that were purchased upon the exercise of this Warrant.
7. Whenever the Purchase Price is adjusted, as herein provided, the Company shall promptly deliver to the Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
8. The Company will maintain a register containing the names and addresses of the Holder and any assignees of this Warrant. Holder may change its address as shown on the warrant register by written notice to the Company requesting such change. Any notice or written communication required or permitted to be given to the Holder may be delivered by confirmed facsimile or telecopy or by a recognized overnight courier, addressed to Holder at the address shown on the warrant register.
9. This Warrant has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws ("State Acts") or regulations in reliance upon exemptions under the Securities Act, and exemptions under the State Acts. Subject to compliance with the Securities Act and State Acts, this Warrant and all rights hereunder are transferable in whole or in part, at the office of the Company at which this Warrant is exercisable, upon surrender of this Warrant together with the assignment hereof properly endorsed.
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10. In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company may issue a new warrant of like tenor and denomination and deliver the same (a) in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or (b) in lieu of any Warrant lost, stolen, or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft or destruction of such Warrant (including a reasonably detailed affidavit with respect to the circumstances of any loss, theft, or destruction) and of indemnity with sufficient surety satisfactory to the Company.
11. Unless a current registration statement under the Securities Act, shall be in effect with respect to the securities to be issued upon exercise of this Warrant, the Holder, by accepting this Warrant, covenants and agrees that, at the time of exercise hereof, and at the time of any proposed transfer of securities acquired upon exercise hereof, the Company may require Holder to make such representations, and may place such legends on certificates representing the Common Shares issuable upon exercise of this Warrant, as may be reasonably required in the opinion of counsel to the Company to permit such Common Shares to be issued without such registration.
12. This Warrant does not entitle Holder to any of the rights of a stockholder of the Company.
13. Nothing expressed in this Agreement and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties to this Agreement any covenant, condition, stipulation, promise, or agreement contained herein, and all covenants, conditions, stipulations, promises and agreements contained herein shall be for the sole and exclusive benefit of the parties hereto and their respective successors and assigns.
14. The provisions and terms of this Warrant shall be construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company as of June 10, 2016
| GOPHER PROTOCOL INC. | ||
| By: | /s/Michael Murray | |
| Name: Michael Murray | ||
| Title: CEO | ||
| 3 |
FORM OF EXERCISE
Date: ____________________
| To: | [ ] |
The undersigned hereby subscribes for _______ shares of common stock of Gopher Protocol Inc. covered by this Warrant and hereby delivers $___________ in full payment of the purchase price thereof. The certificate(s) for such shares should be issued in the name of the undersigned entity or as otherwise indicated below:
| Waterford Group, LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
| Name for Registration, if different | |
| Street Address | |
| City, State and Zip Code | |
| Tax ID Number |
Exhibit 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered into effective the 10th day of June, 2016, by and between Waterford Group LLC (the “Consultant”), whose principal place of business is 18865 State Road 54, Suite 110, Lutz, FL 33558, and Gopher Protocol Inc (the “Client”), whose principal place of business is 23129 Cajalco Road , Perris, CA 92570.
WHEREAS , Consultant is an independent sales representative and is in the business of providing sales and marketing services; and
WHEREAS , the Client deems it to be in its best interest to retain Consultant to render to the Client such services as may be needed; and
WHEREAS , Consultant is ready, willing and able to render such consulting and advisory services to Client.
NOW THEREFORE , in consideration of the mutual promises and covenants set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Consulting Services. The Client desires to engage Consultant in connection with the Services (as defined below). In consultation with management of the Client, Consultant shall serve as an independent Sales and Marketing Representative for Client to provide sales and marketing services on behalf of Client in such capacity and/or perform such other duties as shall be directed by the Client (collectively, the "Services"). In performing the Services, Consultant shall report to such person as may, from time to time, be designated by the Client’s chief executive officer. Consultant shall not have any authority to execute contracts or make any commitments on behalf of the Client. Consultant accepts the engagement provided in this Agreement and agrees to perform the Services in a professional manner, diligently, in good faith, in a manner consistent with the best interests of the Client.
It is acknowledged and agreed by the Client that Consultant carries no professional licenses, and is not rendering legal advice or performing accounting services, nor acting as an investment advisor or brokerage/dealer within the meaning of the applicable state and federal securities laws. The services of Consultant shall not be exclusive to Client nor shall Consultant be required to render any specific number of hours or assign specific personnel to the Client or its projects.
2. Independent Contractor . Consultant agrees to perform the Services hereto as an independent contractor. Nothing contained herein shall be considered to as creating an employer-employee relationship between the parties to this Agreement. The Client shall not make social security, worker’s compensation or unemployment insurance payments on behalf of Consultant. The parties hereto acknowledge and agree that Consultant cannot guarantee the results or effectiveness of any of the services rendered or to be rendered by Consultant. Rather, Consultant shall conduct its operations and provide its services in a professional manner and in accordance with good industry practice. Consultant will use its best efforts and does not promise results.
3. Time, Place and Manner of Performance . The Consultant shall be available for advice and counsel to the officers and directors of the Client as such reasonable and convenient times and places as may be mutually agreed upon. Except as aforesaid, the time, place and manner of performance of the services hereunder, including the amount of time to be allocated by the Consultant to any specific service, shall be determined at the sole discretion of the Consultant.
4. Term; Termination of this Agreement . The Term of this Agreement shall be for a period of two (2) years (the “Term”). Client may terminate this Agreement at any time and all responsibilities of Client shall be immediately terminated as of such date.
5. Compensation . In consideration of providing the Services, Consultant shall receive the following consideration:
(a) A common stock purchase warrant to acquire 750,000 shares of common stock of the Client at an exercise price of $2.25 per share for a period of five (5) years (the "Warrant"). The Warrant shall vest on a quarterly basis in eight (8) equal quarterly installments each in the amount of 93,750 shares during the Term. The first quarterly installment shall vest upon the execution of this Agreement, shall cover the second quarter of 2016 and shall be issued upon the execution of this Agreement. Each subsequent quarterly installment shall vest each quarter thereafter, on the first day of each quarter during the Term. In the event the Agreement is terminated by the Client prior to the end of the Term, any unvested shares underlying the Warrant shall not vest to Consultant and shall be terminated; and
(c) 100,000 shares of restricted common stock of the Client (the "Shares") to be issued to Consultant, in aggregate, pursuant to the following schedule: Consultant shall receive 50,000 of the Shares for the second quarter of 2016 upon the execution of this Agreement and 12,500 of the Shares shall be issued to Consultant each quarter thereafter, on the first day of each calendar quarter during the Term.
6. Accredited Investor Status . Consultant represents that it is an accredited investor as that term is defined by Regulation D as promulgated under the Securities Act of 1933, as amended (the “Act”), and all compensation in the form of securities of the Client issued to Consultant under Section 5 of this Agreement shall be issued under Section 4(2) of the Act.
7. Work Product . It is agreed that all information and materials produced for the Client shall be the property of the Client, free and clear of all claims thereto by the Consultant.
8. Confidentiality . The Consultant recognizes and acknowledges that it has and will have access to certain confidential information of the Client and its affiliates that are valuable, special and unique assets and property of the Client and such affiliates. The Consultant will not, during the term of this Agreement, disclose, without the prior written consent or authorization of the Client, any of such information to any person, for any reason or purpose whatsoever. In this regard, the Client agrees that such authorization or consent to disclose may be conditioned upon the disclosure being made pursuant to a secrecy agreement, protective order, provision of statute, rule, regulation or procedure under which the confidentiality of the information is maintained in the hands of the person to whom the information is to be disclosed or in compliance with the terms of a judicial order or administrative process.
9. Conflict of Interest; Non-Competition . The Consultant shall be free to perform services for other persons who are not in competition with the principal business activities of the Client. The Consultant will notify the Client of its performance of consultant services for any other person, which could potentially conflict with its obligations under the Agreement. Upon receiving such notice, the Client may give 15-day written notice of its intent to terminate this Agreement pursuant to Section 7 of this Agreement, or consent to the Consultant’s outside consulting activities; failure to provide notice of intent to terminate this Agreement within 30 business days of receipt of written notice of potential conflict shall constitute the Client’s ongoing consent to the Consultant’s outside consulting services.
10. Disclaimer of Responsibility for Act of the Client . In no event shall Consultant be required by this Agreement to represent or make management decisions for the Client. Consultant shall under no circumstances be liable for any expense incurred or loss suffered by the Client as a consequence of such decisions, made by the Client or any affiliates or subsidiaries of the Client.
11. Indemnification.
| A. | The Client shall protect, defend, indemnify and hold Consultant and its assigns and attorneys, accountants, employees, officers and director harmless from and against all losses, liabilities, damages, judgments, claims, counterclaims, demands, actions, proceedings, costs and expenses (including reasonable attorneys’ fees) of every kind and character resulting from, relating to or arising out of (i) the inaccuracy, non-fulfillment or breach of any representation, warranty, covenant or agreement made by the Client herein, (ii) negligent or willful misconduct, occurring during the term thereof with respect to any of the decisions made by the Client. | |
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B. | The Consultant shall protect, defend, indemnify and hold Client and its assigns and attorneys, accountants, employees, officers and director harmless from and against all losses, liabilities, damages, judgments, claims, counterclaims, demands, actions, proceedings, costs and expenses (including reasonable attorneys’ fees) of every kind and character resulting from, relating to or arising out of (i) the inaccuracy, non-fulfillment or breach of any representation, warranty, covenant or agreement made by the Consultant herein, or (ii) negligent or willful misconduct, occurring during the term thereof with respect to any of the decisions made by the Consultant. |
12. Notices . Any notices required or permitted to be given under this Agreement shall be sufficient if in writing and delivered or sent by registered or certified mail, or by Federal Express or other recognized overnight courier to the principal office of each party.
13. Waiver of Breach . Any waiver by either party or a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by any party.
14. Assignment. This Agreement and the right and obligations of the Consultant hereunder shall not be assignable without the written consent of the Client.
15. Applicable Law . It is the intention of the parties hereto that this Agreement and the performance hereunder and all suits and special proceedings hereunder be construed in accordance with and under and pursuant to the laws of the State of California and that in any action, special proceeding or other proceedings that may be brought arising out of, in connection with or by reason of this Agreement, the law of the State of California shall be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction on which any action or special proceeding may be instituted.
16. Severability . All agreements and covenants contained herein are severable, and in the event any of them shall be held to be invalid by any competent court, the Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein.
17. Entire Agreement . This Agreement constitutes and embodies the entire understanding and agreement of the parties and supersedes and replaces all other or prior understandings, agreements and negotiation between the Parties.
18. Waiver and Modification . Any waiver, alteration, or modification of any of the provisions of this Agreement shall be valid only if made in writing and signed by the parties hereto. Each party hereto, may waive any of its rights hereunder without affecting a waiver with respect to any subsequent occurrences or transactions hereof.
19. Binding Arbitration . Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall be conducted in Riverside County, California.
20. Counterparts and Facsimile Signature . This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party. Such facsimile copies shall constitute enforceable original documents.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF , the parties hereto have duly executed and delivered this Agreement, effective as of the date set forth above.
CONSULTANT:
WATERFORD GROUP LLC
| By: | /s/Peter Berkman | |
| Name: Peter Berkman | ||
| Title: Managing Member | ||
| CLIENT: | ||
| GOPHER PROTOCOL, INC. | ||
| By: | /s/Michael Murray | |
| Name: Michael Murray | ||
| Title: CEO | ||
| PAYMENT INSTRUCTIONS: | ||
| Waterford Group, LLC | ||
| c/o Peter Berkman, Esq. | ||
| 18865 SR 54 # 110 | ||
| Lutz, FL 33558 | ||