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 13, 2023
MGO Global Inc. |
(Exact name of registrant as specified in its charter) |
Delaware | 001-41592 | 83-1833607 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1515 SE 17th Street, Suite 121/#460596 Fort Lauderdale, Florida |
| 33346 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (347) 913-3316
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 |
Common Stock, $0.00001 par value |
| MGOL |
| The Nasdaq Stock Market LLC |
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 March 13, 2023, MGO Global Inc. (the “Company”) obtained a royalty free, worldwide and exclusive license (the “License”) to the use of certain assets of Stand Co., LLC (“Stand”) for all purposes in exchange for payment of $1.00 by the Company. The License was entered into in connection with a potential acquisition by the Company of the assets related to the License. The term of the License commenced on March 15, 2023 and shall expire on the earlier of: 1) May 12, 2023, or 2) the date when the Company and Stand sign the definitive agreement for the acquisition of the assets.
Licensed assets include all rights to all stock keeping units (“SKU”) of Stand sold under the names: “Roosevelt Premium 25ft Telescoping Flag Pole Kit,” “20FT Telescoping Flag Pole Kit” and “LED Solar Flag Pole Light;” any intellectual property and other intangible property related to SKUs, including but not limited to all rights to a brand name “Stand Flagpoles,” domain and website standflagpoles.com, the Meta pages associated with “Stand Flagpoles” brand name (in Facebook and Instagram); all manufacturer, distributor and customer contracts and relationships for SKUs; marketing materials; any commercialization rights; domain and administrative access to Stand’s Shopify account, Facebook Assets & Accounts; all historical digital and non-digital assets; and customer database since inception.
The foregoing summary does not purport to be complete and is qualified in its entirety by Section 5 of the Letter of Intent dated March 13, 2023, copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
| Exhibits |
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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.
Date: March 17, 2023 | MGO Global Inc. |
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| By: | /s/ Maximiliano Ojeda |
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| Name: | Maximiliano Ojeda |
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| Title: | Chief Executive Officer |
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EXHIBIT 10.1
CONFIDENTIAL LETTER OF INTENT
FOR ACQUISITION OF CERTAIN ASSETS OF STAND CO, LLC
BY MGO GLOBAL INC. (“LOI”)
March 13, 2023
1. Parties | (a) MGO Global Inc., a Delaware corporation with its principal address at 1515 SE 17th Street, Suite 121/#460596, Fort Lauderdale, Florida (“MGO”), or any of MGO’s designated subsidiaries (the “Buyer”); and
(b) Stand CO LLC, a Utah limited liability company with its principal address at 858 S Automall Dr STE 101 American Fork, UT 84003 (“Stand” or the “Seller”). |
2. Acquisition of Certain Assets | (a) Pursuant to the terms and conditions to be set forth in a definitive asset purchase agreement executed and delivered by the Buyer and the Seller (the “Definitive Agreement”), the Seller would sell all of the Assets existing on the Closing Date, free and clear of any claim, liens or liabilities to the Buyer for the Purchase Price (the “Transaction”). The Buyer will not assume any liability of the Seller, other than liabilities expressly agreed to be assumed by the Buyer, including any liabilities arising after the Closing Date under any assigned contracts included in the Assets (the “Assigned Contracts”). The consummation of the Transaction is subject to due diligence, the negotiation and the execution of the Definitive Agreement, including exhibits and schedules thereto, in form and substance satisfactory to each of the Buyer, the Seller and their respective counsel.
(b) As used in this LOI, the following terms will have the meanings ascribed below.
“Assets” means all of the following assets of the Seller: (i) all rights to all stock keeping units (“SKU”) of the Seller and sold under the names: “Roosevelt Premium 25ft Telescoping Flag Pole Kit”, “20FT Telescoping Flag Pole Kit” and “LED Solar Flag Pole Light”, including all SKU fixed and current assets, including accounts receivable (other than Shopify and merchant account balance transfers that are pending as of the date of the commencement of the license period), existing inventory, point of sale equipment and software, files, records, displays and fixtures; (ii) any Intellectual Property and other intangible property related to SKUs, including but not limited to all rights to a brand name “Stand Flagpoles”, domain and website standflagpoles.com, the Meta pages associated with “Stand Flagpoles” brand name (in Facebook and Instagram); (iii) all manufacturer, distributor and customer contracts and relationships for SKUs; (iv) marketing materials; (v) any commercialization rights; (vi) domain and administrative access to Stand’s Shopify account, (vii) Facebook Assets & Accounts, (viii) all historical digital and non-digital assets, (ix) database since inception
“Business” means the Seller’s operations related to the Assets. |
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| “Closing” means the closing of the Transaction.
“Closing Date” means the date on which the Closing occurs, which will be no later than the Expiration Date.
“Expiration Date” means the earlier of: (i) May 12, 2023, or (ii) the date when the Definitive Agreement is signed by the Parties.
“Intellectual Property” means all intellectual property and intellectual property rights owned by the Seller with respect to SKUs and “Stand Flagpoles” brand name including, as applicable, patents, patent applications, trademarks, trademark applications, trade secrets, know-how, copyrights, domain names and websites, product designs and engineering.
“Party” means a party to the LOI, and its permitted assigns and successors. |
3. Purchase Price and Adjustment | The Buyer shall pay to the Seller the total purchase price of up to 150,000 restricted stock units and $400,000 in cash, as described below (the “Purchase Price”) for the Assets, and such payments to be structured as follows:
(a) From 150,000 of restricted stock units of the MGO (“RSUs”) at the Closing, that will vest in accordance with the vesting schedule to be mutually agreed by the Parties in the Definitive Agreement and will be converted into the shares of common stock of MGO upon vesting (“Shares”);
(b) $400,000 in cash, $200,000 of which will be paid on September 30, 2023 and remaining $200,000 of which will be paid on December 31, 2023.
The Purchase Price shall be subject to reduction as set forth in Section 5 below. |
4. Shares | The Seller or its members (if the RSUs or Shares have been distributed to the members of the Seller) will be required to enter into a lock-up agreement with respect to the RSUs and underlying Shares for a period ending January 12, 2024. The Seller or its members (if the RSUs or Shares have been distributed to the members of the Seller) will comply with Rule 144 promulgated by the Securities and Exchange Commission. |
5. License | The Seller hereby grants to MGO a fully-paid, royalty-free, worldwide and exclusive license, access to and the rights to use the Assets for all purposes (“License”), in exchange for payment of $1.00 by the Buyer.
The term of the License shall commence on March 15, 2023 and shall expire on the Expiration Date.
MGO shall have the right to assign the License to any of its subsidiaries at any time without any approval or consent of the Seller.
If the Closing Date has not occurred on or before September 30 2023; (i) unless (x) the Seller has determined not to execute a Definitive Agreement or (y) MGO’s auditors have not agreed that the financial statements of the Business as existing at such time can be audited and reviewed to timely meet MGO’s federal securities laws 8-K filing requirements, MGO shall pay the Seller 10% of any revenues received by MGO from sales on inventory purchased by MGO from the Seller and (ii) the Seller shall repurchase (i) any inventory purchased by MGO from the Seller (“Seller Sold Inventory”) and (ii) all other products under the SKUs purchased by MGO under the terms of the License, in each case, that remains unsold on the Expiration Date at a price equal to MGO’s cost plus any expenses MGO incurred in purchasing such inventory (which are supported by receipts). |
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Agreed and Accepted: |
| Agreed and Accepted: |
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MGO GLOBAL INC. |
| STAND CO LLC |
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By: | /s/ Maximiliano Ojeda |
| By: | /s/ Jason Harward |
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| Name: Maximiliano Ojeda |
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| Name: Jason Harward |
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| Title: Chief Executive Officer |
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| Title: Owner |
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Signature Page to Term Sheet