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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 27, 2014
Red Giant Entertainment, Inc.
(Exact name of registrant as specified in its charter)
Nevada 001-34039 98-0471928
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
614 E. Hwy 50, Suite 235, Clermont, FL 34711
(Address of principal executive offices) (Zip Code)
(866) 926-6427
(Issuer's telephone/facsimile numbers, 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 (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
(17CFR240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFR240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17CFR240.13e-4(c))
EXPLANATORY NOTE
The purpose of this Amendment No. 1 to the Company's Report on Form 8-K dated
January 27, 2014, filed with the Securities and Exchange Commission on January
27, 2014 (the "Form 8-K"), is solely to correct the year on the signature of our
Chief Executive Officer which was inadvertantly shown as 2013. No other changes
have been made to the Form 8-K as originally filed.
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On June 21, 2013, we entered into a Securities Purchase Agreement (the "Typenex
SPA") with Typenex Co-Investment, LLC ("Typenex") under which we concurrently
issued to Typenex a Secured Convertible Promissory Note in principal amount of
$557,500 with an original issue discount of $50,000 plus an additional $7,500 to
cover Typenex's due diligence and legal fees in connection therewith (the
"Typenex Note") in exchange for $100,000 in cash, two secured notes (the
"Secured Buyer Notes") and two unsecured notes (the "Unsecured Buyer Notes";
together with the Secured Buyer Notes, the "Buyer Notes").
The Typenex Note is secured by the Buyer Notes. The Buyer Notes are each dated
concurrently with the Typenex SPA and are each in the principal amount of
$100,000 and bear interest at the rate of 5% per annum. Unless we fail to meet
certain conditions related to our common stock and representations and
warranties given in the Typenex Note, the Secured Buyer Notes are due and
payable seven and nine months, respectively, after the issuance of the Typenex
Note, and the Unsecured Buyer notes are due and payable 11 and 13 months after
the issuance of the Typenex Note. Otherwise, each of the Buyer Notes matures two
months following the maturity of the Typenex Note. Each of the Buyer Notes may
be prepaid in Typenex's discretion. The Secured Buyer Notes are secured by that
certain Membership Interest Pledge Agreement (the "Typenex Pledge Agreement")
dated concurrently with the Typenex SPA under which Typenex has pledged a 40%
membership interest in Typenex Medical, LLC, an Illinois limited liability
company; provided, however, that Typenex may substitute collateral with a fair
market value not less than the aggregate principal balance of the Buyer Notes.
Payment of the Typenex Note is made on a monthly basis beginning six months
after the date we received the initial $100,000 in cash in the amount of
$34,843.75 per month plus all unpaid interest and other costs, fees or charges
under the Note for each month in which a tranche of the Typenex Note is
convertible (as discussed below). Payment may be made in cash or in shares of
our common stock or any combination of cash and shares; provided, however, that
we may only pay in cash if we fail to meet certain conditions related to our
common stock and representations and warranties given in the Typenex Note. We
may prepay the Typenex Note with a payment of 125% of the outstanding balance
(including interest and other fees and amounts due).
Interest accrues at the rate of 8% per annum. If we fail to repay the Typenex
Note when due, or if other events of default thereunder apply, a default
interest rate of 22% per annum will apply. In addition, if we fail to issue
stock to Typenex within three trading days of receipt of a notice of conversion,
we must pay a penalty equal to the greater of (i) $2,000 per day; or (ii) 2% of
the product of (A) the number of shares to which Typenex was entitled that were
not issued on a timely basis; and (B) the closing sale price of the common stock
on the trading day immediately preceding the last day for us to timely issued
the shares.
The Typenex Note is convertible into shares of our common stock in five tranches
consisting of an initial tranche of $157,500 plus interest and other fees and
amounts due and four tranches of $100,000 plus interest and other fees and
amounts due, with conversion of the last four tranches conditioned upon payment
in full of the Buyer Note corresponding to such tranche. The Typenex Note is
convertible at a price equal to the average of the daily closing bid prices for
the 15 days immediately prior to the six-month anniversary of the Typenex Note.
Under and concurrently with the Typenex SPA, we also issued to Typenex a warrant
(the "Typenex Warrant") to purchase the number of shares equal to $557,500
divided by the product of (i) the average of the three lowest VWAPs in the 20
trading days preceding June 21, 2013 and (ii) 65% of the three lowest VWAPs (60%
if the three lowest VWAPs were lower than $0.005) at a price of $0.015 per
share. The Typenex Warrant may also be exercised by cashless exercise.
This conversion price of the Typenex Note, the exercise price of the Typenex
Warrant, and the number of shares of our common stock subject to the Typenex
Warrant are subject to adjustment for issuance of securities with a lower
issuance price (as defined in the Typenex Note). Unless Typenex gives us
61calendar days written notice to the contrary, however, Typenex may not convert
the Typenex Note or exercise the Typenex Warrants in an amount which would cause
Typenex to own more than 4.99%, or if our market capitalization (as defined in
the Typenex Note) is less than $10,000,000, more than 9.99%, of our outstanding
common stock.
Under the Typenex SPA, we must pay a penalty of $100 per $10,000 in outstanding
principal per trading day that we are late in filing any information required to
be filed by us up to ten days, and $200 per day for each trading day after ten
days that we are late. Under the Typenex SPA, we also must pay $100 per $10,000
in outstanding principal per trading day past three business days that we do not
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issue shares of common stock upon conversion of the Typenex Note up to ten days,
and $200 per day for each trading day after ten days that we are late, and may
be required to pay additional fees if Typenex purchases shares on the open
market in order to make delivery in satisfaction of a sale of our shares by
Typenex.
Under the Typenex SPA, we are also required to periodically post the
then-current number of issued and outstanding shares of our common stock on our
webpage at otcmarkets.com if we fail to maintain a market capitalization of
$10,000,000 or greater, or pay a late fee for each calendar day we fail to
comply with such obligation.
We have granted piggyback registration rights for shares issuable under the
Typenex Note and the Typenex Warrant.
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.03 - CREATION OF A DIRECT FINANCIAL OBLIGATION
See description of the Typenex Note above.
SECTION 3 - SECURITIES AND TRADING MARKETS
ITEM 3.02 - UNREGISTERED SALES OF EQUITY SECURITIES
See description of the Typenex Note and the Typenex Warrant above. The Typenex
Note and Typenex Warrant were issued to Typenex pursuant to the exemption from
registration set forth in Section 4(2) of the Securities Act of 1933. Typenex
represented to us that it is an accredited investor. We believe that Typenex had
adequate information about us as well as the opportunity to ask questions and
receive responses from our management.
SECTION 8 - OTHER EVENTS
ITEM 8.01 - OTHER EVENTS
We have terminated our relationship with Holladay Stock Transfer and have
retained Pacific Stock Transfer Company to act as transfer agent for our shares
of common stock, par value $0.0001 per share.
SECTION 9 - EXHIBITS
ITEM 9.01 - EXHIBITS
Exhibit
Number Description
------ -----------
99.1 Securities Purchase Agreement between the Registrant and Typenex
Co-Investment, LLC dated June 21, 2013.
99.2 Secured Convertible Promissory Note between the Registrant and Typenex
Co-Investment, LLC dated June 21, 2013.
99.3 Warrant to Purchase Shares of Common Stock between the Registrant and
Typenex Co-Investment, LLC dated June 21, 2013.
99.4 Secured Buyer Note #1 between Typenex Co-Investment, LLC and the
Registrant dated June 21, 2013.
99.5 Secured Buyer Note #2 between Typenex Co-Investment, LLC and the
Registrant dated June 21, 2013.
99.6 Buyer Note #3 between Typenex Co-Investment, LLC and the Registrant
dated June 21, 2013.
99.7 Buyer Note #4 between Typenex Co-Investment, LLC and the Registrant
dated June 21, 2013.
99.8 Membership Interest Pledge Agreement between the Registrant and Typenex
Co-Investment, LLC dated June 21, 2013.
99.9 Security Agreement between the Registrant and Typenex Co-Investment,
LLC dated June 21, 2013.
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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.
Red Giant Entertainment, Inc.
Date: January 27, 2014 /s/ Benny R. Powell
--------------------------------------
By: Benny R. Powell
Its: Chief Executive Officer, President,
Chief Financial Officer, and Secretary
