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 reported): May 15, 2009
WELLSTAR INTERNATIONAL, INC.
(Exact
name of registrant as specified in charter)
Nevada
|
333-130295
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20-1834908
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(State or Other Jurisdiction
of Incorporation or Organization)
|
(Commission
File Number)
|
(IRS
Employer Identification
No.)
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6911
Pilliod Road
Holland,
Ohio 43528
(Address
of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code:
(419) 865-0069
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):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01
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Entry
Into A Material Definitive Agreement
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Item
2.03
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Creation
of a Direct Financial Obligation.
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Item
3.02
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Unregistered
Sales of Equity Securities.
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Item 5.03
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Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
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Convertible Debenture
Financing
On May
15, 2009, Wellstar International, Inc. ("Wellstar" or the
"Company") entered into a Securities Purchase Agreement with AJW Partners, LLC
("Partners"), AJW Partners II, LLC ("Partners II
"), AJW Master Fund, Ltd. ("Master"), AJW Master Fund II, Ltd.
("Master II") and New Millennium Capital Partners, II,
LLC ("Millennium" and collectively with Partners, Partners II, Master
and Maser II, the “Purchasers”) for the sale of 13% secured convertible notes in
an aggregate principal amount of up to $79,500 (the "Notes"). The
Purchasers closed on $22,000 in Notes on May 18, 2009.
The Notes bear interest at
the rate of 13%
per annum. Interest is payable
monthly, unless the Company's common stock is greater than $0.045 per share for
each trading day of a month, in which event no interest is
payable during such month. Any interest not paid when due
shall bear interest of 15% per annum from the date due until the same is
paid. The Notes mature three years from the date
of
issuance, and are convertible into common stock, at the
Purchasers' option, at the lesser of (i) $0.12 or (ii) a
75% discount to the average of the three lowest
trading prices of the common stock during the 20 trading day period prior
to conversion. The Notes contain a
call option whereby, if the
Company's stock price is below $0.045, the
Company may prepay the outstanding principal amount of the
Notes, subject to the conditions set forth in the call
option. The Notes also contain a partial call option
whereby, if the Company's stock price is below $0.045, the
Company may prepay a portion of the outstanding principal amount of the Note,
subject to the conditions set forth in the partial call option.
The full
principal amount of Notes are due upon a default under the terms of the
secured convertible notes. In
addition, the Company granted the Purchasers a
security interest in substantially all of the Company's assets and
intellectual property. The Company is required to file
a registration statement with the Securities
and Exchange Commission upon demand, which will include the common stock
underlying the Notes.
The
conversion price of the Notes may be adjusted in
certain circumstances such as if the Company pays a stock dividend,
subdivides or combines outstanding shares
of common stock into a greater or lesser number of shares, or takes
such other action as would otherwise result in dilution of the selling
stockholder's position.
The Purchasers have
agreed to restrict their ability to convert their Notes and receive shares of
common stock such that the number of shares of common stock held by
them in the aggregate and their affiliates
after such conversion or exercise does not exceed 4.99% of
the then issued and outstanding shares of common stock.
The Company claims
an exemption from
the registration requirements of the
Securities Act of 1933, as amended (the "Act")
for the private placement of
these securities pursuant to Section 4(2)
of the Act and/or Regulation D
promulgated there under since, among
other things, the transaction did
not
involve a
public offering, the Purchasers were
accredited Purchasers and/or
qualified institutional buyers, the Purchasers had access
to information about the Company and
their investment, the Purchasers took
the securities for investment and not resale, and the
Company took appropriate measures to restrict the transfer of the
securities.
Series A Preferred
Stock
On May
20, 2009, the Company entered into a conversion agreement with John Antonio
(“Antonio”) and Kenneth McCoppen (“McCoppen”), both executive officers and
directors of the Company, pursuant to which the Company agreed to convert
$30,000 in outstanding wages owed to each McCoppen and Antonio into a total of
60,000 shares of Series A Preferred Stock.
The above
transactions were approved by the Board of Directors of the
Company. The Series A Preferred Stock does not pay dividends but each
holder of Series A Preferred Stock shall be entitled to 100 votes for each share
of common stock that the Series A Preferred Stock shall be convertible
into. The Series A Preferred Stock has a conversion price of $0.0014
(the “Conversion Price”) and a stated value of $1.00 (the “Stated
Value”). Each share of Series A Preferred Stock is convertible, at
the option of the holder, into such number of shares of common stock of the
Company as determined by dividing the Stated Value by the Conversion
Price. The Series A Preferred Stock has no liquidation
preference.
The
issuance of the Series A Preferred Stock was made in reliance upon exemptions
from registration pursuant to Section 4(2) under the Securities Act of 1933 and
Rule 506 promulgated under Regulation D thereunder. The holders of
Series A Preferred Stock are accredited investors as defined in Rule 501 of
Regulation D promulgated under the Securities Act of 1933.
Increase to
Authorized
On May
21, 2009, the Company amended its certificate of incorporation to increase its
authorized shares of common stock from 1,700,000,000 to 10,000,000,000 (the
“Increase Amendment”). The amendment of the certificate of incorporation was
approved by the board of directors as well as the shareholders holding a
majority of the issued and outstanding voting shares (the “Majority
Shareholders”) of the Company.
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
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Description
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3.1
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Certificate
of Amendment to the Certificate of Incorporation
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3.2
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Amendment
to Certificate of Designation – Series A Preferred Stock
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3.3
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Certificate
of Correction to the Amendment to Certificate of Designation – Series
A
Preferred
Stock
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4.1
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Securities Purchase Agreement, dated May
15, 2009, by and among
the
Company and the Purchasers
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4.2
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Form
of Callable Secured Convertible Note
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4.3
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Registration
Rights Agreement
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4.4
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Security
Agreement
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4.5
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Intellectual
Property Security Agreement
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4.6
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Subsidiary
Guarantee
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10.1
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Conversion
Agreement between the Company and John
Antonio
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10.2
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Conversion
Agreement between the Company and Ken
McCoppen
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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.
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WELLSTAR
INTERNATIONAL, INC.
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Date:
May 21, 2009
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By:
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/s/ John
Antonio
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Name:
John Antonio
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Title:
CEO
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