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): May 18, 2015
ABAKAN INC.
(Exact name of registrant as specified in its charter)
Nevada
000-52784
98-0507522
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
2665 S. Bayshore Drive, Suite 450, Miami, Florida 33133
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code:(786) 206-5368
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))
1
ITEM 1.01
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On May 19, 2015, Abakan Inc. (“Company”) entered into a Settlement Agreement (“Settlement”) with
Sonoro Invest S.A. (“Sonoro”), in connection with a dispute that arose under certain amended convertible
promissory notes and a promissory note for an aggregate principal amount of $2,105,000, which caused
Sonoro to file a lawsuit against Abakan on October 1, 2014 in the United States District Court for the
Southern District of Florida, alleging defaults on the promissory notes.
The Settlement provides that all existing promissory notes between the parties be cancelled and replaced
with a new senior convertible promissory note in the amount of $2,915,000 with interest at 5% payable in
full on February 29, 2016 (“Note”). Should Abakan prepay the Note, on or before July 31, 2015, the
amount required to satisfy the Note will decrease to $2,700,000, plus interest, without any penalty. The
Note is convertible, at the sole option of Sonoro, into shares of Abakan’s common stock at $1.00 per
share and a ½ warrant that entitles the holder of one full warrant to purchase an additional share of
Abakan at $1.50 until repayment.
The Note ranks senior to any other indebtedness, except with respect to existing secured creditors
including George Town Associates S.A. (“George Town”). Nevertheless, the Settlement allows Abakan
to enter into additional secured indebtedness, on substantially the same terms as it has with George Town,
for the purpose of satisfying amounts due to George Town, if such indebtedness is secured from certain
lenders or from within a certain classification of lenders.
The Settlement further provides that in the event Abakan fails to satisfy the Note in full, on or before
maturity, Sonoro would be entitled to a file a mutually executed Stipulated Consent Award with JAMS.
Abakan waives and agrees not to assert any defenses to the Stipulated Consent Award. The filing of the
Stipulated Consent Award would effectively act as an arbitration award and judgment that could be
entered in any court having jurisdiction over the Company.
A stipulation for a dismissal of the Sonoro lawsuit has been filed with the Court.
ITEM 2.03
CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
UNDER AN OFF-BALANCE SHEET ARRANGMENT OF REGISTRANT
_____________________________________________________________________________________
The disclosures required by this Item 2.03 are contained in Item 1.01, above, and are incorporated as if
fully restated herein.
ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS
_____________________________________________________________________________________
(d)
Exhibit
10.1
Settlement Agreement dated May 19, 2015
2
_____________________________________________________________________________________
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.
Abakan Inc.
Date
By:/s/ Robert H. Miller
May 19, 2015
Name: Robert H. Miller
Title: Chief Executive Officer
3
