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EXPLANATORY NOTE
The purpose of this amendment to our Report on Form 8-K for the events of May 5, 2017, filed with the Securities and Exchange Commission on May 8, 2017 (the “Form 8-K”), is to remove references to an original issue discount, legal fees and warrant which do not apply to the transaction being reported.
Section 1—Registrant’s Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On May 5, 2017 (the “Closing Date”), REAC Group, Inc. (the “Company”) entered into a Securities Purchase Agreement (“SPA”) with an institutional accredited investor (“Investor”) pursuant to which Investor invested $165,000 (the “Financing”). On the Closing Date, the Company issued to Investor a Convertible Promissory Note (the “Note”) in the principal amount of $165,000. There is no material relationship between the Company or its affiliates and the Investor and the Company paid no commissions or other placement agent fees.
The SPA and the Note are collectively referred to herein as the “Transaction Documents.”
The Note matures in 10 months and is convertible into shares of the Company’s common stock at a conversion price equal to 50% of the lowest trading price per share during the previous twenty-five (25) trading days. The Company may prepay the Note within 90 days by payment to Investor of 135% of the outstanding principal, interest and other amounts then due under the Note or within 180 days by payment to Investor of 150% of the outstanding principal, interest and other amounts then due under the Note. After 180 days, the Company will have no right of prepayment.
Pursuant to the terms of the SPA and the Note, the Company is required to reserve and keep available out of its authorized and unissued shares of common stock a number of shares of common stock at least equal to three and a half (3.5) times the number of shares issuable on full conversion of the Note.
The foregoing summary description of the terms of the Transaction Documents may not contain all information that is of interest to the reader. For further information regarding the terms of the Transaction Documents, reference is made to such Transaction Documents, which are filed hereto as Exhibits 10.1 and 10.2, and are incorporated herein by this reference.
Section 2—Financial Information
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant
The information provided above in “Item 1.01—Entry into a Material Definitive Agreement” of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Section 3—Securities and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities
The information provided above in “Item 1.01—Entry into a Material Definitive Agreement” of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
The issuance of the Notes and the issuance of the shares of the Company’s common stock upon conversion of the Notes in connection with the Financing is exempt from registration under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions from the registration requirements of the Act in transactions not involved in a public offering pursuant to Rule 506(b) of Regulation D, as promulgated by the Securities and Exchange Commission under the Act.
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Section 9—Financial Statements and Exhibits.
Item 9.01. Financial Statements and Exhibits.
d.
Exhibits
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NUMBER | EXHIBIT |
10.1 | Securities Purchase Agreement Filed on May 8, 2017 as Exhibit 10.1 to the registrant’s Report on Form 8-K (File No. 000-54845) and incorporated herein by reference |
10.2 | Convertible Promissory Note Filed on May 8, 2017 as Exhibit 10.2 to the registrant’s Report on Form 8-K (File No. 000-54845) and incorporated herein by reference |
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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| REAC GROUP, INC. |
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May 8, 2017 | /s/ Robert DeAngelis |
| Robert DeAngelis |
| Chief Executive Officer |
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