Item 1.01 Entry into a Material Definitive Agreement.
On June 27, 2014, Propell Technologies Group, Inc. (the "Company"), sold an
aggregate of 3,503,332 units at a per unit price of $0.15, each unit consisting
of one share of the Company's common stock par value $.001 (the "Common Stock")
and a five year warrant to acquire one half of a share of the Company's Common
Stock at an exercise price of $0.25 per share, to seven accredited investors for
aggregate gross cash proceeds of $525,499.80 pursuant to separate Securities
Purchase Agreements entered into with each investor (the "Purchase
Agreements"). The Company intends to use the net proceeds of the
above-described offering (the "Offering") for working capital and general
corporate purposes. The sale was part of a private placement offering in which
the Company offered for sale on a "best efforts-all or none" basis up to
3,333,333 units (gross proceeds of approximately $500,000 and on a "best
efforts" basis the remaining 10,000,001 units for a maximum of 13,333,334 units
(gross proceeds of approximately $2,000,000).
The Company retained Paulson Investment Company, Inc. (the "Placement Agent") as
the exclusive Placement Agent for the Offering. In connection therewith, the
Company agreed to pay the Placement Agent a 10% commission from the gross
proceeds of the Offering ($52,549.98) and a non-accountable expense allowance of
3% of the gross proceeds of the Offering ($15,765). In addition, the Company has
agreed to reimburse the Placement Agent for FINRA filing fees and related legal
fees incurred by it in connection with the Offering. The Placement Agent also
received warrants to purchase 525,500 shares of Common Stock, representing 15%
of the number of Units sold in the Offering (the "Placement Agent Warrants"),
exercisable at $0.25 per share of Common Stock for a period of five years. In
addition, the Placement Agent received a right of first refusal to participate
as a placement agent in future financings of debt or equity securities of the
Company for 12 months following the last closing in the Offering and the right
for one year to nominate a board observer; provided, however that the
participation right and board observer right terminates upon certain substantial
investments in the Company.
Each investor also entered into a Registration Rights Agreement with the Company
under which the Company is obligated to file a registration statement with the
Securities and Exchange Commission registering the Common Stock and shares of
Common Stock underlying the Warrants within 60 days following the Closing.
The foregoing descriptions of the Placement Agent Agreement, the Registration
Rights Agreement, the Warrants and the Purchase Agreement are qualified in their
entirety by reference to the full text of the Placement Agent Agreement,
Registration Rights Agreement, Warrant, and Purchase Agreement attached as Items
1.1, 4.1, 4.2, and 10.1, respectively.
Item 3.02 Unregistered Sales of Equity Securities.
The shares of Common Stock and Warrants sold in the Offering were not registered
under the Securities Act of 1933, as amended (the "Securities Act"), or the
securities laws of any state, and were offered and sold in reliance on the
exemption from registration afforded by Section 4(a)(2) and Regulation D (Rule
506) under the Securities Act and corresponding provisions of state securities
laws, which exempt transactions by an issuer not involving any public offering.
The investors are "accredited investors" as such term is defined in Regulation D
promulgated under the Securities Act. This Current Report shall not constitute
an offer to sell or the solicitation of an offer to buy, nor shall such
securities be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements and certificates
evidencing such securities contain a legend stating the same.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
1.1 Placement Agent Agreement dated April 15, 2014 with Paulson
Investment Company, Inc.
4.1 Form of Registration Rights Agreement
4.2 Form of Warrant
10.1 Form of Securities Purchase Agreement