Current Report Filing (8-k)
November 13 2019 - 4:02PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): August 28,
2019
SusGlobal Energy Corp.
(Exact name of registrant as specified in its charter)
Delaware
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000-56024
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38-4039116
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(State or other jurisdiction of
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(Commission
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(IRS Employer
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incorporation)
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File Number)
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Identification No.)
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200 Davenport Road
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Toronto, ON, Canada, M5R 1J2
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(Address of principal executive offices) (Zip Code)
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(416) 223-8500
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(Registrants telephone number, including area code)
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N/A
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(Former name or former address, if changed since last
report)
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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))
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on which
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Title of each
class
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Trading Symbol(s)
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registered
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N/A
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N/A
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N/A
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Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of
this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b -2
of this chapter).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. [X]
Item 1.01 Entry into a Material Definitive
Agreement.
On November 6, 2019, Susglobal Energy Corp. (the "Company")
entered into an Executive Chairman Consulting Agreement (the "Hazout Consulting
Agreement"), by and among the Company, Travellers International Inc.
("Travellers"), and Marc Hazout, Chairman and President of the Company
("Hazout"), effective January 1, 2020 (the "Effective Date"). The Hazout
Consulting Agreement will replace the consulting agreement currently in effect
by and among the Company, Travellers, and Hazout, with its term set to expire on
December 31, 2019 (the "Expiring Agreement").
Pursuant to the terms of the Hazout Consulting Agreement,
Hazouts monthly fee will remain unchanged and he will be compensated at a rate
of $11,327 per month for his services as Chairman, President and Chief Executive
Officer of the Company. In addition, the Company agreed to grant Hazout certain
restricted stock units of the Company. The Company has also agreed to
reimburse Hazout for certain out-of-pocket expenses incurred by Hazout.
The Hazout Consulting Agreement is for a term of twelve (12)
months. Upon a Constructive Discharge (as defined in the Hazout Consulting
Agreements) and subject to certain notification requirements and the Companys
opportunity to cure the Constructive Discharge, Hazout will be entitled to a
compensation of twelve (12) months fees, as well as any bonus compensation
owing.
On November 6, 2019, the Company entered into an Executive
Consulting Agreement (the "Makrimichalos Consulting Agreement"), by and among
the Company and Ike Makrimichalos, Chief Financial Officer of the Company
("Makrimichalos"), effective January 1, 2020. Pursuant to the terms of the
Makrimichalos Consulting Agreement, Makrimichalos will be entitled to fees of
$6,041 per month for his services as Chief Financial Officer of the Company. The
Company has also agreed to reimburse Makrimichalos for certain out-of-pocket
expenses incurred by Makrimichalos. The Makrimichalos Consulting Agreement is
for a term of twelve (12) months. Makrimichalos will continue to be compensated
at a rate of $4,531 per month until the Effective Date.
The Makrimichalos Consulting Agreement is for a term of twelve
(12) months. Upon a Constructive Discharge (as defined in the Makrimichalos
Consulting Agreements) and subject to certain notification requirements and the
Companys opportunity to cure the Constructive Discharge, Makrimichalos will be
entitled to a compensation of two (2) months fees, as well as any bonus
compensation owing.
Item 1.01 of this Current Report on Form 8-K contains only a
brief description of the material terms of the Hazout Consulting Agreement, the
Expiring Agreement, and the Makrimichalos Consulting Agreement, and does not
purport to be a complete description of the rights and obligations of the
parties thereunder, and such descriptions are qualified in their entirety by
reference to the full text of the Hazout Consulting Agreement, the Expiring
Agreement, and the Makrimichalos Consulting Agreement, the forms of which are
attached as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report
on Form 8-K, and are incorporated herein by reference.
Item 2.04 Triggering Events that Accelerate or
Increase a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement.
On August 28, 2019, PACE Savings & Credit Union ("PACE")
informed the Company via letter that its credit facilities and corporate term
loan with PACE for a total amount owed as of that date of $5,310,922.65 (the
"Debt") was in default due to the Companys going concern disclosure in the
Companys consolidated financial statements for the years ended December 31,
2018 and 2017, and as a result of the Companys failure to respond to an e-mail
request from PACE with respect to the Companys efforts to arrange for a payout.
As a result, PACE was not agreeable to continue with the Debt and accelerated
the Debt and had requested that the Companys indebtedness to PACE be paid in
full on or before December 31, 2019.
On September 3, 2019, PACE informed the Company via letter that
the interest rates on the Debt be increased effective September 15, 2019, by
0.50% and each month thereafter by a further 0.50% .
On November 12, 2019, PACE informed the Company via letter that
it would be willing to enter into a credit amending agreement, provided, among
other things, that: (i) the Company repay two credit facilities totaling
$460,413 on or before December 31, 2019; and (ii) pursuant to the credit
amending agreement, the remaining portion of the Debt will be paid on or before
June 30, 2020.
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Resignation of Chief Executive Officer
On September 25, 2019, Gerald Hamaliuk submitted his
resignation from his positions as Chief Executive Officer and as a member of the
Companys Board of Directors (the "Board"), effective immediately (the "CEO
Resignation"). Mr. Hamaliuk did not resign as a result of any disagreement
with the Company on any matter relating to the Companys operations, policies or
practices. The Company and its shareholders thank Mr. Hamaliuk for his many
contributions.
Appointment of Chief Executive Officer
On November 6, 2019, in connection with the CEO Resignation,
the Board appointed Mr. Marc Hazout, the Chairman of the Board and President of
the Company, as Chief Executive Officer, effective immediately (the "CEO
Appointment").
Marc M. Hazout, age 54, has served as Chairman and President of
the Company since it was founded in 2014. Since 2005, Mr. Hazout has also served
as the chief executive officer, president, principal financial and accounting
officer and a director of Silver Dragon Resources Inc., a company whose common
stock is quoted on the OTC marketplace and is engaged in the acquisition and
exploration of silver and other mineral properties. Mr. Hazout has over 20 years
of experience in public markets, finance and business operations. Over the past
several years, Mr. Hazout has been involved in acquiring, restructuring and
providing management services as both a director and an officer to several
publicly traded companies. In 1998, Mr. Hazout founded and has been president
and chief executive officer of Travellers International Inc. ("Travellers"), a
private equity firm headquartered in Toronto. Over the past several years,
Travellers has focused on building relationships in China with the objective of
participating in that countrys growth opportunities. Mr. Hazout attended York University in Toronto
studying International Relations and Economics. Mr. Hazout speaks English,
French and Hebrew, as well as some Spanish and Italian. There is no arrangement or understanding between Mr. Hazout and
any other persons pursuant to which Mr. Hazout was selected as an officer. There
are no family relationships between Mr. Hazout and any director, executive
officer or person nominated or chosen by the Company to become a director or
executive officer of the Company within the meaning of Item 401(d) of Regulation
S-K under the U.S. Securities Act of 1933 ("Regulation S-K"). Since the
beginning of the Companys last fiscal year, the Company has not engaged in any
transaction in which Mr. Hazout had a direct or indirect material interest
within the meaning of Item 404(a) of Regulation S-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
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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SusGlobal Energy Corp.
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Date: November 13, 2019
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By:
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/s/
Marc Hazout
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Marc Hazout
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Executive Chairman, President and Chief Executive
Officer
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