VFRM Veritas Farms Inc (CE)

 

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): December 31, 2023

 

Veritas Farms, Inc.

(Exact name of registrant as specified in charter)

 

Nevada		333-210190		90-1254190
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

401 E. Las Olas Boulevard, Suite 1400 Fort Lauderdale, FL		33301
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (833) 691-4367

 

(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))

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☐

 

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. ☐

 

 

As used in this Current Report on Form 8-K, and unless otherwise indicated, the terms “the Company,” “Veritas Farms,” “we,” “us” and “our” refer to Veritas Farms, Inc. and its subsidiary.

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Credit Line

 

On December 31, 2023, Veritas Farms, Inc. (the “Company”) issued a secured convertible credit line promissory note in the principal amount for up to $3,000,000 (the “December 2023 Secured Convertible Promissory Note”), to the Cornelis F. Wit Revocable Living Trust (the “Wit Trust”), a principal shareholder who holds securities of the Company that constitute a majority of the voting securities of the Company. The December 2023 Secured Convertible Promissory Note is secured by the Company’s assets and contains certain covenants and customary events of default, the occurrence of which could result in an acceleration of the December 2023 Secured Convertible Promissory Note. The December 2023 Secured Convertible Promissory Note is convertible as follows: aggregate loaned principal and accrued interest under the December 2023 Secured Convertible Promissory Note may, at the option of the holder, be converted in its entirety into shares of our common stock at a conversion price of $0.02 per share. The Note will accrue interest on the aggregate amount loaned at a rate of 10% per annum. All unpaid principal, together with any then unpaid and accrued interest and other amounts payable under the December 2023 Secured Convertible Promissory Note, is due and payable if not converted pursuant to the terms and conditions of the December 2023 Secured Convertible Promissory Note on the earlier of (i) January 01, 2027, or (ii) following an event of default.

 

The foregoing summary of the December 2023 Secured Convertible Promissory Note does not purport to be complete and is qualified in its entirety by reference to the full text of the December 2023 Secured Convertible Promissory Note attached hereto as Exhibit 10.1.

 

Second Amendment to Previously Issued and Outstanding Secured Convertible Promissory Note

 

On December 31, 2023, the Company and the Wit Trust entered into an Second Amendment to Secured Convertible Promissory Note originally signed October 21, 2021, which was then amended and restated March 9, 2022, pursuant to which the Company and the Wit Trust amended the Secured Convertible Credit Line Promissory Note in order to extended the maturity date of the Secured Convertible Credit Line Promissory Note from October 1, 2024 to January 1, 2027.

 

The foregoing summary of the Second Amendment to Secured Convertible Promissory Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Second Amendment to Secured Convertible Promissory Note attached hereto as Exhibit 10.2.

 

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosure set forth under Item 1.01 of this Current Report on Form 8-K with respect to the issuance of the December 2023 Secured Convertible Promissory Note is incorporated herein by reference.

  

Item 3.02. Unregistered Sale of Equity Securities.

 

The disclosure set forth under Item 1.01 of this Current Report on Form 8-K with respect to the issuance of the December 2023 Secured Convertible Promissory Note is incorporated by reference into this Item 3.02. The December 2023 Secured Convertible Promissory Note issued to the investor was offered and sold in a transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(a)(2) thereof.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)

Exhibits

 

Exhibit No		Description
10.1		Secured Convertible Credit Line Promissory Note dated December 31, 2023 by and between Veritas Farms, Inc. and the Cornelis F. Wit Revocable Living Trust
10.2		Second Amendment to Secured Convertible Promissory Note dated December 31, 2023 by and between Veritas Farms, Inc. and the Cornelis F. Wit Revocable Living Trust
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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.

 

Dated: January 5, 2024	VERITAS FARMS, INC.
	By:	/s/ Thomas E. Vickers
		Thomas E. Vickers, Interim Chief Executive Officer

 

 

3

Exhibit 10.1

 

SECURED CONVERTIBLE CREDIT LINE PROMISSORY NOTE

 

US $3,000,000.00	December 31, 2023
	Fort Lauderdale, Florida

 

FOR VALUE RECEIVED, Veritas Farms, Inc. with a current principal office address of 401 E. Las Olas Blvd, STE 1400, Fort Lauderdale, FL 33301 (the “Maker”), agrees and promises to pay to the order of the Cornelis F. Wit Revocable Living Trust, its successors and/or assigns (the “Holder”) at the Holder’s address, or such other place as designated in writing by the Holder of this Secured Convertible Credit Line Promissory Note (“Promissory Note”), the principal sum of THREE MILLION Dollars (US $3,000,000.00) (“Maximum Principal Amount Committed”) or such lesser amount as shall equal the aggregate unpaid principal amount of all funds loaned by the Holder to the Maker in accordance with the terms of this Promissory Note, with interest (“Interest”) on the aggregate amount loaned at a rate of 10% per annum. The Maker may, from time to time, borrow under the terms of this Promissory Note up to but not exceeding the Maximum Principal Amount Committed of this Promissory Note in increments of Two Hundred and Fifty Thousand Dollars ($250,000.00) at any time prior to the Maturity Date (as defined herein), upon delivery to Holder of a Draw Notice (the form of which is attached hereto as Exhibit A) for such amount.

 

This Promissory Note includes and evidences the following outstanding indebtedness of Maker to Holder pursuant to previously executed and delivered secured convertible promissory notes by Maker for the benefit of the Holder:

 

a.

Accrued interest in the amount of seven hundred and fifty thousand dollars ($750,000.00) relating to the Secured Convertible Credit Line Promissory Note dated October 12, 2021 as amended on March 9, 2022 and December 31, 2023.

 

All unpaid principal (“Principal”), together with any then unpaid and accrued Interest and other amounts payable hereunder, shall be due and payable by Maker to Holder, if not converted pursuant to the terms and conditions of this Promissory Note, on the earlier of (i) January 1, 2027, or (ii) following an Event of Default (as defined below) (such date, the “Maturity Date”). All payments due hereunder shall be paid in lawful money of the United States of America which shall be legal tender in payment of all debts, in immediately available funds, without offset, deduction or recoupment. Any payment by check or draft shall be subject to the condition that any receipt issued therefore shall be ineffective unless the amount due is actually received by the Holder. Each payment shall be applied first to the payment of all costs, fees and expenses incurred by or payable to the Holder in connection with the collection or enforcement of this Promissory Note; second, to the payment of all accrued and unpaid Interest hereunder; and third, to the payment of the unpaid Principal amount.

 

The proceeds of this Promissory Note shall be used by the Maker for working capital.

 

As collateral security for payment of the obligations under this Promissory Note, the Maker and the Holder have agreed that all obligations hereunder will be secured by all the assets of the Maker, and Maker hereby grants to Holder a security interest and lien in all of Maker's assets, wherever located, whether tangible or intangible, now existing, or hereafter acquired.

 

Optional Conversion. At any time prior to the Maturity Date, a portion or all of the outstanding Principal amount of this Promissory Note, together with a portion or all accrued but unpaid Interest hereunder (the “Outstanding Balance”), is convertible into shares of common stock of the Maker (“Common Stock”), at the option of the Holder at a conversion price (“Conversion Price”) of two cents ($0.02) per share of Common Stock.

 

 

Mechanics of Conversion. In order to convert the Outstanding Balance, Holder shall deliver to the Maker a written Election to Convert (the form of which is attached hereto as Exhibit B). Upon receipt of the written Election to Convert, the Maker shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Holder, and in such name or names as the Holder may designate, certificate(s) evidencing the full number of Common Stock so purchased upon conversion of the Promissory Note. Such Common Stock shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such securities as of the date of delivery of the Election to Convert, notwithstanding that the certificate(s) representing such securities shall not actually have been delivered or that the securities transfer books of the Maker shall then be closed.

 

In the event that the outstanding shares of Common Stock of the Maker hereafter is restructured or revised by recapitalization, reclassification, combination, split or split-up or dividend, the aggregate number and kind of shares of Common Stock subject to conversion under this Promissory Note shall be adjusted appropriately, both as to the number of shares of Common Stock and the Conversion Price. No fractional share of Common Stock will be issued upon conversion, but any fractional share of Common Stock will be rounded up to the nearest whole share of Common Stock.

 

In case of any sale exchange, tender offer, redemption or buyout of the Maker’s Common Stock, or any consolidation of the Maker with or merger of the Maker into another corporation, or in case of any sale, transfer or lease to another corporation of all or substantially all other property of the Maker, the Maker or such successor or purchasing corporation, as the case may be, shall execute with the Holder an agreement that the Holder shall have the right thereafter, upon payment of the Conversion Price in effect immediately prior to such action, to convert this Promissory Note, on the same basis which it would have or have been entitled to receive after the happening of such consolidation, merger, sale, transfer or lease had such conversion been accomplished immediately prior to such action. Such agreement shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided herein. These provisions shall similarly apply to successive consolidations, mergers, sales, transfers or leases.

 

This Promissory Note may be prepaid at any time prior to the Maturity Date after providing the Holder with five (5) days notice of the Maker’s intent to process the prepayment.

 

The occurrence of any of the following shall constitute an “Event of Default” under this Promissory Note (each, an “Event of Default”): (a) Maker shall fail to pay any Principal or Interest when due and payable hereunder; or (b) Maker shall fail to deliver the Common Stock or recognize the Holder as a holder of record of such shares of Common Stock as of the date of delivery of the Election to Convert in accordance with the terms hereof; or (c) a receiver, trustee or other similar official shall be appointed over Maker; or (d) Maker shall make a general assignment for the benefit of creditors; or (e) Maker shall file a petition for relief under any bankruptcy, insolvency or similar law; or (f) an involuntary proceeding shall be commenced or filed against Maker; or (g) Maker shall default or otherwise fail to observe or perform any covenant, obligation, condition or agreement of Maker contained herein; or (h) any representation, warranty or other statement made or furnished by or on behalf of Maker to Holder herein shall be false, incorrect, incomplete or misleading; or (i) any lawsuit, money judgment, writ or similar process shall be entered or filed against Maker or any subsidiary of Maker or any of its property or other assets for more than $100,000.00, unless otherwise consented to by Holder.

 

While an Event of Default exists, the Maker hereby promises to pay Interest on the unpaid balance of this Promissory Note then outstanding at the rate representing eighteen percent (18%) per annum or the highest rate allowed by law, whichever is lower, from the date of the Event of Default to until and including the date actually paid. It is the intent of parties hereto that in no event shall the amount of Interest due or payment in the nature of interest payable hereunder exceed the maximum rate of interest allowed by applicable law, as amended from time to time, and in the event any such payment is paid by the Maker or received by Holder, then such excess sum shall be credited as a prepayment of Principal, unless the Maker shall notify the Holder, in writing, that the Maker elects to have such excess sum returned forthwith.

 

 

This Promissory Note shall not be modified except by an instrument in writing signed by the party against whom enforcements of such modification is sought. This Promissory Note shall be governed and construed in accordance with the laws of the State of Florida, without regard to conflict of laws or principles thereof. Any suit or proceeding relating to this Promissory Note shall be brought or instituted only in a court of competent jurisdiction in Broward County, Florida. No waiver by the Holder of any default hereunder shall be deemed to constitute a waiver of any subsequent default. No exercise of any right or remedy hereunder shall preclude the exercise of any other right or remedy. The Maker agrees to pay or reimburse the Holder for all costs and expenses of enforcing and preserving its rights under this Promissory Note or any document or instrument executed in connection herewith (including reasonable attorneys’ fees and costs, whether in or out of court, in original or appellate proceedings or in bankruptcy).

 

The Maker and all others who may become liable for the payment hereof jointly and severally: (a) waive presentment for payment, demand, notice of demand, notice of non-payment or dishonor, protest and notice of protest of this Promissory Note, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Promissory Note, (b) consent to all extensions of time, renewals, postponements of time of payment of this Promissory Note, waivers or other modifications hereof from time to time prior to or after the Maturity Date hereof, whether by acceleration or in due course, without notice, consent or consideration to any of the foregoing, (c) agree to any substitution, exchange, addition or release of any party or person primarily or secondarily liable hereon, and (d) agree that, notwithstanding the occurrence of any of the foregoing (except by the express written release by Holder), the Maker shall be and remain directly and primarily liable for all sums due under this Promissory Note.

 

All issue taxes, documentary stamp taxes, or other taxes (if any) required by law at any time to be affixed to this Promissory Note shall be paid by the Maker. The Maker agrees to indemnify and hold the Holder, its affiliates, successors and assigns harmless from and against the aggregate of all expenses, losses, costs, deficiencies, liabilities, penalties, fines, fees and damages (including related reasonable counsel and paralegal fees and expenses) incurred or suffered by the Holder arising out of or resulting from the Maker’s failure to pay such documentary stamp or other tax.

 

IN WITNESS WHEREOF, the Maker has duly executed this Promissory Note as of the day and year first above written.

 

	Maker
	Veritas Farms, Inc.
	By:	/s/ Thomas E Vickers
		Thomas E. Vickers
		Chief Executive Officer

 

	Holder
	Cornelis F. Wit Revocable Living Trust
	By:	/s/ Cornelis F. Wit
		Cornelis F. Wit, Trustee

 

 

Exhibit A

 

DRAW NOTICE

 

Cornelis F. Wit Revocable Living Trust

Via Email: CFWit@StackFinancialinc.com

 

The undersigned, Veritas Farms, Inc. (the “Maker”), pursuant to the provisions of the Secured Convertible Credit Line Promissory Note (the “Promissory Note”) dated December 31, 2023 by the Maker and agreed to by the Cornelis F. Wit Revocable Living Trust (the “Holder”), wherein the Holder agreed and committed to loan Maker up to Three Million Dollars ($3,000,000.00) pursuant to the terms of the Promissory Note, and to date has loaned $_____________ to the Maker, hereby exercises its right to draw down and borrow, and hereby draws down ______________________________ ($____________) under the terms of the Promissory Note. Payment is requested to be received from the Holder within three (3) business days of the date of this Draw Notice.

 

Dated: __________________
Veritas Farms, Inc.
By:
Name:
Title

 

 

Exhibit B

 

FORM OF ELECTION TO CONVERT

 

The undersigned, Cornelis F. Wit Revocable Living Trust (the “Holder”), the holder of the attached Secured Convertible Credit Line Promissory Note dated December 31, 2023 (“Promissory Note”) from Veritas Farms, Inc. (“Maker”), hereby irrevocably elects to exercise its right to convert $_____________ of the Promissory Note into shares of Common Stock of Veritas Farms, Inc. a Nevada corporation, as more fully described in the Promissory Note, and requests that the documentation evidencing such securities be issued in the name of, and delivered to, __________________________________________, whose address is __________________________.

 

Dated:
Holder
Signature
Name
Title
(Signature must conform in all respects to name of Holder as specified in the Promissory Note)
(Insert Social Security or Federal Tax I.D. Number of Promissory Note Holder)

 

 

5

 

Exhibit 10.2

 

SECOND AMENDMENT TO

SECURED CONVERTIBLE CREDIT LINE PROMISSORY NOTE 

 

US $3,000,000.00

December 31, 2023 Fort Lauderdale, Florida

  

THIS SECOND AMENDMENT TO SECURED CONVERTIBLE CREDIT LINE PROMISSORY NOTE (“Note”) is effective as of this 31st day of December, 2023, by and between Veritas Farms, Inc., a Nevada corporation, having its principal place of business at 401 E Las Olas, Suite 1400, Fort Lauderdale, Florida 33301 (“Maker”), and the Cornelis F. Wit Revocable Living Trust, having an address at 646 Osprey Point Circle, Boca Raton, Florida 33431 (together with its successors and assigns, “Holder”).

 

RECITALS

 

WHEREAS, on October 12, 2021, Holder and Maker entered into a Secured Convertible Credit Line Promissory Note dated October 12, 2021, in the principal amount of up to $1,500,000.00 made by Maker to Holder (the “Original Note”);

 

WHEREAS, on March 9, 2022, Holder and Maker amended the Original Note and entered into an Amended and Restated Secured Convertible Credit Line Promissory Note dated March 9, 202, in the principal amount of up to $3,000,000.00 made by Maker to Holder (the “First Amendment to Note”);

 

WHEREAS, Maker and Holder desire to modify and amend the First Amendment to Note as set forth in this Note, and, accordingly, Maker and Holder have agreed to execute and deliver this Note; and

 

AGREEMENT

 

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Maker and Holder hereby covenant and agree as follows:

 

1. Defined Terms; Recitals. Unless otherwise expressly defined herein, all capitalized terms used herein shall have the meanings set forth for such terms in the Note. The recitals set forth above are hereby incorporated into the body of this Amendment as if fully restated herein.

 

2. Effect of Amendment. Except as expressly amended hereby, the Note shall continue in full force and effect and unamended. In the event of any conflict or inconsistency between the provisions of the First Amendment to Note (other than this Amendment) and this Amendment, the provisions of this Amendment shall control. From and after the date hereof, references to the “Note” (including, without limitation, any and all references contained in this Amendment) shall mean the Note as amended by this Amendment.

 

3. Maturity Date. The Maturity Date of the Note is hereby extended from October 1, 2024 to January 1, 2027.

 

4. Binding Effect. This Amendment will be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

 

5. Headings. The section headings that appear in this Amendment are for purposes of convenience of reference only and are not in any sense to be construed as modifying the substance of sections in which they appear.

 

6. Counterparts. This Amendment may be executed in one or more counterparts, each of which will constitute an original, and all of which together shall constitute one and the same agreement. Executed copies hereof may be delivered by e-mail or facsimile and, upon receipt, shall be deemed originals and binding upon the parties thereto. Without limiting or otherwise affecting the validity of executed copies hereof that have been delivered by e-mail or facsimile, the parties will use best efforts to deliver originals as promptly as possible after execution.

 

7. Governing Law. This Amendment shall be governed and construed in accordance with the laws of the state of Florida, without regard to its conflicts of law principles.

 

8. Authority. The parties represent and warrant to each other that each has the full power, right and authority to execute and perform this Amendment and all corporate action necessary to do so has been duly taken.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the dates set forth below, to be effective for all purposes, however, as of the last date executed below. 

 

	Maker
	Veritas Farms, Inc.
	By:	/s/ Thomas E Vickers
		Thomas E. Vickers
		Chief Executive Officer
	Holder
	Cornelis F. Wit Revocable Living Trust
	By:	/s/ Cornelis F. Wit
		Cornelis F. Wit, Trustee

 

 

 

 

v3.23.4

Cover	Dec. 31, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2023
Entity File Number	333-210190
Entity Registrant Name	Veritas Farms, Inc.
Entity Central Index Key	0001669400
Entity Tax Identification Number	90-1254190
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	401 E. Las Olas Boulevard
Entity Address, Address Line Two	Suite 1400
Entity Address, City or Town	Fort Lauderdale
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33301
City Area Code	833
Local Phone Number	691-4367
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false

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