On September 19, 2016, the Company received a notice of conversion from Stockbridge Enterprises L.P., a Nevada limited liability company (Stockbridge) to convert $3,000,000 of principal and interest (the Conversion Amount) owed by the Company to Stockbridge under the Senior Secured Convertible Note (the Note), dated December 14, 2009, into 65,934,066 restricted shares of common stock (the Shares), at a conversion price of $0.455 per share (the Conversion Price). The Conversion Price is calculated based on the lowest closing price in the ten trading days immediately preceding the date of conversion. The Shares were authorized by the Companys board of directors for issuance on September 28, 2016 (the Conversion). Following the conversion, a balance of $506,000 remains outst anding under the Note.
Prior to the issuance of the Shares, Stockbridge held approximately 27,696,452 shares (34.08%) of the issued and outstanding common stock of the Company. Following the issuance of the Shares, Stockbridge holds approximately 93,630,518 shares (63.60%) of the issued and outstanding common stock of the Company.
As of September 28, 2016, the Company has 147,214,676 shares of common stock issued and outstanding.
The sales and issuances described in this Current Report on Form 8-K (and the issuances of shares of Common Stock upon conversion or exercise of the convertible securities described herein) have been determined to be exempt from registration under the Securities Act of 1933, as amended, in reliance on Sections3(a)(9) and 4(2) of the Securities Act and Rule506 of RegulationD promulgated thereunder as transactions (i)involving securities exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange and (ii)by an issuer not involving a public offering. The investors have represented that they are accredited investors, as that term is defined in RegulationD, and have acquired the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.
CHANGE IN CONTROL
As a result of the Conversion, the Company believes an effective change in control of the Company has occurred, as Stockbridge has increased its voting power in the Companys issued and outstanding common stock from 34.08% toanaggregate 63.6%, representing a total increase of29.52%.
The information disclosed in Item3.02 of this Current Report on Form 8-K is incorporated by reference into this Item5.01.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AIRWARE LABS CORP.
Date: September 29, 2016
/s/ Jeffrey Rassas
Chief Executive Officer
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