8-K
BASANITE, INC. (BASA)
UNITED STATESSECURITIES 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): August22, 2022 (August 17,2022 )
Basanite, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 000-53574 | 20-4959207 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S EmployerIdentification No.) |
2041 NW 15th Avenue, Pompano Beach, Florida 33069
(Address of principal executive offices) (ZipCode)
954-532-4653
(Registrant’s telephone number, includingarea code)
N/A
(Former name or former address, if changedsince 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) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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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 (§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 ☐
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. ☐
Item 5.02 Departure of Directors orCertain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective August 17, 2022, the Board of Directors (the “Board”) of Basanite, Inc. (the “Company”) appointed Lisa H. Gainsborg, CPA as Chief Financial Officer, Treasurer and Secretary of the Company. The following is certain biographical information for Ms. Gainsborg:
Lisa H. Gainsborg, 56, has extensive knowledge and experience in accounting and finance, including with regard to financial statement preparation, Securities and Exchange Commission reporting requirements, Sarbanes-Oxley compliance, the creation of accounting and reporting controls and procedures and enterprise resource planning systems. Since 2019, through her certified public accounting firms, Ms. Gainsborg has provided consulting services as a chief financial officer as well as tax preparation services for companies. From December 2014 through October 2019, Ms. Gainsborg was the Vice President of Finance at Zero Gravity Solutions, Inc., a publicly reporting company, where she was responsible for preparing Securities and Exchange Commission filings and managing external audits. Ms. Gainsborg also managed, reviewed, and provided the documentation for tax returns for various federal and state filings. From August 2003 through November 2016, Ms. Gainsborg served as President of A+ Accounting Services, Inc., where she was responsible for managing, accounting, budgeting, and tax services for clients. She also provided chief financial officer consulting services and accounting system support for clients and also prepared corporate, partnership, and individual tax returns. Ms. Gainsborg is a Certified Public Accountant in Florida and Maryland and received a Bachelor of Business Administration in Accounting from Hofstra University in 1989.
On August 17, 2022 (the “StartDate”), the Company and Ms. Gainsborg has entered into an employment letter (the “Employment Letter”) regarding her service with the Company. Pursuant to the Employment Letter, Ms. Gainsborg’ employment with the Company shall be “at will” and may be terminated by either party on thirty (30) days’ prior written notice.
Ms. Gainsborg’s base salary (“Base Salary”) will be at a rate of One Hundred Twenty-Five Thousand Dollars ($125,000) per year, payable in accordance with the regular payroll practices of the Company. The Base Salary will be revisited for possible upward adjustment at such time as the Company’s common stock becomes listed on a national securities exchange (including any tier of The Nasdaq Stock Market). Ms. Gainsborg may receive an annual cash and/or equity in the sole discretion of the Board. Such bonus shall be determined based on such factors as the Board deems appropriate, including performance targets approved by the Board. Ms. Gainsborg will also be eligible for equity grants pursuant to any Company equity plan approved and adopted by the Board and the Company’s stockholders. Other than the Initial Option Grant (defined below), equity grants to Ms. Gainsborg and the amounts thereof will be determined in accordance with the metrics approved from time to time by Board.
As of the Start Date, Ms. Gainsborg was granted 5-year, non-qualified options to purchase Seven Hundred Fifty Thousand (750,000) shares of Company common stock (the “InitialOption Grant”). The Initial Option Grant was memorialized pursuant to a Non-Qualified Stock Option Agreement (the “OptionAgreement”). The exercise price of the Initial Option Grant shall be $0.109, the closing price of the Common Stock on the Start Date. The Initial Option Grant shall vest as follows: (i) options to purchase Five Hundred Thousand (500,000) shares of common stock shall vest in equal quarterly installments of Sixty-Two Thousand Five Hundred (62,500) options over two (2) years from the Start Date and (ii) options to purchase Two Hundred Fifty Thousand (250,000) shares of common stock shall vest on the date that the Company reports (via its filings with the Securities and Exchange Commission) two (2) consecutive quarters of positive cash flow from operations. The Option Agreement contains customary terms regarding the treatment of the options upon the death, disability or employment termination of Ms. Gainsborg.
The Employment Letter contains customary confidentiality provisions.
The foregoing descriptions of the Employment Letter and Option Agreement are a summary only and do not purport to be complete and, is qualified in its entirety by reference to the full text of such documents, copies of which are attached hereto as Exhibits 10.1 and 10.2, which full texts are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit | |
|---|---|
| No. | Description |
| 10.1 | Letter Agreement, dated August 17, 2022, between the Company and Lisa<br>H. Gainsborg |
| 10.2 | Non-Qualified Stock Option Agreement, dated August 17, 2022, between the<br>Company and Lisa H. Gainsborg |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded<br> 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: August 22, 2022 | BASANITE, INC. | |
|---|---|---|
| By: | /s/ Simon R. Kay | |
| Name: Simon R. Kay | ||
| Title: Chief Executive Officer and President |
EXHIBIT****10.1
Basanite,Inc.
2041 NW 15^TH^ Avenue, Pompano Beach, FL33069
August 17, 2022
Lisa H. Gainsborg, CPA
Gainsborg & Associates PA
301 W Atlantic Avenue Suite 0-5
Delray Beach, FL 3344
Re: Offer Letter –Basanite Inc. Chief Financial Officer
Dear Lisa:
We are pleased to present the following offer of employment with Basanite, Inc. (the “Company”). If you accept, this offer letter (sometimes referred to herein as this “Agreement”) will govern your employment with the Company.
Position and Duties; Employment Status
You will serve as the Company’s Chief Financial Officer (“CFO”), Treasurer and Secretary and will report to the Company’s Chief Executive Officer (“CEO”) beginning August 17, 2022 (“Start Date”). You shall report regularly to the Company’s headquarters and may also work remotely in consultation with the CEO.
As CFO, you will in general have overall supervision of and responsibility for the financial and accounting operations of the Company and serve as the Company’s principal financial and accounting officer for purposes of the Company’s reporting with the Securities and Exchange Commission (“SEC”) and otherwise. You will be responsible for preparation of the Company’s financial statements and its financial reporting generally. You will also perform the duties, authorities, and responsibilities customarily associated with the positions of CFO, Treasurer and Secretary in similarly sized, publicly-traded companies, including oversight of the Company’s compliance with applicable financial and accounting related laws, rules and regulations and the rules and regulations of the SEC. You shall provide to the Company’s Board of Directors (including any designated committee thereof, the “Board”) and the CEO, whenever any of them request it, an account of all your activities as CFO and of the financial condition of the Company and shall perform such other duties and may exercise such other powers as may be delegated or assigned by the CEO.
In performing your duties for the Company, you shall be permitted to maintain your current consulting practice, provided that you dedicate no less than seventy-five percent (75%) of your business time and attention to the affairs of the Company. Your employment will be at will, meaning that either you or the Company may terminate the employment at any time for any reason or no reason on thirty (30) days’ prior written notice (you will be entitled to your base salary for such 30-day period if your employment is terminated by the Company).
Compensation and Benefits
Your annual base salary (“BaseSalary”) will be at a rate of One Hundred Twenty-Five Thousand Dollars ($125,000) per year, payable in accordance with the regular payroll practices of the Company. The Base Salary will be revisited for possible upward adjustment at such time as the Company’s common stock becomes listed on a national securities exchange (including any tier of The Nasdaq Stock Market).
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In addition, you may receive an annual cash and/or equity in the sole discretion of the Board. Such bonus shall be determined based on such factors as the Board deems appropriate, including performance targets approved by the Board.
You will be eligible for equity grants pursuant to any Company equity plan approved and adopted by the Board and the Company’s stockholders. Other than your initial equity granted detailed below, whether you receive any equity grants and the amounts thereof will be determined in accordance with the metrics approved from time to time by Board.
As of the Start Date, you will be granted 5-year, non-qualified options to purchase Seven Hundred Fifty Thousand (750,000) shares of Company common stock (the “InitialOption Grant”). The exercise price of the Initial Option Grant shall be the closing price of the Common Stock on the Start Date. The Initial Option Grant shall vest as follows: (i) options to purchase Five Hundred Thousand (500,000) shares of common stock shall vest in equal quarterly installments of Sixty-Two Thousand Five Hundred (62,500) options over two (2) years from the Start Date and (ii) options to purchase Two Hundred Fifty Thousand (250,000) shares of common stock shall vest on the date that the Company reports (via its filings with the SEC) two (2) consecutive quarters of positive cash flow from operations. The Initial Option Grant shall be further memorialized in a customary stock option award agreement.
You will participate on the same basis with all other similarly situated officers and employees of the Company in the Company’s standard benefits package made generally available to all other officers and executives, as may be adopted by the Company from time to time. Nothing herein shall restrict the Company from modifying or eliminating any Company benefit program, health plan or other fringe benefit at any time.
Confidentiality
In consideration of your access to the premises of the Company and/or you access to certain Confidential Information of the Company (as defined below), in connection with your business relationship with the Company, you hereby represent and agree as follows:
a. Definition. For purposes of this Agreement the term “Confidential Information” means: (i) any information which the Company possesses that has been created, discovered or developed in whole or in part by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; or (ii) any information which is related to the business of the Company and is generally not known by non-Company personnel. By way of illustration, but not limitation, Confidential Information includes trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, contracts and agreements, accounting information, information about the Company’s financial results of operations, and other information which would an executive officer of a publicly-traded company would reasonably be expect to keep confidential.
b. Exclusions. Notwithstanding the foregoing, the term Confidential Information shall not include: (i) any information which becomes generally available to the public other than as a result of your breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you; (ii) information received from a third party in rightful possession of such information who is not restricted from disclosing such information; and (iii) information known by you prior to receipt of such information from the Company, which prior knowledge can be documented and which prior knowledge was not obtained in breach of any duty to the Company.
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c. Documents. You agree that, without the express written consent of the Company, you will not (except in direct relation to the performance of your duties as described herein and in the best interest of the Company) remove from the Company’s premises or otherwise keep or store electronically, any notes, formulas, programs, data, records, machines or any other documents, data or information which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company’s demand or at such time as your employment is terminated.
d. No Disclosure and Use. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to any person or entity, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except in good faith as may be necessary in the course of the performance of your duties for the Company and in the best interests of the Company. You further agree that you will not use, directly or indirectly, any Confidential Information without the prior written consent of the Company, except in good faith as may be necessary in the course of the performance of your duties and in the best interests of the Company.
This Section shall survive termination of your employment with the Company.
Governing Law; Venue
This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Florida (without regard to its conflict of laws provisions). The parties consent to the personal jurisdiction of the State of Florida and further agree to the exclusive jurisdiction of the courts of the State of Florida, County of Broward, and the United States District Court located in Broward County, Florida, as applicable, in connection with, or incident to, any dispute, claim, case, controversy or matter arising out of or relating to your employment or this Agreement, to the exclusion of the courts of any other state, territory or country. The parties knowingly, willingly, and voluntarily, WAIVE ALL RIGHT TO TRIAL BY JURY in any such proceedings.
Entire Agreement; No Oral Modification
No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
This Agreement sets forth the entire agreement of the parties with respect to the subject matter contained herein and supersedes any and all prior agreements or understandings between you and the Company with respect to the subject matter hereof. No agreements, inducements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either you or the Company which are not expressly set forth in this Agreement
[Signature Page Follows]
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If you wish to accept employment at the Company under the terms described above, please sign and date this letter and return it to us. Please retain copies for your records.
| Sincerely, | |
|---|---|
| BASANITE, INC | |
| By: | /s/ Michael Barbera |
| Name: Michael Barbera | |
| Title: Chairman of the Board |
I understand and accept the terms of this employment offer.
| s/ Lisa H. Gainsborg |
|---|
| Lisa H. Gainsborg |
| August 17, 2022 |
| Date |
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EXHIBIT 10.2
NON-QUALIFIED STOCKOPTION AGREEMENT
Basanite, Inc., a Nevada corporation (the “Company”), desiring to afford an opportunity to the Grantee named below to purchase certain shares of common stock, par value $0.001, of the Company (the “Common Stock”) and to provide the Grantee with an added incentive as an employee of the Company, hereby grants to Grantee, and the Grantee hereby accepts, an option (“Option”) to purchase the number of such shares Common Stock optioned as specified below, during the term ending at midnight (prevailing local time at the Company’s principal offices) on the expiration date of this Option specified below, at the Option exercise price specified below, subject to and upon the following terms and conditions:
1. Identifying Provisions: As used in this Option, the following terms shall have the following respective meanings. This Option is not intended to be an incentive stock option pursuant to Section 422 of the Internal Revenue Code of 1986, as amended
| (a) | Grantee:<br> Lisa H. Gainsborg |
|---|---|
| (b) | Date<br> of Grant: August 17, 2022 |
| --- | --- |
| (c) | Number<br> of shares of Common Stock optioned: 750,000 (subject to vesting as detailed below) |
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| (d) | Option<br> exercise price per share: $0.109 |
| --- | --- |
| (e) | Option<br> Expiration Date: August 17, 2027, 5:00 pm Eastern Time |
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2. Timing of Purchase and Vesting: The Option vests and is exercisable as follows: (i) options to purchase Five Hundred Thousand (500,000) shares of Common Stock shall vest in equal quarterly installments of Sixty-Two Thousand Five Hundred (62,500) options over two (2) years from the Date of Grant; and (ii) options to purchase Two Hundred Fifty Thousand (250,000) shares of Common Stock shall vest on the date that the Company reports (via its filings with the Securities and Exchange Commission) two (2) consecutive quarters of positive cash flow from operations.
3. Restrictions on Exercise: The following additional provisions shall apply to the exercise of this Option:
| (i) | Grantee’s<br> Death. If Grantee’s service with the Company terminates by reason of death, this Option may thereafter be exercised,<br> but only for the number of shares as to which Grantee was entitled to exercise in accordance with Section 2 above on the date of<br> death, by Grantee’s legal representative(s) of Grantee’s estate or by the legatee of Grantee under the will of Grantee,<br> until the earlier of (a) nine (9) months from the date of death of Grantee, or (b) the expiration date of this Option. Any<br> further vesting of this Option shall cease and this Option shall terminate on the date of death of Grantee in all other respects. |
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| (ii) | Grantee’s Disability. If<br> Grantee’s service with the Company terminates by reason of Disability (meaning the inability to perform service for four consecutive<br> months due to physical or mental incapacity as certified by a licensed medical doctor), any vested Option in accordance with Section<br> 2 above may thereafter be exercised by Grantee or his or her personal representative, but only to the extent it was exercisable at<br> the time of termination, until the earlier of (a) nine (9) months from the date of termination of service, or (b) the expiration<br> date of this Option. Any further vesting of this Option shall cease and this Option shall terminate on the date of termination<br> of service in all other respects. |
| (iii) | Other Termination. If<br> Grantee’s service with the Company terminates for any reason other than death or Disability, this Option may thereafter be<br> exercised by Grantee, but only to the extent it was vested and exercisable at the time of such termination in accordance with Section<br> 2 above, until the earlier of (a) 90 days from the date of termination of service, or (b) the expiration date of this Option. Any<br> further vesting of this Option shall cease and this Option shall terminate on the date of termination of service in all other respects. |
| (iv) | Continuity<br> of Employment. This Option shall not be exercisable by the Grantee in any part unless at all times beginning with the date of<br> grant and ending no more than ninety (90) days prior to the date of exercise, the Grantee has, except for military service leave,<br> sick leave or other bona fide leave of absence approved by the Company (such as temporary employment by the United States Government)<br> been in the continuous employ of the Company, except that such period of ninety (90) days shall be nine (9) months following any<br> termination of the Grantee’s employment by reason of Disability. |
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4. Non-Transferable. The Grantee may not transfer his Option except by will or the laws of descent and distribution. This Option shall not be otherwise transferred, assigned, pledged, hypothecated or disposed of in any way, whether by operation of law or otherwise, and shall be exercisable during the Grantee’s lifetime only by the Grantee or his guardian or legal representative.
5. Adjustments and Corporate Reorganization. If the outstanding shares of the class then subject to this Option are increased or decreased, or are changed into or exchanged for a different number or kind of shares or securities, as a result of one or more reorganizations, recapitalizations, stock splits, reverse stock splits, stock dividends or the like, appropriate adjustments shall be made in the number and/or kind of shares or securities for which the unexercised portions of this Option may thereafter be exercised, all without any change in the aggregate exercise price applicable to the unexercised portions of this Option, but with a corresponding adjustment. Such adjustments shall be made by or under authority of the Company’s Board of Directors whose determinations as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive. Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company as a result of which the outstanding securities of the class then subject to this Option are changed into or exchanged for cash or property or securities not of the Company’s issue, or any combination thereof, or upon a sale of substantially all of the property of the Company to, or the acquisition of stock representing more than fifty percent (50%) of the voting power of the stock of the Company then outstanding, by another corporation or person, this Option shall terminate, unless provision be made in writing in connection with such transaction for the assumption of options therefore granted under the Plan under which this Option was granted, or the substitution for such options of any options covering the stock of a successor employer corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices, in which event this Option shall continue in the manner and under the terms so provided. If this Option shall terminate pursuant to the foregoing sentence, the Grantee shall have the right, at such time prior to the consummation of the transaction causing such termination as the Company shall designate, to exercise the unexercised vested portions of this Option.
6. Exercise, Payment For and Delivery of Stock: This Option may be exercised by the Grantee or other person then entitled to exercise it by giving three (3) business days’ written notice of exercise to the Company specifying the number of shares of Common Stock to be purchased and the total purchase price, accompanied by a check to the order of the Company or wire transfer of immediately available fund in payment of such price. If the Company is required to withhold any amount on account of any present or future tax imposed as a result of such exercise, the notice of exercise shall be accompanied by a check to the order of the Company in payment of the amount of such withholding.
7. Rights in Shares Before Issuance and Delivery. No person shall be entitled to the privileges of stock ownership in respect of any shares issuable upon exercise of this Option, unless and until such shares have been issued to such person as fully paid shares.
8. Requirements of Law and of Stock Exchanges. By accepting this Option, the Grantee represents and agrees for himself and his transferees by will or the laws of descent and distribution that, unless a registration statement under the Securities Act of 1933 is in effect as to shares purchased upon any exercise of this Option, (i) any and all shares so purchased shall be acquired for his personal account and not with a view to or for sale in connection with any distribution, and (ii) each notice of the exercise of any portion of this Option shall be accompanied by a representation and warranty in writing, signed by the person entitled to exercise the same, that the shares are being so acquired in good faith for his personal account and not with view to or for sale in connection with any distribution.
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No certificate or certificates for shares of stock purchased upon exercise of this Option shall be issued and delivered unless and until, in the opinion of counsel for the Company, such securities may be issued and delivered without causing the Company to be in violation of or incur liability under any federal, state or other securities law, any requirement of any securities exchange listing agreement to which the Company may be a party, or any other requirement of law or of any regulatory body having jurisdiction over the Company.
9. Disposition of Exercised Shares. In the event the Grantee exercises his option to purchase shares, any subsequent disposition of those shares by the Grantee on an exchange on which the Company’s shares are being traded shall be done in an orderly manner and not in a manner that would adversely affect the share price.
10. LawsApplicable to Construction. This Option will be governed by and construed in accordance with the laws and judicial decisions of the State of Nevada, without regard to the application of the principles of conflicts of laws of Nevada or any other jurisdiction.
11. EntireAgreement. This Option represents the complete understanding and agreement by the parties as to the subject matter hereof, superseding and replacing any prior agreements, promises and understandings of the parties.
IN WITNESSWHEREOF, the Company has granted this Option on August 17, 2022.
| BASANITE, INC. | |
|---|---|
| By: | /s/<br> Simon Kay |
| Name: Simon R. Kay | |
| Title: President and Chief<br> Executive Officer | |
| ACCEPTED: | |
| /s/ Lisa Gainsborg | |
| Lisa H. Gainsborg |
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