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): October7, 2024 (October 2,2024)
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.) |
2660NW 15th Court, PompanoBeach, 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) |
|---|---|
| ☐ | 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 (§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 1.01 Entry into a material definitive agreement.
Item 5.02 of this Form 8-K is incorporated by reference herein.
Item 3.02 Unregistered sales of unregistered securities
In October 2024, the Company granted three advisors to the Company and its Interim Chief Executive Officer options to purchase an aggregate of 25,000,000 shares of common stock. These options have a term of five years and are exercisable at $.0275 per share. A description of the 5,000,000 options granted to the Company’s Interim Chief Executive Officer is described under Item 5.02. One of the three advisors received five-year options to purchase 10,000,000 common shares which vest 3,000,000 on October 2, 2024, 3,000,000 which vest upon the completion of $1 million of aggregate financing and an additional 4,000,000 upon the anniversary of the first 90-day period that the Company achieves operational break even as defined in the Advisory Agreement. A second advisor received five-year options to purchase 2,500,000 shares which vest 1,250,000 shares on October 2, 2024 and the remaining 1,250,000 options vest upon the completion of a minimum of $1,000,000 of aggregate financing into the Company. The third advisor received five-year options to purchase 7,500,000 shares which vest 3,750,000 shares on October 2, 2024 and the remaining 3,750,000 options vest upon the completion of a minimum of $1,000,000 of aggregate financing into the Company. Exemption from registration is claimed under Section 4(2) of the Securities Act of 1933, as amended. There were no commissions paid in connection with the issuance of any of the aforementioned options.
Item 5.02 Departure of directors or certain officers; election of directors;appoint of certain officers; compensatory arrangements of certain officers
On October 2, 2024, Ali Manav agreed to become the Acting Chief Executive Officer of Basanite, Inc. (the “Company”) through June 30, 2025. As an independent contractor, Mr. Manav has been performing advisory services to our Company since September 1, 2024. Mr. Manav’s services to the Company will be at a monthly fee of $17,250 plus expenses approved by the Chairman. The monthly fee of $17,250 will be deferred and accrued until such time as $1,000,000 is raised by the Company and which time any deferred compensation will be paid immediately to him. Upon $1,000,000 being raised by the Company, the Company will also pay Mr. Manav his monthly fee on the first day of each month through June 2025. Mr. Manav also received options to purchase 5 million shares of the Company’s common stock with a strike price of $.0275 equal to the closing price of the Company’s common stock as quoted by the OTCQB Market on the date of signing his engagement letter. The option will have a term of five years from the date of issuance. The options will also contain standard cashless exercise provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The options vest under the following schedule: 1.5 million options immediately upon the execution of his engagement agreement, 1.5 million options vest upon the completion of a minimum of $1 million of aggregate financing into the Company after the date of his engagement letter and 2 million options vesting upon the anniversary of the first 90-day period the Company achieves operational break even as defined in the engagement letter. Mr. Manav received $25,000 upon execution of the engagement letter for work conducted in September of 2024. As an independent contractor, Mr. Manav is not entitled to receive any employee benefits. The engagement letter will automatically terminate no later than June 30, 2025 unless the Company and Mr. Manav mutually agree on an extension.
Ali Manav, age 55, in the past five years served as Director of Operation of GEX Management for approximately one year and as a Chief Operating Officer of Innovest Global for approximately four years.
Mr. Manav is a seasoned business professional that has over 30 years of business experience in a multitude of industries including building materials, banking, IT, healthcare, and manufacturing. Mr. Manav is a specialist in lean manufacturing and has displayed his abilities to take companies from start-up to commercialization throughout his career. Mr. Manav holds an MBA in Management and Entrepreneurialism from the Weatherhead School of Management at Case Western Reserve University (1998) and has a bachelor's in business administration with majors in Accounting and Finance from the James B. Nance College of Business Administration at Cleveland State University.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in these statements. These risks and uncertainties include, but are not limited to, the ability of the Company to file its Quarterly Report on Form 10-Q and Annual Report on Form 10-K in a timely manner, the Company's ability to maintain compliance with OTCQB continued listing standards, and other factors described in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statements, except as required by law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit | |
|---|---|
| No. | Description |
| 10.1 | Engagement Letter between the Registrant and Ali Manav dated October 2, 2024 |
| 99.1 | Press Release dated October 3, 2024 |
| 104 | Cover Page Interactive Data File (the cover page XBRL<br> tags are 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: October 7, 2024 | BASANITE, INC. | |
|---|---|---|
| By: | /s/ Ali Manav | |
| Name: Ali Manav | ||
| Title: Interim Chief Executive Officer |
EXHIBIT 10.1
Basanite, Inc.
2041 NW 15thAvenue,
Pompano Beach, Florida 33069
Engagement Letter
October 2, 2024
Ali Manav
PO Box 728
Aurora, Ohio 44202
Dear Mr. Manav:
You have been asked to join our company as acting Chief Executive Officer and as an independent contractor until June 30, 2025. We contemplate that by the end of the trial period, we will either part our separate ways with no financial responsibility to each other or enter into a mutually acceptable employment agreement for your services as Chief Executive Officer. This Engagement Letter is intended to supersede all prior written and oral agreements pertaining to your services. We note below that you have been performing consulting services to our Company since September 1, 2024. Accordingly, we agree as follows:
You agree to serve as interim and acting Chief Executive Officer of Basanite, Inc. (the “Company”). You will report to the Chairman of the Board. It is understood that your services will be performed as an independent contractor at such time and place as you determine to fulfill your responsibilities.
Your work time services will on a “best efforts” basis for us at a monthly fee of $17,250 plus expenses approved by the Chairman. The monthly fee of $17,250 will be deferred and accrued until such time that $1MM is raised by the Company at which time any deferred compensation will be paid immediately to you. Upon $1MM being raised by the Company, the Company shall pay you on the first day of each month during the term of this Engagement Letter. If the first day of the month shall fall on a weekend or holiday, you will be paid on the first business day prior to the weekend or holiday. To the extent the Company is unable or unwilling to enter into a financing transaction such that you would be entitled to compensation, you will not receive compensation other than as set forth in Section 3 and 4 hereof.
Upon execution of this agreement, you will also be issued options to purchase 5 million shares of the Company’s common stock (“the Options,”) with a strike price equal to the closing price of the Company’s stock as quoted by the OTC markets exchange on the date of signing this Engagement Letter. The Options will have a term of 5 years from the date of issuance. The Options will have standard cashless exercise provisions as well as piggy-back registration rights for future stock registrations that the Company may file. The Options are to vest under the following schedule: 1.5 million options vesting immediately upon the execution of this agreement, 1.5 million options vesting upon the completion of a minimum of $1 million of aggregate financing into the Company after the date of this Engagement Letter, and 2 million options vesting upon the anniversary of the first 90-day period that the Company achieves operational breakeven. Operational break-even is defined as revenue less cost of goods sold which equals gross profit less manufacturing overhead and executive salaries. These are the items used to calculate operational break-even.
You will be paid $25,000 wired upon execution of this Engagement Letter for work conducted in September of 2024 through the signing of this Engagement Letter to an account as directed by you.
You shall not be entitled to health, hospitalization or other insurance or participation in a 401(k) plan during this trial period. You will be paid as an independent contractor. You agree to keep any and all Company information private and further agree not to disclose any information not available in the public realm.
You agree that while providing services for the Company and for a period of one year thereafter, you shall not make any derogatory or disparaging remarks about the Company, its officers or directors. The Company will provide director and officer insurance coverage for you and shall provide indemnification to you for any and all past issues that have occurred prior to the date hereof.
Your services to us may be terminated by us in the event you commit any act of fraud, dishonesty or engage in any criminal behavior (other than traffic infractions) whether during business hours or otherwise.
Upon expiration or termination of this Engagement Letter, you will not contact our clients for a period of one year.
The term of this Engagement Letter shall expire no later than June 30, 2025, and it may be terminated prior to that date by either party upon three days’ written notice to the other party sent by email. During the period of the final three months of the term of this Agreement, both parties agree to negotiate a possible long-term employment agreement. If the parties do not mutually agree on an extension, then this Agreement shall be automatically terminated no later than June 30, 2025.
This Engagement Letter sets forth the entire and only agreement or understanding between Basanite and you relating to the subject matter hereof and supersedes and cancels all previous agreements, negotiations, letters of intent, correspondence, commitments and representations in respect thereof among them, and no party shall be bound by any conditions, definitions, warranties or representations with respect to the subject matter of this Agreement except as provided in this Engagement Letter.
Any and all notices, demands or requests required or permitted to be given under this Agreement shall be given by email to the email address set forth next to each party’s signature.
The rights and obligations of Company under this Agreement shall inure to the benefit of and shall be binding upon any successor of Company, subject to the provisions hereof.
This Agreement may not be amended in any respect except by an instrument in writing signed by the parties hereto.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. If a party signs this Agreement and transmits an electronic facsimile of the signature page to the other party, the party who receives the transmission may rely upon the electronic facsimile as a signed original of this Agreement.
This Agreement shall be governed by, construed and enforced in accordance with the internal laws of the State of Florida, without giving reference to principles of conflict of laws. Each of the parties hereto irrevocably consents to the venue and exclusive jurisdiction of the federal and state courts located in the State of Florida, County of Broward.
| Very truly yours, |
|---|
| Basanite, Inc. |
| /s/ Ronald LoRicco |
| Ronald LoRicco, Sr., Chairman |
The foregoing terms are agreed to
and accepted by:
| /s/ Ali Manav |
|---|
| Ali Manav, CEO |
Exhibit 99.1
Basanite, Inc. Appoints Ali Manav asInterim Chief Executive Officer
POMPANO BEACH, FL, October 3, 2024, Basanite Inc. (OCTQB: BASA) is pleased to announce that the company has appointed Ali Manav as Interim Chief Executive Officer.
Mr. Manav is a seasoned business professional that has over 30 years of business experience in a multitude of industries including building materials, IT, healthcare, and manufacturing. Mr. Manav is a specialist in lean manufacturing and has displayed his abilities to take companies from start-up to commercialization throughout his career.
“I would like to thank the Board of Directors at Basanite for this incredible opportunity,” stated Mr. Manav. “I see enormous value in the products that Basanite has developed, and I am thoroughly enthused to utilize my network and experience to lead this company. I give my full commitment to Basanite to execute to the best of my abilities and establish regular, transparent and concise communications with its shareholders.
Ali holds an MBA in Management and Entrepreneurialism from the Weatherhead School of Management at Case Western Reserve University and has a bachelor’s in business administration with majors in Accounting and Finance from the James B. Nance College of Business Administration at Cleveland State University.
About Basanite
Basanite, Inc. (OTCQB: BASA), through its wholly owned subsidiary Basanite Industries, LLC, is a manufacturer and developer of a range of environmentally friendly, high-performance basalt fiber composite products used by the construction industry. Superior to traditional steel elements, Basanite's sustainable products are non-corrosive, lighter, stronger and longer lasting. For more information, please visit www.BasaniteIndustries.com.
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CautionaryNote Regarding Forward-Looking Statements
This release, the symposium referred to herein, and statements by the Company’s management in connection therewith contains or may contain “forward-looking statements,” which are based on Company management’s current expectations and assumptions as of the date of this press release. Such statements include those regarding the Company’s business and performance, its prospects, its products and the market for such products, the economy, and other future conditions and forecasts of future events, circumstances, and results, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “goal,” “feel,” "may," “plan,” "will," "expect," "anticipate," "estimate," "intend," “potential” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. Forward-looking statements in this press release involve substantial risks and uncertainties that could cause actual future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. All forward-looking statements in this press release and made in connection with the symposium referred to herein reflect Basanite’s current analysis of existing trends and information and represent Basanite’s judgment only as of the date of this press release. Actual results may differ materially from current expectations based on a number of factors, many of which are beyond the Company’s control. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company (including the risk of the Company continuing as a going concern), please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, including but not limited to the discussion under "Risk Factors" therein, which was filed with the U.S. Securities and Exchange Commission on April 15, 2022, as well as the Company’s other filings with the Securities and Exchange Commission, all of which may be viewed at http://www.sec.gov.