SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Act of 1934
March 30, 2017
(Date of earliest event Reported)
NEXT GROUP HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction
|(Commission File Number)||
1111 Brickell Avenue, Suite 2200,
Miami, FL, 33131
(Address of principal executive offices)
Registrant's telephone number, including area code: (800) 611-3622
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
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
NOTE ABOUT FORWARD LOOKING STATEMENTS
Most of the matters discussed within this report include forward-looking statements on our current expectations and projections about future events. In some cases you can identify forward-looking statements by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. Such risks and uncertainties include the risks noted under “Item 1A Risk Factors.” We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Item 8.01. Entry into a Definitive Material Agreement.
Effective March 30, 2017 Next Group Holdings, Inc, ("NXGH" or the "Company") entered into a non-binding letter
of intent ("LOI") with AZUGROUP USA, LLC ("AZUGROUPUSA"), to acquire assets owned or controlled by AZUGROUP USA, LLC and its majority shareholder, Mr. Antonio Faranda. AZUGROUP USA, LLC and Mr. Antonio Faranda own or control the following Italian companies: AZUGROUP SRL Socio Unico, Cardnology S.R.L. and Go Card S.R.L. (collectively “AZUGROUP”), which together, generated €13.2 Million (US$14.2 Million @ 1.07) in revenue during 2016. AZUGROUP has combined current assets valued at €10.2 Million (US$11 Million @ 1.07). The sole minority partner in AZUGROUP will be compensated US$267,000.00 in exchange for the remaining interest in AZUGROUP. After the buyout of the remaining minority partner, Antonio Faranda will be the sole shareholder of AZUGROUP.
Under the terms of the LOI, subject to a definitive agreement and customary due diligence and shareholder
approval, the Company will acquire the assets of or merge with AZUGROUP USA which will have client contracts that generated a minimum of $10,000,000 (Ten Million US Dollars) of revenue in fiscal year 2016 (with the Company being the surviving entity).
Upon closing of the contemplated transaction, and subject to satisfactory review and approval, the Company will
appoint Antonio L. Faranda as President and as a director of the Company. Further, upon closing of the
contemplated transaction, Arik Maimon, the Company's Chief Executive and Chairman who holds the
majority ownership of the Company's Class B stock will enter into an agreement with Mr. Faranda whereby Messrs, Maimon and Faranda will have equal voting rights. Mr. Faranda will also have the right to designate two of the six directors of the Board of the Company that are acceptable to the Company's existing Board. Additionally, shares of NXGH common stock will be issued to Mr. Faranda and AZUGROUPUSA as a part of the consideration for the acquisition of AZUGROUP and its assets, client base and intellectual property. As a part of the proposed transaction, the Company will be required to capitalize AZUGROUP USA or the entity owned by the Company that acquires AZUGROUP assets.
The parties have agreed to use their best efforts to complete all pre-closing due diligence and enter into a definitive agreement.
Item 9.01 Financial Statement and Exhibits
|99.1||LETTER OF INTENT|
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: April 5, 2017||NEXT GROUP HOLDINGS, INC.|
|Chief Executive Officer|
NEXT GROUP HOLDINGS, INC.
LETTER OF INTENT
March 30, 2017
Miami Beach, Florida USA
NEXT GROUP HOLDINGS, INC. (NXGH:OTCQB) NXGH
1111 Brickell Avenue, Suite 2200
Miami, FL 33131
AZUGROUP USA LLC (AZUGROUP USA)
3767 Royal Palm Avenue Miami Beach, FL 33140
AZUGROUP SRL SOCIO UNICO, an Italian Company, P.za Del Rosario, 2 Milan (AZUGROUP SRL)
This letter confirms our mutual interest, on a non-binding basis and subject to entering into definitive agreements, with respect to merging our respective companies together and also entering into a certain option agreement. The transaction would be between NXGH and AZUGROUP USA, LLC, a Florida limited liability company, with the approval and consent of AZUGROUP SRL, an Italian company. GO CARD ,AND CARDNOLOGY
The principal terms of the proposed transactions are substantially set for herein as follows:
|(a)||AZUGROUP USA represents and warrants that it is a privately-owned company, and that it will owns 100 percent (100%) of the following companies (Company AZUGROUP, Company CARDNOLOGY and Company GO CARD. AZUGROUP USA represents that it will, subject to certain condition precedents, including, without limitation, the entering into of the definitive agreement and certain other condition precedents generally described below, transfer and/or contribute to AZUGROUP USA, LLC, client contracts, that in the fiscal year 2016 had generated minimum of USD $10 Million in revenue for AZUGROUP CARDNOLOGY AND GOCARD (the "Contribution"), and that AZUGROUP USA and NXGH would enter into definitive agreement whereby AZUGROUP USA would merge into NXGH or its assets (credit — debit — customers are the assets of Azugroup sri, Cardnology , Gocard that are included on this merge)would be acquired by NXGH. The surviving company and its subsidiaries would market, sell and distribute, fulfill, GPR (General Purpose Reloadable) open and closed loop, gift cards globally.|
The transaction is subject to both NXGH and AZUGROUP SRL CARDNOLOGY AND GOCARD delivering to each other audited financial statement in US GAAP.
Upon execution of the definitive agreement, NXGH shall pay to SAVE AND VIEW LTD (OWNER OF AZUGROUP SRL) a buy-out fee equal to Two Hundred and sixty-seven Thousand Dollars ($267,000.00) to be used to buy-out the minority shareholder of AZUGROUP SRL.
|(b)||Upon execution of the definitive agreement, AZUGROUP USA will contribute into the successor company minimum REVENUE in 2016 USD 10,000,000 in sales for AZUGROUP SRL. CARDNOLOGY, GOCARD|
|(c)||NXGH further agrees to the appointment of Antonio L. Faranda as President and Director of the surviving company, at an annual salary to be equal to that of Arik Maimon and have Antonio L. Faranda appointed as one of the Board of Directors of NXGH; and Faranda shall have the right to appoint up to one (1) additional Director to the Board of Directors of the surviving company;|
|(d)||Meimoun and Faranda agree that upon the completion of the acquisition of AZUGROUP USA by NXGH, that Meimoun and Faranda will enter into a voting trust agreement with respect to the Class B voting shares of NXGH owned by Meimoun. It is further agreed that Meimoun will transfer to Faranda 50% of the voting shares of Class B stock as further consideration for the sale and transfer of AZUGROUP USA assets or stock to NXGH. For the avoidance of doubt, Meimoun and Faranda will have equal voting rights for the Class B Voting Stock. NXGH will purchase the assets or common stock of AZUGROUP USA for 29% of the issued and outstanding stock of NXGH. Meimoun will own approximately 29% or the Common Stock of NXGH so that Faranda and AZUGROUP SRL will own approximately 29% respectively of the Common Stock of NXGH. A material inducement to AZUGROUP SRL entering into this LOI is that AZUGROUP SRL will be issued (29%) percent of the equity ownership interest of the outstanding shares of NXGH subject to NXGH stockholder approval.|
|(e)||Upon execution of the definitive agreement and following the merger or asset purchase, Antonio L. Faranda and/or assigns shall receive twenty nine (29%) percent of the common stock of NXGH.|
|(f)||Upon execution of the definitive agreement and following the merger or asset purchase, Antonio L. Faranda, and/or assigns, and Arik Maimon shall enter into a voting trust agreement whereby neither will be able to vote the voting shares of NXGH without the unanimous approval of the other.|
|(g)||NXGH shall also contribute to AZUGROUP USA a minimum of USD 1,000,000.00 will be immediately contributed to AZUGROUP USA upon the receipt of a minimum of a USD $3,000,000 bridge loan by NXGH. Additionally, NXGH shall also contribute an additional $2,000,000 from the total $10,000,000 upon successful raise the company is pursuing.|
|(h)||NXGH shall issue five (5%) percent of the shares of common stock from the balance of NXGH as further incentive compensation to be given to an individual to be designated by AZUGROUP USA who will be in charge of international sales for the merged company from the minority block excluding Maimoun , Michael De Prado and Faranda block of shares .|
|(i)||NXGH shall procure and arrange for a bridge loan in the amount of not less than $2,000,000 from company fund raising.|
|(j)||NXGH and AZUGROUP USA will jointly agree to appoint an accounting firm to provide all the necessary and required accounting services for an annual audit of the business operation of AZUGROUP USA. The audit will comply with Securities and Exchange Commission (SEC) accounting rules and regulations to enable NXGH to comply with its reporting obligations as a publicly owned company. If required, AZUGROUP SRL may be required to provide predecessor financial information for the audit of AZUGROUP USA and to comply with all other conditions and documents required by the SEC. NXGH and AZUGROUP SRL will also consult with an accounting firm mutually agreed to for tax guidance related to the transaction.|
|(k)||AZUGROUP SRL agrees that AZUGROUP SRL, NXGH and AZUGROUP USA upon completion of the audit of AZUGROUP USA and AZUGROUP SRL CARDNOLOGY GO CARD or thirty (30) days from the date of completion of audit agree to use their best efforts to enter into definitive agreements.|
|(I)||AZUGROUP SRL CARDNOLOGY GO CARD and AZUGROUP USA understand and agree that NXGH, as a publicly-owned company, will be required to file a disclosure report(s) with the SEC, and issue a public press release upon the signing of this LOI and the execution of definitive agreements. A copy of said SEC report will be provided to AZUGROUP SRL CARDNOLOGY GO CARD and AZUGROUP USA for review with the understanding that NXGH will have the right to accept or reject all disclosures in said disclosure report except that any reporting, descriptions or declarations that concern AZUGROUP SRL CARDNOLOGY GO CARD and AZUGROUP USA must be pre-approved by AZUGROUP SRL CARDNOLOGY GO CARD and AZUGROUP USA, (with said approval not to be unreasonably withheld) prior to the formal filing of the SEC report(s).|
|(m)||AZUGROUP SRL, AZUGROUP USA and any of its affiliates (including officers and directors) and individuals agree that they will not purchase and/or sell, trade or transfer any shares of NXGH that it owns for a period of 180 days following closing unless said shares of NXGH are registered in an effective Registration Statement with the SEC and/or in compliance with all rules and regulations as promulgated by the SEC, as well as all applicable State Blue Sky laws and regulations.|
|(n)||NXGH and its management team, board of directors, and majority and controlling shareholders similarly agree that they will not purchase and/or sell, trade or transfer any shares of NXGH that each owns for a period of 180 days following closing unless said shares of NXGH are registered in an effective Registration Statement with the SEC and/or in compliance with all rules and regulations as promulgated by the SEC, as well as all applicable State Blue Sky laws and regulations.|
NXGH, AZUGROUP SRL and AZUGROUP USA each will pay their respective legal, accounting and due diligence expenses incident to signing this LOI, and the transactions contemplated hereby.
This document, in and of itself, does not represent an enforceable legal or binding contract. Further negotiations and documentation, including preparing and executing a final Agreement, are required for the contemplated transaction to close.
NXGH and AZUGROUP USA agree, upon the signing of this LOI, to enter into negotiations for the merger, the signing of a definitive Agreement upon completion of audit, and the carrying-out of the transactions contemplated herein.
|AZUGROUP USA, LLC|
|3-30-2017||Signature:||/s/ Antonio Faranda|
|NEXT GROUP HOLDINGS, INC.|
|By:||/s/ Arik Maimon|
Chief Executive Officer