KeyStar Corp. Reports New Debt, Equity Sales, & Agreement Changes

TL;DR

**KeyStar Corp. just took on new debt and sold more stock, signaling big changes.**

AI Summary

On December 29, 2023, KeyStar Corp. filed an 8-K indicating it entered into and terminated a material definitive agreement, and created a direct financial obligation. The company also reported unregistered sales of equity securities. This matters to investors because these actions, particularly the unregistered sales of equity, can dilute existing shareholder value and signal significant changes in the company's financial structure and strategic direction.

Why It Matters

These events suggest KeyStar Corp. is actively restructuring its finances and operations, which could impact its future performance and stock valuation.

Risk Assessment

Risk Level: medium — The combination of new financial obligations and unregistered equity sales introduces uncertainty regarding the company's financial health and potential dilution for shareholders.

Analyst Insight

Investors should closely monitor subsequent filings for details on the material agreements, the nature of the financial obligation, and the impact of the unregistered equity sales on share structure and valuation.

Key Players & Entities

• KeyStar Corp. (company) — the registrant filing the 8-K
• December 29, 2023 (date) — date of earliest event reported
• Nevada (company) — state of incorporation for KeyStar Corp.
• 000-56290 (company) — Commission File Number for KeyStar Corp.
• 85-0738656 (company) — I.R.S. Employer Identification No. for KeyStar Corp.

FAQ

Key Financial Figures

• $2,000,000 — n the principal amount of not more than $2,000,000 (the " Note "). The Note amends and res
• $10,000,000 — n the principal amount of not more than $10,000,000 (the " Former Note "). Excel is control
• $10,366,652.74 — t reborrow under the Note. A total of $10,366,652.74 of indebtedness under the Former Note w
• $0.40 — he " Shares ") at a conversion price of $0.40 per Share (based on the sale by the Com
• $0.50 — of Shares within the last two years at $0.50 per share multiplied by 80%) on Decembe
• $1,135,000 — ss under the Former Note was reduced to $1,135,000, which is the aggregate outstanding pri
• $1,540,000.00 — 27, 2023, with our consent, a total of $1,540,000.00 of the principal amount due under the F
• $8,826,652.74 — " Conversion Shares "). Excel converted $8,826,652.74 into 22,066,631.85 Conversion Shares. T
• $1,540,000 — Debt Assignees, collectively, converted $1,540,000 into an aggregate of 3,850,000 Conversi

Filing Documents

• form8-k.htm (8-K) — 46KB
• ex4-1.htm (EX-4.1) — 17KB
• ex10-1.htm (EX-10.1) — 105KB
• 0001493152-24-001027.txt ( ) — 358KB
• keyr-20231229.xsd (EX-101.SCH) — 3KB
• keyr-20231229_lab.xml (EX-101.LAB) — 33KB
• keyr-20231229_pre.xml (EX-101.PRE) — 22KB
• form8-k_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. The disclosures set forth in Item 2.03 are incorporated by reference into this Item 1.01.

02 Termination of a Material Definitive Agreement

Item 1.02 Termination of a Material Definitive Agreement. The disclosures set forth in Item 2.03 are incorporated by reference into this Item 1.02. Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. On December 29, 2023, KeyStar Corp., a Nevada corporation (the " Company, " " we " or " our "), entered into a Fifth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership (" Excel ") in the principal amount of not more than $2,000,000 (the " Note "). The Note amends and restates that certain Fourth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note between us and Excel entered into on September 14, 2023 in the principal amount of not more than $10,000,000 (the " Former Note "). Excel is controlled by Mr. Bruce Cassidy, our Secretary and sole member of our board of directors (the " Board "). The Note does not constitute a committed line of credit. Loans under the Note are made by Excel in its sole and absolute discretion. Upon repayment of any amount of principal or interest under the Note, we may not reborrow under the Note. A total of $10,366,652.74 of indebtedness under the Former Note was converted into shares of our common stock (the " Shares ") at a conversion price of $0.40 per Share (based on the sale by the Company of Shares within the last two years at $0.50 per share multiplied by 80%) on December 28, 2023. As a result of the conversion, the outstanding indebtedness under the Former Note was reduced to $1,135,000, which is the aggregate outstanding principal balance of all loans under the Note as of the date of the Note, and as of the date of this Current Report on Form 8-K. All loans made under the Note accrue interest at a fixed rate per annum equal to 15.0% (the " Fixed Rate "). On the first day of each month to the date on which Excel demands payme

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. On December 27, 2023, with our consent, a total of $1,540,000.00 of the principal amount due under the Former Note was assigned from Excel to eight (8) third parties (each, a " Debt Assignee ") pursuant to an Assignment and Assumption for each Debt Assignee. The following day, we received a total of nine (9) Conversion Notices which elected, in aggregate, that a total of $10,366,652.74 of indebtedness under the Former Note be converted at a conversion price of $0.40 per Share (based on the sale by the Company of Shares within the last two years at $0.50 per share multiplied by 80%) into 25,916,631.85 Shares (the " Conversion Shares "). Excel converted $8,826,652.74 into 22,066,631.85 Conversion Shares. The Debt Assignees, collectively, converted $1,540,000 into an aggregate of 3,850,000 Conversion Shares. The offer, sale and issuance of the Conversion Shares were deemed to be exempt from registration under the Securities Act of 1933, as amended (the " Securities Act "), in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering. The converting debt holders acquired the Conversion Shares for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the Conversion Shares upon issuance thereof. After the issuance of the Conversion Shares, we have a total of 67,821,631.85 Shares issued and outstanding. The foregoing summary of the Conversion Notice is qualified in its entirety by reference to the full text of the Conversion Notice which is attached as Exhibit 4.1 hereto and is incorporated by reference herein. You are urged to read said exhibit attached hereto in its entirety. Item 9.01 Financial Statements and Exhibits Exhibit No. Description 4.1 Form of Conversion Notice, dated December 28, 2023 10.1 Fifth Am

SIGNATURES

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. Date: January 4, 2024 KEYSTAR CORP. By: /s/ Walter Tabaschek Walter Tabaschek, CFO 4

View Full Filing

View this 8-K filing on SEC EDGAR