13D Filing: Mistry Pravin and Avalanche International Corp (AVLP)

The foregoing summaries of certain provisions of the Exchange Agreement, the Notes, The Security Agreement, the Registration Rights Agreement and the Certificate of Designation are not intended to be complete and are qualified in their entirety by reference to the full text of such documents, which are filed as Exhibit 2.1 to the report on Form 8-K filed by the Issuer on March 9, 2017, including the following Exhibits thereto: Exhibit A (Note), Exhibit B (Security Agreement), Exhibit C (Registration Rights Agreement and Exhibit D (Class B Certificate of Designation), respectively, and each is incorporated herein by reference.

The Reporting Person entered into the exchange of shares of the Issuer for investment purposes.  The Reporting Person intends to review and evaluate its investment in the Notes and Class B Shares on an ongoing basis and may, depending upon its evaluation of the business and prospects of the Issuer, or such other considerations as it may deem relevant, determine to increase, decrease, or dispose of its holdings of the Notes, Class B Shares or Common Stock, engage in hedging transactions, evaluate a potential acquisition of the Issuer or of assets of the Issuer.  Any of the foregoing actions could involve one or more of the events referred to in paragraphs (a) through (j) of Item 4 of Schedule 13D, including, potentially, issuances, purchases, dispositions or pledges of securities, one or more mergers, reorganizations, consolidations, acquisitions of assets or other change in control, or other changes in capitalization of the Issuer.  As a part of its review and evaluation, the Reporting Person may hold additional discussions with the Issuer’s management and directors, other shareholders and other interested parties.  As described above, the holders of Class B Shares have the right to designate up to two members to the Board of Directors.

Except as set forth above, the Reporting Person has no plans or proposals that would result in or relate to any of the matters set forth in subparagraphs (a) through (j) of Item 4 of Schedule 13D (although the Reporting Person reserves the right to develop such plans).

Item 5. Interest in Securities of the Issuer

 (a)-(b)

The Reporting Person does not directly own any shares of Common Stock of the Issuer. As of the Closing Date and as a result of the Reporting Person’s exchange of shares of the Subject Company for the Notes and 100,000 shares of Class B Shares in the Exchange by reason of the provisions of Rule 13d-3 under the Act, the Reporting Person is deemed to beneficially own 278,843 shares of Common Stock, by reason of the Beneficial Ownership Limitation set forth In Item 4.  The Reporting Person has sole voting and dispositive power over such shares of Common Stock.

But for the Beneficial Ownership Limitation and assuming conversion of all of the Notes and the Class B Shares beneficially owned by the Reporting Person, the Reporting Person would hold 80.79% of the total outstanding shares of Common Stock based on 5,309,200 shares of Common Stock outstanding as of August 3, 2017 (as represented by the Issuer to the Reporting Person in the Share Exchange Agreement, dated as of March 3, 2017).  The foregoing does not include any Options that may be awarded to the Reporting Person under the 2016 Stock Incentive Plan. The Reporting Person would hold 42.67% of the total outstanding shares of Common Stock based on the current outstanding amount of 5,309,200 shares plus full execution of all 24,702,737 (this number includes up to 531,919 stock option rights that may be awarded to members of the Management Group) additional existing stock rights of the Company (as represented by the Issuer to the Reporting Person in the Share Exchange Agreement).

Each Class B Share is convertible, at the option of the Reporting Person, into 100 shares of Common Stock, at the same Conversion Price as for the Notes, subject to adjustment in the event of stock splits, dividends or other combinations. See item 4 of this Statement for a description of the Class B Shares.

(c) Except as set forth or incorporated herein, the Reporting Person has not effected any transaction in the Common Stock during the past 60 days.

(d) Not applicable.

(e) Not applicable.