UNITED STATES

SECURITIES 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): October 194, ~~2016~~2017

ANDALAY SOLAR, INC. (Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Delaware

001-33695

90-0181035

(State or other jurisdiction

of incorporation)

(Commission

File No.)

(I.R.S. Employer

Identification No.)

336 Bon Air Ctr. #352

Greenbrae, CA 94904

(Address of principal executive offices)

(408) 402-9400

Registrant’s telephone number, including area code:

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 (see General Instruction A.2. below):

¨ 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))

~~Item~~Indicate 1by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.~~01.~~405 ~~Entry~~of ~~into~~this achapter) ~~Material~~or ~~Definitive~~Rule ~~Agreement~~12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

OnEmerging ~~October~~growth ~~19,~~company 2016,Andalay Solar, Inc.,(the “Company“) received notice that the Circuit Court of the Second Judicial Circuit for Leon County, Florida (the “Court”), had entered on October 14, 2016 an Order Granting Approval of Settlement Agreement and Stipulation (the “Order”) approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), in accordance with a Settlement Agreement and Stipulation (the “Settlement Agreement”) between Andalay Solar, Inc., a Delaware corporation (the “Company“) and Tarpon Bay Partners, LLC (“Tarpon”), in the matter entitled Tarpon Bay Partners, LLC v. Andalay Solar, Inc., Case No. 2016-CA-001609 (the “Action”). Tarpon commenced the Action against the Company on October 10, 2016 to recover an aggregate of $630,393.03 of past-due accounts payable of the Company (the “Claim Amount”), which Tarpon had purchased from certain vendors of the Company pursuant to the terms of separate claim purchase agreements between Tarpon and each of such vendors (the “Assigned Accounts”). The Assigned Accounts relate to certain legal, accounting, and financial services provided to the Company. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement was entered into on August 3, 2016 and became effective and binding upon the Company and Tarpon upon entry of the Order by the Court on October 14, 2016.¨

~~Pursuant~~If toan ~~the~~emerging ~~terms~~growth ofcompany, ~~the~~indicate ~~Settlement Agreement approved~~ by ~~the~~checkmark ~~Order,~~if ~~on October 14, 2016,~~ the ~~Company~~registrant ~~agreed~~has toelected ~~issue~~not to ~~Tarpon~~use ~~such number of shares (~~the ~~“Settlement~~extended ~~Shares”)~~transition ofperiod ~~the~~for ~~Company's~~complying ~~common~~with ~~stock,~~any ~~$0.0001~~new ~~par value per share (the “Common Stock”), in one~~ or ~~more~~revised ~~tranches,~~financial asaccounting ~~necessary,~~standards ~~sufficient~~provided ~~to satisfy the Claim Amount through the issuance of freely trading securities issued~~ pursuant to Section 313(a)~~(10)~~ of the ~~Securities~~Exchange Act. Pursuant to the Settlement Agreement, the Company and Tarpon agreed that seventy percent (70%) of the net proceeds received by Tarpon from the sale of the Settlement Shares will be applied to reduce the Claim Amount. In addition, upon entry of the Order, the Company shall issue to Tarpon convertible promissory notes in the principal amounts of Thirty Five Thousand Dollars ($35,000) and Seven Thousand Five Hundred Dollars ($7,500) to Corinthian Partners LLC, respectively (the “Notes”). As such, the Company and Tarpon have reasonably estimated that the fair market value of the Settlement Shares, the Notes (as defined below) and all other amounts received or to be received by Tarpon is equal to approximately Nine Hundred Thousand Five Hundred Sixty One Dollars ($900,561). ¨

~~The~~Item Settlement Agreement provides that in no event shall the Settlement Shares beneficially owned by Tarpon at any given time exceed the number of such shares that, when aggregated with all other shares of Common Stock then beneficially owned by Tarpon, or deemed beneficially owned by Tarpon, would result in Tarpon owning more than 91.~~99%~~01. ofEntry ~~all~~into ofa ~~such~~Material ~~Common~~Definitive ~~Stock as would be outstanding on such date, as determined in accordance with Section 16 of the Securities Exchange Act of 1934, as amended and the regulations promulgated thereunder~~Agreement.

~~Furthermore,~~Securities ~~the~~Purchase ~~Settlement~~ Agreement ~~provides that, for so long as Tarpon or any of its affiliates hold any shares of Common Stock, the Company~~ and its affiliates are prohibited from, without prior written consent of Tarpon (which may not be unreasonably withheld), among other actions, voting any shares of Common Stock owned or controlled by the Company or its affiliates, or soliciting any proxies or seeking to advise or influence any person with respect to any voting securities of the Company, in favor of: (1) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (2) causing a class of equity securities of Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, or (3) taking any action which would impede the purposes and objects of the Settlement AgreementNotes

~~The~~On ~~foregoing~~October ~~descriptions~~2, of2017, Andalay Solar, Inc., a Delaware corporation (the ~~Settlement~~“Company”) entered into a Securities Purchase Agreement ~~and~~(the “Securities Purchase Agreement”) with two existing investors (the ~~Order~~“Purchasers”), dopursuant ~~not~~to ~~purport~~which (i) the Company issued to bethe ~~complete~~Purchasers ~~and~~Senior ~~are~~Secured ~~qualified~~Convertible Notes in ~~their~~the ~~entirety~~aggregate byprincipal ~~reference~~amount toof $312,000 (the ~~full~~“Notes”), ~~text~~for an aggregate purchase price payable in cash before reimbursement of ~~the~~expenses ~~Settlement~~of ~~Agreement~~$240,000, and ~~Order,~~may ~~which~~issue ~~are~~an ~~attached,~~additional ~~respectively~~$260,000 asprincipal ~~Exhibits~~amount ~~10.1~~of ~~and~~Senior 10Secured Convertible Notes.2 The Notes are convertible into shares of the Company’s common stock at a conversion price equal to ~~this~~the ~~Current~~lesser ~~Report~~of on(i) ~~Form~~$0.002, ~~8-K~~or (~~this~~ii) ~~“Report”~~fifty percent (50%) ~~and~~of ~~are~~the ~~incorporated~~lowest ~~herein~~Sale byPrice ~~reference.~~(as ~~Readers~~defined) ~~should~~of ~~review~~the ~~each~~common stock for athe ~~complete~~twenty ~~understanding~~(20) oftrading days preceding the ~~terms~~conversion ~~and~~date, ~~conditions~~subject ~~associated~~to ~~with~~adjustment ~~this~~(as ~~transaction~~described in the Notes).

~~Item~~The ~~3.02.~~Notes ~~Unregistered~~were ~~Sales~~issued with a thirty percent (30%) original issue discount and have a maturity date of ~~Equity~~October ~~Securities~~2, 2019 and bear interest at a rate equal to 8% per annum (which interest rate is increased to 18% per annum upon the occurrence of an Event of Default (as defined in the Notes). The Notes contain customary Events of Default.

~~Reference~~The isNotes ~~made~~contain tocertain covenants, such as restrictions on the ~~disclosures~~incurrence ~~set~~of ~~forth~~indebtedness, ~~under~~the ~~Item~~existence ~~1.01~~of liens, the payment of ~~this~~restricted ~~Report~~payments, ~~with~~redemptions, ~~disclosures~~the ~~incorporated~~payment ~~herein~~of bycash ~~reference~~dividends and the transfer of assets. If we fail to timely deliver the shares underlying the Notes, we will be subject to certain buy-in provisions.

~~The~~In ~~issuance~~addition, ofpursuant ~~Common~~to ~~Stock~~the toNotes, ~~Tarpon~~the ~~pursuant~~Company tomay ~~the~~not ~~terms~~enter ofinto ~~the~~or ~~Settlement~~be ~~Agreement~~party ~~approved~~to bya ~~the~~Fundamental ~~Order~~Transaction is(as ~~exempt~~defined) ~~from~~unless the ~~registration~~Successor ~~requirements~~Entity of(as ~~the~~defined ~~Securities~~in ~~Act~~the ~~pursuant~~Notes) toassumes ~~Section~~in ~~3(a)(10)~~writing ~~thereof,~~all asof anthe ~~issuance~~obligations of ~~securities~~the inCompany ~~exchange~~under ~~for~~the ~~bona~~Notes ~~fide~~pursuant ~~outstanding~~to ~~claims,~~written ~~where~~agreements ~~the~~in ~~terms~~form and ~~conditions~~substance ofreasonably ~~such~~satisfactory ~~issuance~~to ~~are~~the Purchasers and approved by athe ~~court~~Purchasers ~~after~~prior ato ~~hearing~~such ~~upon~~Fundamental ~~the~~Transaction, ~~fairness~~including ofagreements ~~such~~to ~~terms~~deliver ~~and~~to ~~conditions~~the atPurchasers ~~which~~in ~~all~~exchange ~~persons~~for tothe ~~whom~~Notes itand issecurities ~~proposed~~of tothe ~~issue~~Successor ~~securities~~Entity inevidenced ~~such~~by ~~exchange~~a ~~shall~~written ~~have~~instrument ~~the~~substantially ~~right~~similar in form and substance to ~~appear~~the Notes.

~~Item~~The 9Purchasers also received Warrants expiring in five years and exercisable at $1.~~01.~~00 ~~Exhibits~~per share to purchase up 1,350,000 shares of the Company’s common stock (the “Warrants”).

Exhibit No.		Document
	10.1	Settlement Agreement and Stipulation, dated August 3, 2016, by and between the Company and Tarpon Bay Partners, LLC.
	10.2	Order Granting Approval of Settlement Agreement and Stipulation, dated October 14, 2016

The Notes and the Warrants contain certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization, sales of securities below the conversion price of the Notes or exercise price of the Warrants. Furthermore, subject to limited exceptions, a Purchaser will not have the right to convert any portion of the Notes or exercise the Warrants if the Purchaser, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion (the “Beneficial Ownership Limitation”). The Beneficial Ownership Limitation may be adjusted upon not less than 61 days’ prior notice to the Company, provided that such Beneficial Ownership Limitation in no event shall exceed 9.99%.

~~SIGNATURES~~The Securities Purchase Agreement further provides that the Company agrees to enter into a registration rights agreement with and for the benefit of the Purchasers on terms satisfactory to the Purchasers in their sole and absolute discretion.

~~Pursuant~~The touse ~~the requirements~~ of ~~the~~proceeds ~~Securities~~from ~~Exchange~~this ~~Act~~financing ofremaining ~~1934,~~after the ~~registrant~~Company’s ~~has~~purchase ~~duly~~of ~~caused~~the ~~this~~R2 ~~report~~Note todescribed bebelow ~~signed~~(i.e., on$40,000), ~~its~~will ~~behalf~~be byused ~~the~~for ~~undersigned~~general ~~hereunto~~corporate ~~duly~~and ~~authorized~~working capital purposes.

~~Date:~~The ~~October~~Company ~~21,~~also ~~2016~~reimbursed the Purchasers for certain legal fees and expenses related to this private placement.

~~ANDALAY~~Security ~~SOLAR,~~and ~~INC.~~Guaranties

~~By:~~The /Note are secured by a security interest in all of the existing and future assets of the Company and its subsidiaries (the “Collateral”), including a pledge of all of the capital stock of each such subsidiary, for the benefit of the Purchasers to secure the Company’s/ ~~Edward~~obligations ~~Bernstein~~under the Notes, as evidenced by (i) a Security agreement (the “Security Agreement”) and (ii) a guaranty executed by each of the Company’s subsidiaries pursuant to which the subsidiaries guarantee all obligations of the Company under the Notes and Securities Purchase Agreement. Upon an Event of Default (as defined in the Notes), the Purchasers may, among other things, collect or take possession of the Collateral, proceed with the foreclosure of the security interest in the Collateral or sell, lease or dispose of the Collateral.

~~Name: Edward Bernstein~~2

~~Title: Chief~~R ~~Executive~~Squared ~~Officer~~Technologies, Inc. Note

~~Exhibit~~Concurrent ~~Index~~with the above-described private placement, the Company entered into a Securities Purchase Agreement (the “R2 Securities Purchase Agreement”) with R Squared Technologies Inc., a Delaware corporation (“R2”), pursuant to which (i) R2 issued to the Company a Senior Secured Convertible Note in the aggregate principal amount of $222,222.22 (the “R2 Note”), for an aggregate purchase price payable in cash before reimbursement of expenses of $200,000, and may issue an additional $222,222.22 principal amount of Senior Secured Convertible Notes. The R2 Note is convertible into shares of the R2’s common stock at a conversion price of $1.00, subject to adjustment (as described in the R2 Note). The R2 Note is secured by a security interest in all of the existing and future assets of R2 and its subsidiaries (the “R2 Collateral”), including a pledge of all of the of the capital stock of each such subsidiary, for the benefit of the Company to secure its obligations under the R2 Note, as evidenced by (i) a Security agreement (the “R2 Security Agreement”) and (ii) a guaranty executed by each of R2’s subsidiaries pursuant to which the subsidiaries guarantee all obligations of R2 under the R2 Note and R2 Securities Purchase Agreement. Upon an Event of Default (as defined in the R2 Note), the Company may, among other things, collect or take possession of the R2 Collateral, proceed with the foreclosure of the security interest in the R2 Collateral or sell, lease or dispose of the R2 Collateral.

Exhibit No.		Document
	10.1	Settlement Agreement and Stipulation, dated August 3, 2016, by and between the Company and Tarpon Bay Partners, LLC.
	10.2	Order Granting Approval of Settlement Agreement and Stipulation, dated October 14, 2016

Pursuant to the Securities Purchase Agreement entered into with the Purchasers, the Purchasers have the right to exchange the Notes issued to them by the Company for an equivalent amount of any securities issued by R2 to the Company, including, the R2 Note held by the Company.

The foregoing description of the terms of the Securities Purchase Agreement, the Notes, the Warrants, the Security Agreement, the R2 Securities Purchase Agreement, the R2 Note and the R2 Security Agreement, do not purport to be complete and are qualified in their entirety by reference to the provisions of such agreements, the forms of which are filed as exhibits 4.1, 4.2, 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, to this Current Report on Form 8-K.

The transactions contemplated by the Securities Purchase Agreement closed and funded on October 4, 2017.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information required by this Item 2.03 is set forth under Item 1.01 above and is hereby incorporated by reference in response to this Item 2.03.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 3.02 in its entirety. The Notes and the Warrants were, and any shares of common stock underlying the Notes and Warrants will be, issued in a transaction exempt from registration under the Securities Act in reliance on Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder. The Purchasers represented that it was an “accredited investor,” as defined in Regulation D, and was acquiring the securities described herein for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. Accordingly, the Notes and Warrants and any shares of common stock underlying the Notes and Warrants have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. Neither this Current Report on Form 8-K nor the exhibits attached hereto is an offer to sell or the solicitation of an offer to buy Notes, Warrants or shares of common stock or any other securities of the Company.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are filed with this Current Report on Form 8-K:

Exhibit 4.1		Secured Convertible Notes, dated October 2, 2017, issued by the Company.

Exhibit 4.2		Warrants, dated October 2, 2017, issued by the Company.

Exhibit 10.1		Securities Purchase Agreement, dated October 2, 2017, by and among the Company and the investors.

Exhibit 10.2		Security Agreement, dated October 2, 2017, by and among the Company, Akeena, Andalay CA, R2 Acquisition and R Squared Technologies, Inc.

Exhibit 10.3		Securities Purchase Agreement, dated October 2, 2017, by and between the Company and R Squared Technologies, Inc.

Exhibit 10.4		Secured Convertible Note, dated October 2, 2017, issued by R Squared Technologies, Inc.

Exhibit 10.5		Security Agreement, dated October 2, 2017, by and among R Squared Technologies, Inc., its subsidiaries and the Company.

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.

	ANDALAY SOLAR, INC.

Date: October _, 2017	By:	/s/ Edward Bernstein
	Name:	Edward Bernstein
	Title:	Chief Executive Officer

Exhibit Index

Exhibit 4.1		Secured Convertible Notes, dated October 2, 2017, issued by the Company.

Exhibit 4.2		Warrants, dated October 2, 2017 issued by the Company.

Exhibit 10.1		Securities Purchase Agreement, dated October 2, 2017, by and among the Company and the investors.

Exhibit 10.2		Security Agreement, dated October 2, 2017, by and among the Company, Akeena, Andalay CA, R2 Acquisition and R Squared Technologies, Inc.

Exhibit 10.3		Securities Purchase Agreement, dated October 2, 2017, by and between the Company and R Squared Technologies, Inc.

Exhibit 10.4		Secured Convertible Note, dated October 2, 2017, issued by R Squared Technologies, Inc.

Exhibit 10.5		Security Agreement, dated October 2, 2017, by and among R Squared Technologies, Inc., its subsidiaries and the Company.

Filing Compare · Andalay Solar, Inc.