Item 3.02 Unregistered Sales of
On
a) A secured convertible debenture (the "2020 Note") in the amount of$350,000 . The Note bears interest at a rate of 10% per annum (15% on default) and has a maturity date ofMarch 23, 2021 . The 2020 Note is secured by all the assets of the Company and its subsidiaries pursuant to an amended and restated security agreement (as discussed below). The 2020 Note provides a conversion right, in which any portion of the principal amount of the 2020 Note, together with any accrued but unpaid interest, may be converted into the Company's common stock at a conversion price equal to 75% of the lowest volume weighted average price of the Company's common stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The 2020 Note may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 9.99% of the Company's outstanding common stock (the "Beneficial Ownership Limitation"); provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days' prior notice to the Company. The 2020 Note provides the Company with a redemption right, pursuant to which the Company, upon 10 business days' prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest under the 2020 Note at a redemption price equal to 125% of the principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have nine (9) business days after receipt of the Company's redemption notice to elect to convert all or any portion of the 2020 Note, subject to the Beneficial Ownership Limitation; and b) A warrant (the "Warrant") to purchase 7,000,000 shares of the Company's common stock (the "Warrant Shares") at an exercise price of$0.05 per share. The Warrant expires onSeptember 23, 2025 (the "Expiration Date"). The Investor may not exercise the Warrant to the extent that the Warrant Shares issuable pursuant to such exercise would cause the Investor to beneficially own more than 4.99% of the outstanding shares of the Company's common stock following such exercise; provided, however, that the Investor may waive such limitation within 60 days of the Expiration Date upon not less than 65 days' prior notice to the Company.
Pursuant to the Securities Purchase Agreement, the Company secured its
obligations thereunder pursuant to (i) the 4th Amended and Restated Security
Agreement previously entered into with the Investor on
In connection with the Securities Purchase Agreement, the Company executed a
registration rights agreement (the "Registration Rights Agreement") pursuant to
which it is required to file a registration statement (the "Registration
Statement") with the
The transaction closed on
2
Item 9.01 Financial statements and Exhibits.
(d) Exhibits. Exhibit Number Description 10.1 Form of Securities Purchase Agreement, datedSeptember 23, 2020 10.2 Form of Secured Convertible Debenture, datedSeptember 23, 2020 10.3 Form of Registration Rights Agreement, datedSeptember 23, 2020 10.4 Form of Warrant, datedSeptember 23, 2020 3
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