ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 20, 2020, we entered into a Subscription Agreement with Alpha Capital
Anstalt ("Purchaser"), pursuant to which we issued and sold to the Purchaser
2,000,000 shares of our common stock (the "Shares") for total proceeds of
$160,000. The Shares were sold at $0.08 per share, after applying a 20% discount
to the purchase price of $0.10 per share.
The Shares were offered and sold pursuant to qualified offering circular on Form
1-A (File No. 024-10950) and related supplement, in each case filed with the
Securities and Exchange Commission. A copy of the form of Subscription Agreement
used in the offer and sale is attached as Exhibit 13.1 to the Form 1-A/A filed
with the SEC on June 3, 2019 and is incorporated herein by reference.
Also on March 20, 2020, we entered into a Securities Purchase Agreement ("SPA")
with Purchaser for the sale of a convertible promissory note, executed on March
20, 2019, in the principal amount of $200,000 (the "Note"). We received $160,000
after paying a $40,000 original issue discount on the Note. The Note bears
interest at 5% per annum and matures one year from the date of issuance. After
180 days from issuance, the Note may be converted by purchaser into shares of
our common stock at a conversion price of the lesser of (i) $0.025 or (ii) 40%
of the lowest trading price of our common stock in the 20 days preceding the
issuance date of the Note.
As additional consideration for the Note, we issued to Purchaser a warrant (the
"Warrant") to purchase 2,000,000 shares of common stock at an exercise price of
$0.02 per share (subject to adjustment as set forth in the Warrant) expiring six
months from the date of issuance.
The foregoing description of the SPA, the Note and the Warrant, and the
transactions contemplated thereby does not purport to be complete and is subject
to, and qualified in its entirety by reference to, the full text of the SPA, the
Note and the Warrant, which are included in this Current Report as Exhibits
10.1, 4.1, and 4.2, and are incorporated herein by reference.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION
The information set forth in Items 1.01 is incorporated into this Item 2.03 by
reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
4.1 Convertible Promissory Note, dated May 20, 2020
4.2 Warrant, dated May 20, 2020
10.1 Securities Purchase Agreement, dated May 20, 2020
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