Item 1.01 Entry into a Material Definitive Agreement.
On February 18, 2020, American Battery Metals Corporation (the "Company") agreed
to sell 1,000 Units (the "Units" as defined below) to Newood Finance Solutions
Limited, a Fiji corporation doing business as Unifinance Limited ("Unifinance"),
pursuant to a Subscription Agreement (the "Subscription Agreement") in a private
placement offering (the "Private Placement"). Each Unit is comprised of: (i)
1,000 shares of the Company's Series B Preferred Stock, (as more particularly
described in Item 3.03 below), and (ii) a warrant to purchase five thousand
(5,000) shares of common stock of the Company (the "Warrant" as described
below). Unifinance agreed to pay the Company $10,000 per Unit for aggregate
proceeds received by the Company of $10,000,000 (the "Purchase Price").
Unifinance has irrevocably committed to pay the entire Purchase Price prior to
April 14, 2020.
The Warrant is exercisable at a price of $0.25 per share prior to December 31,
2022, unless redeemed earlier by the Company. The exercise price and number of
Warrant shares issuable upon the exercise of the Warrant will be subject to
adjustment in the event of any share dividends and splits, reverse share split,
recapitalization, reorganization or similar transaction, as described in the
Warrant. The Warrant shares are redeemable by the Company at any time upon
notice to the holder at a price of $.001 per share provided that the last sales
price of the Common Stock reported has been at least $0.50 per share (on each of
the twenty (20) trading days ending on the third business day prior to the date
on which notice of the redemption is given and provided that there is an
effective registration statement covering the shares of Common Stock issuable
upon exercise of the Warrant. Subject to limited exceptions, the holder of the
Warrant will not have the right to exercise any portion of the Warrants if the
holder, together with its affiliates, would beneficially own in excess of 9.99%
of the number of Common Shares outstanding immediately after giving effect to
such exercise (the "Beneficial Ownership Limitation"); provided, however, that
upon 61 days' prior notice to the company, the holder may increase the
Beneficial Ownership Limitation.
The Company intends to use the net proceeds from the Private Placement for
general working capital purposes, redemption of certain convertible notes,
development of the Company's proprietary technology, to purchase capital assets,
and to fund the Company's on-going business plan. The Company cannot use the
proceeds from the Private Placement for drilling activities and is limited in
the amount of such proceeds that can be used for management salaries except upon
consent from Unifinance. Up to six percent (6%) of the proceeds from the Private
Placement may be used for certain financing expenses related to the transaction
including any broker fees.
The foregoing descriptions of the Subscription Agreement and the Warrant do not
purport to be complete and are qualified in their entirety by reference to the
full text of the Subscription Agreement and the Form of Warrant, which have been
filed as Exhibits 10.1 and 10.2 respectively, to this Current Report and is
incorporated herein by reference.
The Units sold pursuant to the Subscription Agreement have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements. The
Units were issued in reliance upon the exemptions from registration under the
Securities Act provided by Section 4(a)(2) and Rule 506 of Regulation D and /or
Regulation S promulgated thereunder. Unifinance is an "accredited investor" as
that term is defined in Rule 501 of Regulation D and acquired the Units for
investment only and not with a present view toward, or for resale in connection
with, the public sale or distribution thereof.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth in Item 1.01 above is incorporated by reference into
this Item 3.02.
Item 3.03 Material Modification to Rights of Security Holders.
On December 27, 2019, American Battery Metals Corporation (the "Company") filed
a Certificate of Designation with the Secretary of State of the State of Nevada,
which, among other things, established the designation, powers, rights,
privileges, preferences and restrictions of the Series B Preferred Stock (the
"Series B Designation"). In connection with the Series B Designation, the
Company authorized 2,000,000 shares of its Series B Preferred Stock. Pursuant to
the Series B Designation, the Series B Preferred Stock shall not have voting
rights. Each share of Series B Preferred Stock is convertible into forty (40)
shares of the Company's common stock. The holders of the Series B Preferred
Stock shall be entitled to receive a non-cumulative dividend of eight (8%) per
annum. The holders of the Series B Preferred Stock shall have preference to the
common stock and to any preferred stock junior in rank upon liquidation.
The foregoing description of the Series B Designation does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Series B Designation, which is attached as Exhibit 3.1 to this Current Report
and incorporated in this Item 3.03.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No.Description
3.1 Certificate of Designation of Series B Preferred Stock, dated December
27, 2019
10.1 Form of Subscription Agreement between American Battery Metals
Corporation and Unifinance
10.2 Form of Warrant to be issued to Unifinance.
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