Item 3.02 Unregistered Sales of Equity Securities.
From September 1, 2022, through September 23, 2022, Registrant (the "Company")
issued and sold to accredited US investors and non-U.S. investors an aggregate
of $432,300 in principal amount Convertible Promissory Notes (the "Notes") and
warrants to purchase an aggregate of 14,409,995 shares of common stock (the
"Warrants"). The Company received proceeds from the closing of the private
placement of $393,000, which funds were used, and are being used, for general
corporate purposes and working capital.
The Notes are due twelve (12) months from their respective issuance dates (the
"Maturity Date"). The Notes do not bear interest and were issued in the face
amount equal to 110% of the purchasers' commitments. The Notes are convertible
into shares of the Company's common stock at a rate of $0.03 per share. If the
Notes are not paid in full by the Maturity Date, the balance remaining on the
Maturity Date shall be increased by 10% and the Company shall be required to pay
interest at a rate of 10% per annum thereon until all sums thereunder are paid
in full or converted into the Company's common stock.
The Warrants are exercisable into shares of the Company's common stock for a
term of one (1) year from their respective issuance dates at an exercise price
of $0.04 per share. The Warrants also contain provisions that protect the
holders against dilution by adjustment of the conversion price in certain events
involving a reduction or increase in the Company's shares.
The offering was made to non-U.S. investors and to U.S. "accredited investors,"
as the term is defined in Regulation D under the Securities Act of 1933, as
amended (the "Securities Act"), and was made without general advertising or
solicitation. The securities sold in the offering were not registered under the
Securities Act, or the securities laws of any state, and were offered and sold
in reliance on exemptions from registration including the exemption from
registration afforded by Section 4(a)(2) of the Securities Act and Regulation S
promulgated under the Securities Act, and corresponding provisions of state
securities law, which, respectively, exempt transactions by an issuer not
involving any public offering or transactions with non-U.S. Investors.
Forward-Looking Statements
The Company cautions you that statements included in this Current Report on Form
8-K (including the exhibit hereto) that are not a description of historical
facts are forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as "may," "will," "should," "expect,"
"plan," "anticipate," "could," "intend," "target," "project," "contemplates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negatives
of these terms or other similar expressions. These statements are based on
current expectations, estimates and projections about our business based in part
on assumptions made by management. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult
to predict. Therefore, actual outcomes and results may, and are likely to,
differ materially from what is expressed or forecasted in the forward-looking
statements due to numerous factors, including those set forth our periodic
reports filed with the SEC. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof, and
the Registrant undertakes no obligation to revise or update this report to
reflect events or circumstances after the date hereof. All forward-looking
statements are qualified in their entirety by this cautionary statement. This
caution is made under the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
10.1 Term Sheet, Form of Securities Purchase Agreement, Form of
Convertible Promissory Note, Form of Common Stock Purchase Warrant
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