Item 1.01. Entry into a Material Definitive Agreement
Securities Purchase and Financing Agreement
On January 26, 2021, Quantum Materials Corp. (the "Company") and Pasaca Capital
Inc. ("Pasaca") entered into a Securities Purchase and Financing Agreement (the
"Purchase Agreement"). Pursuant to the terms of the Purchase Agreement, at the
first closing, Pasaca will convert three previously issued promissory notes made
by the Company payable to Pasaca and loan to the Company an additional
$1,500,000 pursuant to a certain Secured Convertible Promissory Note (the
"Convertible Note") made by the Company payable to Pasaca in the principal
amount of $4,500,000 (the "Senior Note"). The Senior Note is convertible into
154,228,625 shares of the Company's common stock (the "Note Shares"). At the
second closing, Pasaca will purchase common stock of the Company ("Common
Stock") in an amount such that, after such purchase and the conversion of the
Senior Note into the Note Shares, Pasaca will own fifty-one percent (51.0%) of
the fully diluted common stock of the Company. The purchase price for the Common
Stock to be sold in the second closing is $10,500,000. Pasaca will also have the
right to appoint three members to the Company's Board of Directors. Both the
first and second closing are subject to numerous contingencies, as set forth in
the Purchase Agreement.
The foregoing description of the Purchase Agreement and the Convertible Note do
not purport to be complete and are qualified in their entirety by the provisions
of the Purchase Agreement and the Convertible Note, which are attached hereto as
Exhibit 10.1 and Exhibit 10.2, respectively.
Registration Rights Agreement
On January 26, 2021, the Company and Pasaca entered into a Registration Rights
Agreement (the "Registration Rights Agreement"). Pursuant to the terms of the
Registration Rights Agreement, holders of twenty percent of the total shares of
Note Shares and Common Stock issued pursuant to the Purchase Agreement (the
"Registrable Shares") shall have the right to require the Company to register at
least thirty percent of such shares for sale on Form S-1 of Form S-3 under the
Securities Act of 1933, as amended (the "33 Act"). In addition, holders of ten
percent of the Registrable Securities shall have the right to require the
Company to register such shares for sale on Form S-3 under the 33 Act. The
Registration Rights Agreement also provides for piggy-back registration rights.
Pursuant to the Registration Rights Agreement, should the Company determine to
issue new equity securities of the Company, or securities convertible into
equity securities of the Company, it must offer such new securities to Pasaca
and/or its assigns.
The foregoing description of the Registration Rights Agreement does not purport
to be complete and is qualified in its entirety by the provisions of the
Registration Rights Agreement, which is attached hereto as Exhibit 10.3.
Distribution Agreement
On January 26, 2021, the Company and Pasaca entered into a Distribution
Agreement (the "Distribution Agreement"). Pursuant to the terms of the
Distribution Agreement, the Company appointed Pasaca to act as an independent
distributor to resell and distribute the Company's Quantum Dots and QMC HealthID
products. Under the Distribution Agreement, Pasaca guaranteed that the Company
would receive cumulative gross royalties and/or gross sales, licensing or other
revenues under the Distribution Agreement of no less than $15,000,000, over the
period including 2020 and continuing until twelve months after the Company has
completed development of a functioning product integrating the QMC HealthID IP
and Innova Medical Group's products. Pasaca has the right to extend the revenue
period by up to twenty-four months upon payment of advance royalties.
The foregoing description of the Distribution Agreement does not purport to be
complete and is qualified in its entirety by the provisions of the Distribution
Agreement, which is attached hereto as Exhibit 10.4.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are attached hereto and filed herewith.
Exhibit No. Description Location Reference
10.1 Securities Purchasing and Incorporated herein by reference to
Financing Agreement Exhibit 10.1 to the Company's 8k filed
on February 1, 2021
10.2 Convertible Note Incorporated herein by reference to
Exhibit 10.2 to the Company's 8k filed
on February 1, 2021
10.3 Registration Rights Incorporated herein by reference to
Agreement Exhibit 10.3 to the Company's 8k filed
on February 1, 2021
10.4 Distribution Agreement Incorporated herein by reference to
Exhibit 10.4 to the Company's 8k filed
on February 1, 2021© Edgar Online, source Glimpses
QUANTUM MATERIALS CORP. 
