Item 1.01. Entry into a Material Definitive Agreement.
Issuance of Promissory Notes
The Company issued the following eight promissory notes:
(1) Mercer promissory note (the "Mercer Note") datedDecember 2, 2022 , toMercer Street Global Opportunity Fund, LLC ("Mercer") of which the Company received proceeds of$100,000 . The maturity date of the Mercer Note isMay 21, 2023 ; and (2) Diamond promissory note (the "Diamond Note") datedNovember 29, 2022 , toLawrence Diamond ("Diamond") of which the Company received proceeds of$15,000 . The maturity date of the Diamond Note isMay 28, 2023 .Lawrence Diamond is the Chief Executive Officer of the Company; and (3) Howe promissory note (the "Howe Note") datedNovember 29, 2022 , toMichael C. Howe Living Trust ("Howe") of which the Company received proceeds of$15,000 . The maturity date of the Howe Note isMay 28, 2023 . Howe is the CEO of theGood Clinic, LLC ; and (4) Lindstrom promissory note (the "Lindstrom Note") datedNovember 29, 2022 , toIngrid Jenny Lindstrom ("Lindstrom") of which the Company received proceeds of$15,000 . The maturity date of the Lindstrom Note isMay 28, 2023 . Lindstrom is Chief Legal Officer of the Company; and (5) Iturregui promissory note (the "Iturregui Note") datedNovember 29, 2022 , toJuan Carlos Iturregui ("Iturregui") of which the Company received proceeds of$15,000 . The maturity date of the Iturregui Note isMay 28, 2023 . Iturregui serves on the Board of Directors of the Company; and (6) Naqvi promissory note (the "Naqvi Note") dated Novemebr 29, 2022, toFaraz Naqvi ("Naqvi") of which the Company received proceeds of$15,000 . The maturity date of the Naqvi Note isMay 28, 2023 . Naqvi serves on the Board of Directors of the Company; and (7) Schweitzer promissory note (the "Schweitzer Note") datedNovember 29, 2022 , toSheila Schweitzer ("Schweitzer") of which the Company received proceeds of$15,000 . The maturity date of the Schweitzer Note isMay 28, 2023 . Schweitzer serves on the Board of Directors of the Company; and (8) Brodmerkel promissory note (the "Brodmerkel Note", together with the Mercer Note,Diamond Note ,Howe Note ,Lindstrom Note , Iturregui Note,Naqvi Note and Schweitzer Note, the "Notes") datedNovember 29, 2022 , toThomas Brodmerkel ("Brodmerkel", together with Mercer, Diamond, Howe, Lindstrom, Iturregui, Naqvi and Schweitzer, the "Lenders" and Brodmerkel together with Diamond, Howe, Lindstrom, Iturregui, Naqvi and Schweitzer, collectively the "Officer and Director Lenders") of which the Company received proceeds of$15,000 . The maturity date of the Brodmerkel Note isMay 28, 2023 . Brodmerkel is the Chair of the Board of Directors of the Company.
The Principal Amount of the Notes shall convert into the Series E Shares in
accordance with the terms of the Exchange Agreements entered into between the
Company and the Lenders, if the Company successfully lists its common stock on a
national securities exchange on or before
If the Principal Amount is not converted into Series E Shares, the Notes shall bear interest at 10% interest rate per annum, accrued monthly and payable at maturity.
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The aggregate amount payable at maturity will be
The Notes contain a "most favored nations" clause that provides that, so long as the Notes are outstanding, if the Company issues any new security, which the Lenders reasonably believe contains a term that is more favorable than those in the Notes, the Company shall notify the Lenders of such term, and such term, at the option of the Lenders, shall become a part of the Notes. The Lenders will also be issued in the aggregate 512,500 warrants (the "Warrants"), which shall be exercisable on substantially the same terms as the Series A warrant issued in connection with the Company's Series D Convertible Preferred Stock, but priced at the same price as any warrant included in an offering in conjunction with listing at the Nasdaq Capital Market.
Exchange Agreements
In connection with the Notes above, the Company entered into separate exchange
agreements with each of the Officer and Director Lenders (the "Officer and
Director Exchange Agreements"). Mercer entered into an Exchange Agreement with
the Company which was disclosed on the current report on Form 8-K, filed with
the
Pursuant to the Exchange Agreements, the Lenders shall exchange (the "Exchange") the Notes for a number Series E Convertible Preferred Stock (the "Series E Shares") equal to 150% of the principal amount of the Notes (the "Series E Exchange Value").
The Exchange shall occur on the date of the Company's listing of its common stock on a national securities exchange. The Lenders shall surrender to the Company the Notes. Upon such surrender, the Company shall issue to each of the Lenders a number of Series E Shares equal to the Series E Exchange Value.
This summary is not a complete description of all of the terms of the Exchange Agreements and the Notes and is qualified in its entirety by reference to the full text of the Exchange Agreements and the Notes, forms of which are filed as Exhibit 4.1 and 10.1 respectively hereto, which is incorporated by reference into this Item 1.01.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
To the extent required by this Item 2.03, the information contained in Item 1.01 is incorporated herein by reference.
Item 3.02. Unregistered Sales of
To the extent required by this Item 3.02, the information contained in Item 1.01 is incorporated herein by reference.
Item 3.03. Material Modification to Rights of Security Holders.
To the extent required by this Item 3.03, the information contained in Item 1.01 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 4.1* Form Promissory Note in the principal amount of$15,000 datedNovember 29, 2022 10.1* Form Exchange Agreement forLawrence Diamond , datedNovember 29, 2022 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). * Filed herewith.
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