Item 3.02 Unregistered Sales of Equity Securities.
On August 2, 2022, we closed a financing with GS Capital Partners, LLC for a 10%
convertible note in the principal amount of $200,000. After deducting $10,000 of
original issuance discount and $5,000 of lender expenses, the financing provided
$185,000 of net proceeds to us. The holder of the note, at its option, may
convert the unpaid principal balance of, and accrued interest on, the note into
shares of common stock at a price of $0.055 per share. The Company may prepay
the note at a 5% redemption premium during the first 60 days after issuance,
increasing to 15% thereafter until 120 days from issuance and then to 25% until
180 days after issuance. The note also contains penalty provisions in the event
of our default in repayment of the note (if not converted by the holder into
shares of common stock) on the maturity date of July 26, 2023.
Any issuance of the shares upon conversion of the notes will be exempt from
registration pursuant to the exemption provided by Section 4(2) of the
Securities Act of 1933.
The issuance of such securities were not registered under the Securities Act of
1933, as amended (the "Securities Act"), or any state securities laws. The
issuance of securities and the shares of common stock issuable upon the
conversion of any notes will be issued in reliance on the exemptions from
registration provided by Section 4(a)(2) under the Securities Act and Regulation
D promulgated thereunder
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