Item 1.01. Entry into a Material Definitive Agreement.
On January 20, 2021, One World Pharma, Inc. (the "Company") completed the sale
of a Promissory Note in the principal amount of $290,000 (the "Note") to AJB
Capital Investments LLC (the "Investor") for a purchase price of $281,300,
pursuant to a Securities Purchase Agreement between the Company and the Investor
(the "Purchase Agreement"). The transaction was effected pursuant to Section
4(a)(2) of the Securities Act of 1933, as amended and Rule 506(b) promulgated
thereunder.
The Note matures on October 20, 2021 (the "Maturity Date"), bears interest at a
rate of 10% per annum, and, following an event of default only, is convertible
into shares of the Company's common stock at a conversion price equal to the
lesser of 90% of the lowest trading price during (i) the 20 trading day period
preceding the issuance date of the note, or (ii) the 20 trading day period
preceding date of conversion of the Note. The Note is also subject to covenants,
events of defaults, penalties, default interest and other terms and conditions
customary in transactions of this nature.
Pursuant to the Purchase Agreement, the Company will pay a commitment fee to the
Investor in the amount of $200,000 (the "Commitment Fee") in the form of
2,000,000 shares of the Company's common stock (the "Commitment Fee Shares").
During the six month period following the six month anniversary of the closing
date (the "Adjustment Period"), the Investor shall be entitled to be issued
additional shares of common stock of the Company to the extent the Investor's
sale of the Commitment Fee Shares has resulted in net proceeds in an amount less
than the Commitment Fee. If the Company repays the Note on or prior to the
Maturity Date, the Company may redeem 1,000,000 of the Commitment Fee Shares for
a nominal redemption price of $1.00.
The obligations of the Company to the Investor under the Note and the Purchase
Agreement are secured by a lien on the Company's assets pursuant to a Security
Agreement between the Company and the Investor.
The information set forth above is qualified in its entirety by reference to the
actual terms of the Note, the Purchase Agreement, and the Security Agreement,
which have been filed as Exhibits 4.1, 10.1 and 10.2, respectively, to this
Current Report on Form 9-K, and which are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit 4.1 Promissory Note of One World Pharma, Inc. in the principal amount
of $290,000 issued to AJB Capital Investments LLC, dated January
20, 2021
Exhibit 10.1 Securities Purchase Agreement, dated as of January 20, 2021,
between One World Pharma, Inc. and AJB Capital Investments LLC
Exhibit 10.2 Security Agreement, dated as of January 20, 2021, between One
World Pharma, Inc. and AJB Capital Investments LLC
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