Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreement and Convertible Promissory Note
On
The Note was purchased for, and has an initial face amount of,
The Note is unsecured. So long as the Company has any obligation under the Note, the Company is prohibited from selling, leasing or otherwise disposing of any significant portion of its assets outside the ordinary course of business without the prior written consent of the holder of the Note.
The Note contains certain customary events of default, including failure to pay amounts due under the Note (subject to a five day cure period); breach of the Company's covenants under the Note, subject to a 20 day cure period; breach of the representations and warranties of the Company; the occurrence of certain bankruptcy related events; the delisting of the Company's common stock from a national securities exchange or the OTC Markets; failure to comply with the requirements of the Securities Exchange Act of 1934, as amended; dissolution, liquidation, cessation of operations; certain financial statement restatements; replacement of the Company's transfer agent; and certain cross-defaults of other agreements entered into with the Purchaser. Upon the occurrence of an event of default under the Note, the Note becomes immediately due and payable and we are required to pay the Purchaser the principal, accrued interest, Pre-Payment Penalty, and default interest due under the Note. If such default amount is not paid within five business days of written notice thereof from the Purchaser, the Purchaser can convert the amount due to the Purchaser into common stock of the Company as discussed below.
Upon an event of default under the Note, the amounts due to the holder of the
Note may be converted, in whole or part, by the holder, into common stock of the
Company, at a conversion price equal to the greater of (a)
The closing of the transactions contemplated by the Purchase Agreement,
including the sale of the Note, occurred on
The Purchase Agreement included standard and customary representations of the
parties; and included certain positive and negative covenants (including
obligations to indemnify the Purchaser in certain cases upon breach thereof),
which included the requirement that we use the funds raised through the sale of
the Note only for working capital, and that we reimburse
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The foregoing summary of the Purchase Agreement and Note, is qualified in its entirety by reference to the full text of the Purchase Agreement and Note, which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated into this Item 1.01 in their entirety, 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 in Item 1.01 of this Current Report on Form 8-K relating to the Note, and the Note attached hereto as Exhibit 10.1, are incorporated by reference into this Item 2.03 in their entirety.
Item 3.02 Unregistered Sales of
The information in Item 1.01 relating to the Note and the sale of the Note, is
incorporated by reference into this Item 3.02 in its entirety. We claim an
exemption from registration pursuant to Section 4(a)(2) and/or Rule 506 of
Regulation D of the Securities Act of 1933, as amended (the "Securities Act"),
for the sale of the Note, since the foregoing sale did not involve a public
offering, the recipient was an "accredited investor", the recipient acquired the
securities for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof. The securities were
offered without any general solicitation by us or our representatives. The
securities are subject to transfer restrictions, and the certificates evidencing
the securities contain an appropriate legend stating that such securities have
not been registered under the Securities Act and may not be offered or sold
absent registration or pursuant to an exemption therefrom. The securities were
not registered under the Securities Act and such securities may not be offered
or sold in
In the event the Note is converted in full on the Maturity Date, without taking
into account any default interest, Pre-Payment Penalty, or other penalties which
may accrue thereunder, a maximum of 6,293,333,333 shares of common stock would
be issuable to the holder thereof upon conversion thereof, provided that this
maximum number of shares assumes that the Variable Conversion Rate would be
equal to or less than
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 1.01 of this Current Report on Form 8-K relating to the Purchase Agreement and Note, and the form of Purchase Agreement and Note attached hereto as Exhibits 10.1 and 10.2, including, but not limited to, the restrictions on the Company's use of working capital and other limitations upon the payment of dividends thereunder are incorporated by reference into this Item 3.03 in their entirety.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following Exhibits are filed herewith:
Exhibit No. Description 10 .1 * Securities Purchase Agreement dated January 28, 2022, by and between Rapid Therapeutic Science Laboratories, Inc., and J. Scott Suggs. 10.2 *+$400,000 Promissory Note dated January 28, 2022, by Rapid Therapeutic Science Laboratories, Inc., in favor of J. Scott Suggs. 104 Inline XBRL for the cover page of this Current Report on Form 8-K *Filed herewith.
+Certain personal information has been redacted from the exhibit (and replaced with X's) in accordance with Item 6.01(a)(6) of Regulation S-K, as disclosure of such information would constitute an unwarranted invasion of personal privacy.
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