Item 1.01 Entry into a Material Definitive Agreement
The Securities Purchase Agreement:
The Purchase Agreement provides in part that Asher will purchase the Note for
In addition to certain warranties and representations made by both the Company and Asher, the Purchase Agreement grants Asher a Right of First Refusal with respect to any future financings undertaken by the Company.
The Convertible Promissory Note:
The Note is in the principal amount of
The Note may be prepaid in whole together with any accrued interest for a period of 180 days following the execution of the Note subject. In the event that the Company exercises its option to repay the Note, the Company will be obligated to pay Asher an amount equal to between 110% and 130% multiplied by the principal balance plus any accrued interest. The multiple which the Company is required to pay is dependent upon the date of repayment.
After the expiration of 180 days following the date of the Note, the Company shall have no right of prepayment.
Asher has no right of conversion for the first 180 days following execution of the Note. If Asher chooses to convert all or any portion of the Note, the conversion price shall be calculated by multiplying the market price by 58%, representing a 42% discount rate (the "Conversion Price").
The Conversion Price is subject to adjustment in the case of a merger, consolidation, recapitalization, reorganization or other similar events.
The foregoing represents a summary of the terms and conditions of the referenced agreements which are attached as exhibits. For more complete information regarding the obligations of both parties, you are urged to review these agreements in their entirety.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.
Exhibit No. Description
Exhibit 10.1 Securities Purchase Agreement Exhibit 10.2 Convertible Promissory Note