Item 1.01 Entry into a Material Definitive Agreement.
After its board of directors had granted approval, on April 1, 2020 the
Registrant entered into a Convertible Note Purchase Agreement (the "Agreement")
with Citrine S A L Investment & Holdings Ltd, WealthStone Private Equity Ltd,
WealthStone Holdings Ltd, Golden Holdings Neto Ltd, Beezz Home Technologies Ltd,
Citrine Biotech 5 LP, Citrine High Tech 6 LP, Citrine High Tech 7 LP, Citrine 8
LP, Citrine 9 LP and Citrine Biotech 10 LP (together, the "Buyer"), all of which
are affiliated with the Registrant. The Buyer parties desire to support the
Registrant as it continues its activities at a time of uncertainty in world
capital markets caused by the spread of coronavirus disease 2019 (COVID-19).
Under the Agreement, the Buyer agrees to purchase and the Registrant agrees to
issue and sell, for up to an aggregate principal amount of $1,800,000.00, notes
convertible into shares of common stock of the Registrant (the "Notes"), for a
period starting on April 1, 2020 and ending upon the earlier of (i) 6 months
thereafter and (ii) the consummation of a public offering by the Registrant. The
Notes will bear interest at a rate of six percent (6%) with respect to amounts
paid that are used for working capital purposes of the Registrant, provided that
amounts paid that are used for investment activities of the Registrant may be
subject to different interest rates, as will be set forth in the Guidelines. The
conversion price per share of Common Stock shall equal 85% multiplied by the
market price (as defined in the Note), representing a discount of 15%. The
payment for each Note must be delivered 14 business days after delivery of the
respective draw down notice, and each Note will mature 18 months thereafter. The
interval between one draw down and the next must be at least thirty (30) days,
provided that the Buyer may waive this requirement. Each draw down notice
provided to the Buyer must be for an amount between $50,000 and $350,000, set at
the Registrant's discretion. The Registrant must use the amounts paid for the
Notes in accordance with guidelines which are to be provided by the Buyer within
14 business days following April 1, 2020 (the "Guidelines"). The Buyer shall
decide upon and provide to the Registrant the names of the Buyer parties which
will provide the funds to the Registrant in respect of the Note, including the
respective amounts to be transferred to the Registrant by each such Buyer party.
The Buyer shall have the right, from time to time and at its discretion, to add
other entities to the list comprising the Buyer. The Buyer may participate
alongside the Registrant in any investment the Registrant makes for as long as
the Agreement is in effect. The Registrant may at any time prepay an outstanding
Note (principal and accrued interest) in full by paying the Buyer an amount in
cash equal to 115% multiplied by the then outstanding principal amount of the
Note, as well as the accrued and unpaid interest on the unpaid principal amount
of the Note, provided however that in the event the Registrant seeks to exercise
this right the Buyer will first have the option to fully convert the Note, or
any remaining amount outstanding under it, into Common Stock of the Registrant,
and the conversion amount will be equal to the amount the Registrant would have
paid to the Buyer had the Buyer not exercised this option.
The foregoing description of the Convertible Note Purchase Agreement and its
exhibits does not purport to be complete and is qualified in its entirety by
reference to the full text of the form of Convertible Note Purchase Agreement
which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
See Item 1.01 above.
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