Item 3.02 Unregistered Sale of Equity Securities
Extension of Convertible Note:
On February 27, 2019, GBT Technologies Inc. (the "Company") issued Iliad
Research and Trading, L.P. ("Iliad ") a Promissory Note in the principal amount
of $2,325,000 (the "Iliad Note"), due in one year. On February 27, 2020, the
Company and Iliad entered to an Amendment to the Iliad Note pursuant to which
the maturity date of the Iliad Note was extended to August 27, 2020, provided
that the Iliad Note may be converted into shares of common stock of the Company
at a conversion price equal to 80% multiplied by the lowest trading daily VWAP
for the common stock during the 20 trading day period ending on the latest
complete trading day prior to the conversion date. Further, the Company made a
payment to Iliad of an extension fee equal to 7.5% of the outstanding balance of
the Iliad Note resulting in a new balance of the Iliad Note of $2,765,983 and
provided that the Company's failure to deliver shares of common stock within
three trading days of a conversion would result in an event of default.
Iliad has agreed to restrict its ability to convert the Iliad Note and receive
shares of common stock such that the number of shares of common stock held by
it and its affiliates after such conversion or exercise does not exceed 9.99% of
the then issued and outstanding shares of common stock. On July 20, 2020, the
Company and Iliad entered into agreement to extend the maturity of the Iliad
Note until February 27, 2021 in consideration of an extension fee of $1,000.
Following the application of extension fee of $1,000 the principal amount under
the Iliad Note is $2,591,999.11. On February 28, 2021, the Company and Iliad
entered into agreement to further extend the maturity of the Iliad Note until
May 31, 2021 in consideration of an extension fee of $1,000 representing the
third extension of the original note. On May 19, 2021, the Company and Iliad
entered into agreement to further extend the maturity of the Iliad Note until
August 31, 2021 in consideration of an extension fee of $1,000 representing the
fourth extension of the original note. On August 20, 2021, the Company and Iliad
entered into agreement to further extend the maturity of the Iliad Note until
December 31, 2021 in consideration of an extension fee of $1,000 representing
the fourth extension of the original note Following the application of extension
fee of $1,000 the principal amount under the Iliad Note is $345,776.40.
The offer, sale and issuance of the above securities was made to an accredited
investor and the Company relied upon the exemptions contained in Section 4(a)(2)
of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D
promulgated there under with regard to the sale. No advertising or general
solicitation was employed in offering the securities. The offer and sales were
made to an accredited investor and transfer of the common stock will be
restricted by the Company in accordance with the requirements of the Securities
Act of 1933, as amended. The foregoing description of the terms of the above
transactions do not purport to be complete and are qualified in their entirety
by reference to the provisions of such agreements, the forms of which are filed
as exhibits to this Current Report on Form 8-K.
The foregoing information is a summary of each of the agreements involved in the
transactions described above, is not complete, and is qualified in its entirety
by reference to the full text of those agreements, each of which is attached an
exhibit to this Current Report on Form 8-K. Readers should review those
agreements for a complete understanding of the terms and conditions associated
with this transaction.
Item 9.01 Financial Statements and Exhibits
Exhibit Number Description
4.1 Fifth Amendment to Promissory Note between GBT Technologies Inc. and
Iliad Research and Trading, L.P. dated August 19, 2020 - Executed August
20, 2021
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