Item
1.01.
|
Entry
into a Material Definitive Agreement.
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Promissory
Note and Warrants to SBI Investments LLC, 2014-1
On
June 30, 2016 (the “Issuance Date”), Lifelogger Technologies Corp. (“we,” “us,” “our,”
or “Company”) closed on the transactions contemplated by the securities purchase agreement (the “SPA”)
with SBI Investments LLC, 2014-1 (“SBI”), whereby SBI agreed to invest $500,000.00 (the “Purchase Price”)
in our Company in exchange for the Note (as defined below), Series A Warrant (as defined below), and Series B Warrant (as defined
below). Pursuant to the SPA, we issued a promissory note to SBI, in the original principal amount of $550,000.00, which bears
interest at 8% per annum (the “Note”). The Purchase Price was paid to us in full on the Issuance Date. The maturity
date of the Note is June 30, 2017 (the “Maturity Date”). Any amount of principal or interest that is due under the
Note, which is not paid by the Maturity Date, will bear interest at the rate of 24% per annum until it is paid.
Beginning
6 months after the Issuance Date, we are required to make bi-weekly amortization payments (one payment every 2 weeks), consisting
of 1/12
th
of the outstanding principal and interest, until the Note is on longer outstanding (each a “Bi-Weekly
Payment”). Each Bi-Weekly Payment may be made in cash, or in our common stock (“Common Stock”) if certain equity
conditions are satisfied. Such equity conditions include but are not limited to an average daily dollar volume of the Common Stock
greater than $25,000.00 for the 20 trading days prior to a Bi-Weekly Payment. If the equity conditions are satisfied, and we decide
to make a Bi-Weekly payment in Common Stock, then the shares of Common Stock to be delivered shall be calculated as follows: the
amount of the Bi-Weekly Payment divided by the Base Conversion Price (as defined below). The Base Conversion Price shall equal
the lower of (i) the closing price of the Common Stock on June 30, 2016, or (ii) 60% of the average of the lowest VWAP of the
Common Stock for the 20 trading days immediately prior to the date of the Bi-Weekly Payment. Additionally, SBI has the right at
any time, beginning six months after the Issuance Date, to convert amounts owed under the Note into Common Stock at the closing
price of the Common Stock on June 30, 2016. If an event of default under the Note occurs, SBI has the right to convert amounts
owed under the Note into Common Stock at 60% multiplied by the lowest VWAP of the Common Stock for the 20 trading days immediately
prior to the applicable conversion date.
The
Note can be prepaid by us at any time while the Note is outstanding, at a prepayment price of 125% multiplied by the outstanding
principal and interest of the Note, subject to SBI’s discretionary acceptance. If an event of default occurs under the Note,
which is not cured within 10 business days after SBI’s notice to us of such event of default, SBI has the option to require
our redemption of the Note in cash at a redemption price of 130% multiplied by the outstanding principal and interest of the Note.
The Note contains representations, warranties, events of default, beneficial ownership limitations, and other provisions that
are customary of similar instruments.
In
conjunction with the issuance of the Note, we simultaneously issued to SBI a Series A warrant to purchase 125,000 shares of Common
Stock (the “Series A Warrant”) and Series B warrant to purchase 125,000 shares of Common Stock (the “Series
B Warrant”). The Warrants may be exercised by SBI at any time in the 3 year period following the Issuance Date. The exercise
price for each share of the Common Stock under the Series A Warrant is equal to $0.082, subject to certain adjustments as provided
therein. The exercise price for each share of the Common Stock under the Series B Warrant is equal to $0.096, subject to certain
adjustments as provided therein.
We
claim an exemption from the registration requirements of the Securities Act, for the private placement of these securities pursuant
to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder because, among other things, the transaction
did not involve a public offering, SBI is an accredited investor, SBI acquired the securities for investment and not resale, and
we took appropriate measures to restrict the transfer of the securities.
The
foregoing descriptions of the Note, Series A Warrant, Series B Warrant, and SPA are qualified in their entirety by reference to
such Note, Series A Warrant, Series B Warrant, and SPA, which are filed hereto as Exhibits 4.1, 4.2, 4.3, and 10.1, respectively,
and are incorporated herein by reference.