Item 1.01. Entry into a Material Definitive
Agreement.
On November 17, 2016,
MV Portfolios, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”)
with certain “accredited investors” (as defined in Rule 501(a) of the Securities Act of 1933, as amended, the “Securities
Act”) (the “Investors”) relating to the issuance and sale of 11,250,000 shares of the Company’s common
stock (“Common Stock”) and warrants (each a “Warrant” and collectively, the “Warrants”) to
purchase 5,625,000 shares of Common Stock (the “Warrant Shares”) at an initial exercise price of $0.06 per share for
aggregate gross proceeds of $225,000. Of the foregoing 11,250,000 shares of Common Stock, the Company issued 10,000,000 shares
on November 17, 2016 and entered into an agreement to issue the remaining 1,250,000 shares of Common Stock to an Investor if, and
only if, such Investor’s beneficial ownership of the Common Stock does not exceed 9.99%.
In connection with
the offering, the Company retained a registered FINRA broker dealer (the “Placement Agent”) to act as the placement
agent. For acting as the placement agent, the Company agreed to issue the Placement Agent 900,000 shares of Common Stock and warrants
to purchase 450,000 shares of Common Stock, which warrants are identical to the Warrants issued to the Investors. The Company intends
to use the net proceeds from the offering primarily for working capital. The securities were offered and sold pursuant to an exemption
from registration under Section 4(2) and Regulation D of the Securities Act.
Warrants
The Warrants entitle
the holders to purchase shares of Common Stock at any time on or after the date of issuance until the sooner of: (i) two years
after the Reporting Compliance Date (defined below), or (ii) the four-year anniversary of the issuance date. The “Reporting
Compliance Date” means the date on which the Company shall become current with its reporting obligations under Section 12(g)
of the Securities Exchange Act of 1934, as amended.
The Warrants have an
initial exercise price per share of $0.06 per share; provided that the Warrants provide for full ratchet anti-dilution protection
in case of any issuances of Common Stock below the exercise price (with limited exceptions) (a “Dilutive Issuance”),
such that the exercise price will be reduced to the price per share in the Dilutive Issuance and the number of Warrant Shares issuable
hereunder shall be increased such that the aggregate exercise price payable hereunder, after taking into account the decrease in
the exercise price, shall be equal to the aggregate exercise price prior to such adjustment.
In addition, if the
Company incurs a Filing Compliance Default, the exercise price of the Warrants will be reduced to $0.001 per share, and the number
of Warrant Shares shall be increased as described in the foregoing paragraph, except that the maximum amount of Warrant Shares
to be issued in connection with a Filing Compliance Default shall not exceed in the aggregate for all holders of Warrants issued
on the Closing Date pursuant to the Purchase Agreement, 25% of the Common Stock and Common Stock equivalents, including but not
limited to management options, outstanding on the date of occurrence of such Filing Compliance Default on a fully diluted basis
excluding certain exempt issuances. A “Filing Compliance Default” shall be deemed to have occurred if the Company’s
Reporting Compliance Date is after 120 days from the execution date of the Purchase Agreement.
Purchase Agreement
Pursuant to the Purchase
Agreement, until the later of the time that the Warrants are no longer outstanding or two years after the Reporting Compliance
Date, the Company granted the Investors anti-dilution protection with respect to the shares of Common Stock purchase in the event
that the Company issues or sells any shares of Common Stock or any Common Stock equivalent at a price less than $0.02 per share.
Pursuant to the Purchase
Agreement, at any time commencing on the 120th day after the closing date, if the Company shall fail for any reason to satisfy
the current public information requirement under Rule 144(c) (a “Public Information Failure”) then the Company agreed
to pay to the Investors, in cash, as partial liquidated damages and not as a penalty, an amount in cash equal to 2% of the aggregate
purchase price of the securities purchased and the purchase price of the Warrant Shares held by such Investors on the day of a
Public Information Failure and on every 30th day thereafter until the date such Public Information Failure is cured.
Pursuant to the Purchase
Agreement, with limited exceptions, until the later of the time that the Warrants are no longer outstanding or two years after
the Reporting Compliance Date, upon any proposed issuance by the Company of Common Stock or Common Stock equivalents, the Investors
shall have the right to participate in up to an amount of the financing equal to 50% of such financing on the same terms, conditions
and price provided for in the financing.
Pursuant to the Purchase
Agreement, the Company agreed, with limited exceptions, without the consent of the Investors not to issue any shares of Common
Stock or Common Stock equivalents; unless the Common Stock is sold at an effective cash price equal to or greater than $0.022 per
share (subject to adjustment for stock splits, stock dividends and similar events) at one or more closings at which the Company
receives net proceeds of not less than $1,000,000 and to the extent Common Stock equivalents are issued the holder may not be granted
the right to acquire Common Stock at a price per share of Common Stock less than the exercise price of the Warrants (without giving
effect to any anti-dilution reductions) (such permitted offering, a “Material Offering”). The restrictions set forth
in this paragraph shall continue until the soonest to occur of (i) the Investors and their assigns collectively own less than 25%
of the Common Stock purchased, (ii) a sale of the Company occurs at price of at least $0.10 per share, (iii) one year after the
Reporting Compliance Date, or (iv) the closing of a Material Offering.
Pursuant to the Purchase
Agreement, until the later of the time that the Warrants are no longer outstanding or two years after the Reporting Compliance
Date, the Company agreed not to enter into any equity line of credit or similar agreement or any variable rate transaction (each
as defined in the Purchase Agreement).
The foregoing description
of the offering does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement and the
Warrant, copies of which are being filed as Exhibit 10.1 and Exhibit 4.1 hereto and are incorporated herein by reference.