Item
1.01 Entry into a Material Definitive Agreement.
Quick
Capital, LLC Convertible Note Transaction
On
October 12, 2020, American International Holdings Corp. (the “Company”, “we” or “us”)
entered into a Securities Purchase Agreement with Quick Capital LLC an accredited investor (“Quick Capital”),
pursuant to which the Company sold Quick Capital a convertible promissory note in the principal amount of $56,750 (the “Quick
Capital Note”) in consideration for a $52,750 payment. The principal amount of the Quick Capital Note includes an advancement
of legal fees equal to Quick Capital of $2,750 and carries a lump-sum interest payment for the entire twelve (12) months of the
note, at eight percent (8%) per annum, equal to $4,000 which was capitalized upon the entry into the note. The Quick Capital Note
has a maturity date of October 12, 2021. Among other requirements, the Securities Purchase Agreement requires us to cause the
par value of our common stock to be reduced below $0.00001, if the closing bid price of our common stock shall ever fall below
$0.001 per share. Upon an event of default, the Quick Capital Note accrues interest at the lesser of 24% per annum and the highest
rate provided by law.
The
Company has the right to prepay the Quick Capital Note at any time during the first six months the note is outstanding at the
rate of (a) 115% of the unpaid principal amount of the note plus interest, during the first 60 days the note is outstanding, (b)
125% of the unpaid principal amount of the note plus interest between days 61 and 120 after the issuance date of the note, and
(c) 135% of the unpaid principal amount of the note plus interest between days 121 and 180 after the issuance date of the note.
The Quick Capital Note may not be prepaid after the 180th day following the issuance date, unless Quick Capital agrees
to such repayment and such terms.
The
Quick Capital Note contains covenants preventing us from repurchasing any stock, borrowing any money, selling any significant
portion of its assets, making any advances and requiring the Company, upon the receipt of any funds and with notice to Quick Capital,
to use such funds to repay the Quick Capital Note.
Quick
Capital may in its option, at any time after the date of the note, convert the outstanding principal and interest on the Quick
Capital Note into shares of our common stock at a conversion price per share equal to the lesser of a) $0.50 per share, b) 60%
(the “Discount”) of the lowest daily volume weighted average price per share (“VWAP”) of
our common stock during the 10 days trading days prior to the date of conversion; and c) 60% of the lowest daily VWAP of our common
stock during the 10 days trading days prior to the date of the Quick Capital Note. The conversion price is adjustable downward
if within three business days of the date of any conversion notice, the Company’s common stock has a closing bid price 5%
or lower than the conversion rate set forth in the notice of conversion. The Discount decreases by 10% in the event the Company’s
common stock is not eligible to be delivered via DWAC and decreases by an additional 15% if the Company’s common stock is
‘chilled’ by the DTC system (while such ‘chill is in place’). Separately, if the Company ceases to be
a reporting company or the note cannot be converted into free trading shares 181 days after the date of the note, the Discount
decreases by an additional 15%. Quick Capital can deduct $750 from each conversion amount to cover its deposit fees. The conversion
rate is also subject to a favored nations provision (subject to certain exceptions), allowing Quick Capital to use any more favorable
conversion terms of other parties converting securities of the Company. The conversion rate is also further adjustable in the
event of the occurrence of certain major transaction announcements. In the event the conversion price falls below $0.01 per share
at any time, the Discount is lowered to 40% and $15,000 is added to the principal amount of the note. We are also required to
pay certain penalties in the event we fail to timely deliver stock upon conversion of the Quick Capital Note.
We
agreed to reserve a number of shares of our common stock which may be issuable upon conversion of the Quick Capital Note at all
times (initially 2,000,000 shares), and that the amount of the note increases by $5,000 each time Quick Capital asks us to increase
such reserve, and we fail to increase such reserve within three business days.
The
Quick Capital Note provides for standard and customary events of default such as failing to timely make payments under the Quick
Capital Note when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting
requirements and the failure to maintain a listing on the OTC Markets. The Quick Capital Note also contains customary positive
and negative covenants. The Quick Capital Note includes penalties and damages payable to Quick Capital in the event we do not
comply with the terms of such note, including in the event we do not issue shares of common stock to Quick Capital upon conversion
of the note within the time periods set forth therein. Additionally, upon the occurrence of certain defaults, as described in
the Quick Capital Note, we are required to pay Quick Capital significant liquidated damages in addition to the amount owed under
the Quick Capital Note. The note also includes various other penalties, triggers which increase the principal amount of the note,
and increased conversion discount rights, which apply under various circumstances upon our failure to comply with the terms of
the Quick Capital Note. The Quick Capital Note also includes piggy back registration rights and in the event we fail to comply
with such rights, the amount of the note increases by 25% (but not less than $15,000).
Additionally,
in the event that Quick Capital delivers an opinion to us to enable it to sell the shares of common stock issuable upon conversion
of the note and we fail to accept the opinion within three business days, we are required to pay Quick Capital a penalty of 5%
of the outstanding amount of the Note per day, plus accrued and unpaid interest, payable in cash or shares at the option of Quick
Capital.
The
Quick Capital Note includes a most favored nations provision which allows Quick Capital the right to modify the Quick Capital
Note to provide for any more favorable terms offered in any future financing transaction, subject to certain limited exceptions.
At
no time may the Quick Capital Note be converted into shares of our common stock if such conversion would result in Quick Capital
and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock.
We
hope to repay the Quick Capital Note prior to any conversion. In the event that the Quick Capital Note is not repaid in cash in
its entirety, Company shareholders may suffer significant dilution if, and to the extent that, the balance of the Quick Capital
Note is converted into common stock.
The
description of the Quick Capital Note and Securities Purchase Agreement above is not complete and is qualified in its entirety
by the full text of the Quick Capital Note and Securities Purchase Agreement, filed herewith as Exhibits 10.4 and 10.3,
respectively, which are incorporated by reference in this Item 1.01.