|
Item 1.01.
|
Entry into a Material Definitive Agreement.
|
Securities Purchase Agreement, Convertible
Promissory Note and Warrant with Auctus Fund, LLC.
On August 19, 2019, Ozop Surgical Corp.
a Nevada corporation (the “Company”) entered into a securities purchase agreement (the “SPA”) with Auctus
Fund, LLC, a Delaware limited liability company (the “Investor”), pursuant to which the Company agreed to issue to
the Investor an 8% secured convertible promissory note, (the “Note”) in the aggregate principal amount of $85,000 in
exchange for a purchase price of $75,000.
Pursuant to the SPA, the Company agreed
to pay the Investor $10,000 to cover the Investor’s due diligence expenses incurred in connection with the SPA and Note,
which is to be offset against the proceeds of the Note. The proceeds will be used by the Company for working capital and other
general corporate purposes. Pursuant to the SPA, the Company agreed not to conduct any equity (or debt with an equity component)
financing (the “Future Offering”), other than certain excepted issuances as set forth in the SPA, during the period
beginning on the closing date of the SPA and ending12 months following such date without first giving the Investor notice of the
Future Offering and allowing the Investor the option to purchase the securities being offered in the Future Offering on the same
terms as contemplated by such Future Offering. The SPA includes customary representations, warranties and covenants by the Company
and customary closing conditions.
The Note matures on August 19, 2020. Additionally,
the Company agreed pursuant to the Note, that so long as any funds are owed by the Company under the Note, that the Company will
not incur “indebtedness,” as such term is defined in the Note, that is senior to the Note.
The Note is convertible into
shares of the Company’s common stock, $0.001 par value per share, at any time beginning from the issuance date of the Note,
at a conversion price equal to the lesser of (i) the lowest Trading Price (as defined in the Note) during the previous twenty
(20) Trading Day period ending on the latest complete Trading Day prior to the date of the Note, and (ii) the Variable Conversion
Price (as defined therein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower
relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events). Further in accordance with the terms of the Note, while the
Note is outstanding, if any third party has the right to convert any funds into shares of the Company’s common stock at
a discount to market greater than the conversion price under the Note in effect at that time, then the Investor in its sole discretion,
may utilize such greater discount percentage until the Note is no longer outstanding. Additionally, pursuant to the Note, if at
any time while the Note is outstanding, the Company either sells shares of its common stock at a price lower than the conversion
price then in effect under the Note, or if the Company sells any securities exercisable, exchangeable or convertible into shares
of the Company’s common stock at a price lower than the conversion price then in effect under the Note, then the conversion
price under the Note shall be adjusted to equal such lower price. Provided, however, that the Investor may not convert the Note
to the extent that such conversion would result in the Investor’s beneficial ownership being in excess of 4.99% of the Company’s
issued and outstanding common stock together with all shares owned by the Investor and its affiliates.
The Note carries a pre-payment
penalty if the Note is paid off in 90, 180, 210, 240 or 269 days following the issue date. The pre-payment penalty is based on
the then outstanding principal at the time of pay off plus accrued and unpaid interest multiplied by 120%, 130%, 135%, 140% and
145% respectively. After the expiration of 269 days following the issue date, the Company shall have no right of prepayment.
In connection with the Note, and pursuant
to the SPA, the Company agreed to issue to the Investor, a warrant (the “Warrant”) to purchase 28,333 shares of the
Company’s common stock as a commitment fee. The Warrant has a term of five (5) years and an exercise price of $1.50.
The foregoing descriptions
of the SPA, the Note, and the Warrant, do not purport to be complete and are qualified in their entirety by reference to the full
text of the transaction documents, copies of which are filed as Exhibits 10.1, 10.2 and 10.3. respectively, to this Current Report
on Form 8-K and are incorporated by reference herein.
Securities Purchase Agreement
and Convertible Promissory Note with GW Holdings Group, LLC.
On
August 21, 2019, the Company entered into a securities purchase agreement (the “GW SPA”) with GW Holdings Group, LLC
(“GW”) pursuant to which the Company agreed to issue a 12% Convertible Promissory Note, (the “GW Note”)
in the principal amount of $55,125 in exchange for a purchase price of $50,000, with $2,625 representing the original issue discount.
The GW Note was funded by GW on August 21, 2019, when the Company received $50,000, after lender costs of $2,500. The GW SPA includes
customary representations, warranties and covenants by the Company and customary closing conditions.
The
GW Note matures on August 21, 2020. The GW Note is convertible into shares of the Company’s common stock, at a conversion
price equal to 58% multiplied by the average of the two lowest trading prices during the 20 trading day period ending on the last
completed trading date in the OTC Markets prior to the date of conversion. The GW Note carries a pre-payment penalty if the Note
is paid off in 60 or every 30 days thereafter up to 180 days following the issue date. The pre-payment penalty is based on the
then outstanding principal at the time of pay off plus accrued and unpaid interest multiplied by 120%, if paid before 60 days,
and additional 5% increments accumulating for every 30 days thereafter up to 180 days. After the expiration of 180 days following
the issue date, the Company shall have no right of prepayment. The Company also issued a Back End Note to GW (the “GW Back
End Note”), under the same conditions and terms as the GW Note. The GW Back End Note was collateralized by the issuance to
the Company by GW on August 21, 2019, of a $52,500 Collateralized Secured Promissory Note (the “Promissory Note”) due
May 21, 2020.
The
foregoing descriptions of the GW SPA, the GW Note, the GW Back End Note and the Promissory Note do not purport to be complete
and are qualified in their entirety by reference to the full text of the GW SPA, GW Note, the GW ack End Note and the Promissory
Note, copies of which are filed as Exhibits 10.4, 10.5,10.6 and 10.7, respectively, to this Current Report on Form 8-K and are
incorporated by reference herein.
Securities Purchase Agreement
and Convertible Promissory Note with Crossover Capital Fund I, LLC
On
August 23, 2019, the Company entered into a securities purchase agreement (the “CC SPA”) with Crossover Capital Fund
I, LLC (“CC”) pursuant to which the Company agreed to issue a 12% Convertible Promissory Note, (the “CC Note”)
in the principal amount of $37,800 in exchange for a purchase price of $36,000, with the $1,800 difference representing the original
issue discount. The CC Note was funded by CC on August 23, 2019, when the Company received $33,500, after lender costs of $2,500.
The CC SPA includes customary representations, warranties and covenants by the Company and customary closing conditions.
The
CC Note matures on May 23, 2020. The CC Note is convertible into shares of the Company’s common stock, at a conversion
price equal to 58% multiplied by the average of the two lowest trading prices during the 20- trading day period ending on the
last completed trading date in the OTC Markets prior to the date of conversion. The CC Note carries a pre-payment penalty if
the Note is paid off in 60 or every 30 days thereafter up to 180 days following the issue date. The pre-payment penalty is
based on the then outstanding principal at the time of pay off plus accrued and unpaid interest multiplied by 120%, if paid
before 60 days, and additional 5% increments accumulating for every 30 days thereafter up to 180 days. After the expiration
of 180 days following the issue date, the Company shall have no right of prepayment.
The foregoing descriptions of the CC SPA
and the CC Note do not purport to be complete and are qualified in their entirety by reference to the full text of the CC SPA
and CC Note, copies of which are filed as Exhibits 10.8 and 10.9, respectively, to this Current Report on Form 8-K and are
incorporated by reference herein.