Item
3.02
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UNREGISTERED
SALES OF EQUITY SECURITIES.
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As
previously reported on Form 8-K dated February 21, 2017, we entered into a securities purchase agreement dated February 10, 2017,
and effective February 14, 2017 (the “RD SPA”), with RedDiamond Partners, LLC (“RedDiamond”), pursuant
to which we issued 52,500 shares of Series A Preferred Stock on July 7, 2017 for cash proceeds of $50,000, and 262,500 shares
of Series A Preferred Stock on July 28, 2017 for cash proceeds of $250,000. The Series A Preferred Stock has a mandatory redemption
provision, with redemption payments for these sales to be made on January 8, 2018 and January 15, 2018, each in the amount of
$26,250, followed by ten weekly mandatory redemption payments commencing February 28, 2018, each in the amount of $26,250. The
redemption payments could be paid in cash or by conversion of the Series A Preferred Stock into our common shares, at our option.
Pursuant to the RD SPA, all the of redemption payments are to be accelerated upon the effective date of an S-1 registration statement,
which occurred by Notice of Effectiveness filed on November 13, 2017.
The
proceeds from the issuance of the three notes disclosed below and reported on this Form 8-K, were utilized to pay the RedDiamond
mandatory redemption payments in full with accrued interest, in cash, and not by conversion into any of our common shares.
Effective
December 8, 2017, pursuant to a securities purchase agreement dated December 5, 2017 (the “EMA SPA”), we issued an
unsecured convertible note payable to EMA Financial, LLC, (“EMA”) in the amount of $185,000 (the “EMA Note”).
The Note bears interest at the rate of 8% per annum, and has a maturity date of December 5, 2018. If unpaid by us on or before
the date which is 180 days from the issue date, EMA has the right to convert all or any part of the outstanding amount due under
the Note into fully paid and non-assessable shares of our common stock at a price which is 70% of either the lowest sale price
for our common stock on the principal market during the ten (10) consecutive trading days including and immediately preceding
the conversion date, or the closing bid price, whichever is lower.
As
additional consideration for the EMA Note, we granted EMA 1,200,000 warrants to purchase our common stock at an exercise price
of $0.11 per share until December 5, 2022 (the “EMA Warrant”). The EMA Note was issued to EMA, a U.S. person (as that
term is defined in Regulation S of the Securities Act of 1933, as amended) in a transaction in which we relied on the exemptions
from the registration requirements provided for in Regulation S and/or Section 4(a)(2) of the Securities Act.
A
copy of the form of the EMA SPA, the EMA Note, and the EMA Warrant Agreement are attached to this Form 8-K as Exhibit 10.1, Exhibit
10.2 and 10.3 respectively, and are incorporated by reference herein. The foregoing description of the EMA SPA, the EMA Note and
the EMA Warrant do not purport to be complete and are qualified in their entirety by reference to the EMA SPA, the EMA Note and
the EMA Warrant.
Effective
December 8, 2017, pursuant to a securities purchase agreement dated December 5, 2017 (the “Auctus SPA”), we issued
an unsecured convertible note payable to Auctus Fund, LLC, (“Auctus”) in the amount of $185,000 (the “Auctus
Note”). The Auctus Note bears interest at the rate of 8% per annum, and has a maturity date of December 5, 2018. If unpaid
by us on or before the date which is 180 days from the issue date, Auctus has the right to convert all or any part of the outstanding
amount due under the Auctus Note into fully paid and non-assessable shares of our common stock at a price which is 70% of either
the lowest sale price for our common stock on the principal market during the ten (10) consecutive trading days including and
immediately preceding the conversion date, or the closing bid price, whichever is lower.
As
additional consideration for the Auctus Note, we granted Auctus 1,200,000 warrants to purchase our common stock at an exercise
price of $0.11 per share until December 5, 2022 (the “Auctus Warrant”). The Auctus Note was issued to Auctus, a U.S.
person (as that term is defined in Regulation S of the Securities Act of 1933, as amended) in a transaction in which we relied
on the exemptions from the registration requirements provided for in Regulation S and/or Section 4(a)(2) of the Securities Act.
A
copy of the form of the Auctus SPA, the Auctus Note, and the Auctus Warrant Agreement are attached to this Form 8-K as Exhibit
10.4, Exhibit 10.5 and 10.6 respectively, and are incorporated by reference herein. The foregoing description of the Auctus SPA,
the Auctus Note and the Auctus Warrant do not purport to be complete and are qualified in their entirety by reference to the Auctus
SPA, the Auctus Note and the Auctus Warrant.
Effective
December 14, 2017, pursuant to a securities purchase agreement dated December 13, 2017 (the “SPA”), we issued an unsecured
convertible note payable to Power Up Lending Group, Ltd., (“PUP”) in the amount of $105,000 (the “PUP Note”).
The PUP Note bears interest at the rate of 8% per annum, and has a maturity date of September 20, 2018. If unpaid by us on or
before the date which is 180 days from the issue date, PUP has the right to convert all or any part of the outstanding amount
due under the Note into fully paid and non-assessable shares of our common stock at a price which is 70% of either the lowest
sale price for our common stock on the principal market during the ten (10) consecutive trading days including and immediately
preceding the conversion date, or the closing bid price, whichever is lower.
The
Note was issued to PUP, a U.S. person (as that term is defined in Regulation S of the Securities Act of 1933, as amended) in a
transaction in which we relied on the exemptions from the registration requirements provided for in Regulation S and/or Section
4(a)(2) of the Securities Act.
A
copy of the form of the PUP SPA and the PUP Note are attached to this Form 8-K as Exhibit 10.1, Exhibit 10.7 and 10.8 respectively,
and are incorporated by reference herein. The foregoing description of the PUP SPA and the PUP Note do not purport to be complete
and are qualified in their entirety by reference to the PUP SPA and the PUP Note.