Item 1.01 Entry into a Material Definitive Agreement
C6 Capital Agreement for the Purchase and Sale of Future
Receipts
On March 6, 2018,
GEX Management, Inc., a Texas corporation (“
GEX
” or the “
Company
”), and C6 Capital, LLC (“
C6
Capital
”), entered into an agreement for the purchase and sale of future receipts (“
C6 Agreement
”).
Pursuant to the terms and conditions of the C6 Agreement, GEX sold 15% of GEX’s proceeds of each future sale made by GEX
of up to $1,066,050 (“
Future Sales Amount
”) to C6 Capital for an immediate cash payment by C6 Capital of $772,500
(“
Purchase Price
”). The C6 Agreement includes an origination fee of $23,175, and daily payments in the amount
of $5,077 to be made by GEX to C6 Capital until the Future Sales Amount is paid in full. The terms of the C6 Agreement contain
customary and standard terms with respect to these types of contracts.
Carl Dorvil, chief
executive officer of the Company, has entered into a separate personal guaranty of performance with C6 Capital, in which Mr. Dorvil
personally guarantees the complete performance of the Company’s obligations described in the C6 Agreement. The foregoing
is a summary of the terms of the C6 Agreement, does not purport to be complete and is qualified in its entirety by reference to
the C6 Agreement, a copy of which is attached as Exhibit 10.4 and incorporated herein by reference.
Payroll Express Membership Interest
Purchase Agreement
On May 4, 2018,
the Company entered into a membership interest purchase agreement (“
Purchase Agreement
”) to purchase 25% member
interest in Payroll Express, LLC, a California limited liability company (“
Payroll Express
”), for the purchase
price of $500,000 from Julia Hashemieh, an individual residing in California (“
Ms. Hashemieh
”).
Pursuant to the
terms of the Purchase Agreement, Ms. Hashemieh represented and warranted to be the sole owner of all the issued and outstanding
member interest of Payroll Express. Payroll Express, independent of Ms. Hashemieh individually, made further representations and
warranties in the Purchase Agreement to the Company. The Purchase Agreement also grants the Company the right, but not the obligation,
to purchase an additional 25% member interest from Ms. Hashmehieh under similar terms.
The foregoing is
a summary of the terms of the Purchase Agreement, does not purport to be complete and is qualified in its entirety by reference
to the Purchase Agreement, a copy of which is attached as Exhibit 10.5 and incorporated herein by reference.
Convertible Debt Financing
On April 26, 2018,
the Company entered into securities purchase agreements with two institutional investors (“
Investors
”), pursuant
to which the Company issued two separate convertible promissory notes, each in the original principal sum of up to $500,000 (“
Notes
”)
bearing interest at the rate of 10% per annum. The initial amount advanced under each Note was $90,000 and $87,500, respectively,
in each case giving effect to an original issue discount (“
OID
”) of 10% and 12.5%, respectively, and additional
amounts can be advanced as agreed to by the parties. The Notes are convertible into shares of Company common stock at the initial
conversion price of $2.50 per share, and commencing six months after the issuance, at the lesser of (i) $2.50 per share and (ii)
65% of the market price. The Company may prepay any amount outstanding under the Notes; during the initial 60 day period after
the issuance, the prepayment price equals 120%; during the period commencing 61 days from issuance until 120 days from issuance,
the prepayment price equals 138%; and during the period commencing 121 days from issuance until 180 days from issuance, the prepayment
price equals 145%. Thereafter, the Notes are not pre-payable.
The foregoing is
a summary of the terms of the securities purchase agreement and the Notes, does not purport to be complete and is qualified in
its entirety by reference to the form of securities purchase agreement, a copy of which is attached as Exhibit 10.1, and the form
of Note which is attached as Exhibit 10.2.
The
Company granted certain registration rights in connection with the issuance of one of the notes, a copy of which is attached
as Exhibit 10.3.