Item
1.01
|
Entry
into a Material Definitive Agreement.
|
JSJ
Financing
On May 16, 2018, NanoFlex Power Corporation,
a Florida corporation (the “Company”) issued to JSJ Investments Inc. (“JSJ”) a convertible promissory
note (the “JSJ Note”) in the aggregate principal amount of $61,000.00 for a purchase price of $58,000.00, with a maturity
date of May 16, 2019 (the “Maturity Date”). The JSJ Note was funded on May 18, 2018. The interest rate under the JSJ
Note is 12% per annum and increases to 18% per annum if an event of default occurs. Under the JSJ Note, JSJ may convert all or
a portion of the outstanding principal and accrued interest of the JSJ Note at any time after the 180
th
day after the
issuance date (the “Pre-Payment Date”) into shares of the Company’s common stock, $0.0001 par value per share
(the “Common Stock”) at a conversion price equal to (i) $0.25 per share until the Pre-Payment Date or (ii) if the
conversion is made after the Pre-Payment Date or pursuant to an event of default under the JSJ Note, a price equal to a 42% discount
to the lowest trading price during the 20 trading days prior to the date of a notice of conversion. JSJ may not convert the JSJ
Note to the extent that such conversion would result in beneficial ownership by JSJ and its affiliates of more than 4.99% of the
Company’s issued and outstanding Common Stock.
If
the Company voluntarily prepays the JSJ Note within 90 days of its issuance, the Company must pay the principal at a cash redemption
premium of 135%, in addition to outstanding interest; if such prepayment is made from the 91
st
day to the 120
th
day after issuance, then such redemption premium is 140%, in addition to outstanding interest; if such prepayment is made
from the 121
st
day to the Pre-Payment Date, then such redemption premium is 145%, in addition to outstanding interest;
and if such prepayment is made after the Pre-Payment Date and before the Maturity Date, then such redemption premium is 150%,
in addition to accrued interest and default interest (if any).
One44
Financing
On
May 22, 2018, the Company entered into a Securities Purchase Agreement (the “One44 SPA”) with One44 Capital LLC (“One44”)
pursuant to which One44 agreed to purchase a convertible redeemable note (the “One44 Note”) in the aggregate principal
amount of $170,000.00. On May 22, 2018, the Company issued the One44 Note. The interest rate under the One144 Note is 12% per
annum and increases to 24% per annum if an event of default occurs. The One44 Note matures on May 22, 2019.
Under
the One44 Note, One44 may convert all or a portion of the outstanding principal of the One44 Note into shares of Common Stock
of the Company at a fixed conversion price of $0.25 per share. Starting on the six month anniversary of the date the One44 Note
was issued, the conversion price shall be equal to 60% of the lowest trading price of the Common Stock during the 20 prior trading
days (including the day upon which a notice of conversion is received). One44 may not convert the One44 Note to the extent that
such conversion would result in beneficial ownership by One44 and its affiliates of more than 4.99% of the Company’s issued
and outstanding Common Stock.
If
the Company prepays the One44 Note within 60 days of its issuance, the Company must pay the principal at a cash redemption premium
of 120%, in addition to accrued interest; if such prepayment is made from the 61
st
day to the 120
th
day
after issuance, then such redemption premium is 130%, in addition to accrued interest; and if such prepayment is made from the
121
st
day to the 180
th
day after issuance, then such redemption premium is 140%, in addition to accrued
interest. After the 180
th
day following the issuance of the One44 Note, there shall be no further right of pre-payment.
The
foregoing summaries of the terms of the JSJ Note, the One44 Note and the One44 SPA are subject to, and qualified in their entirety
by, the agreements and instruments attached hereto as Exhibits 4.1, 4.2 and 10.1, respectively, which are incorporated by reference
herein.