Item 1.01
Entry into a Material Definitive Agreement
Geneva Securities
Purchase Agreement
Effective October 1,
2018, MyDx, Inc. (the “Company”) entered into a securities purchase agreement (the “Geneva Purchase Agreement”)
with Geneva Roth Remark Holdings, Inc., (“Geneva”), pursuant to which Geneva purchased a 10% unsecured convertible
promissory note (the “Geneva Note”) from the Company in the aggregate principal amount of $74,800.00, such principal
and the interest thereon convertible into shares of the Company’s common stock at the option of Geneva.
The purchase price
of $74,800.00 of the Geneva Note was paid in cash by Geneva on October 2, 2018. After payment of transaction-related expenses,
net proceeds to the Company from the Geneva Note totaled $65,000.00.
The maturity date of
the Geneva Note is October 1, 2019 (the “Geneva Maturity Date”). The Geneva Note shall bear interest at a rate of ten
percent (10%) per annum (the “Geneva Interest Rate”), which interest shall be paid by the Company to Geneva in shares
of common stock at any time Geneva sends a notice of conversion to the Company. Geneva is entitled to, at its option, convert all
or any amount of the principal face amount and any accrued but unpaid interest of the Geneva Note into shares of the Company’s
common stock, at any time after March 20, 2019, at a conversion price for each share of common stock equal to 71% multiplied by
the average of the lowest three (3) trading prices (as defined in the Geneva Purchase Agreement) for the common stock during the
fifteen (15) Trading Day period (as defined in the Geneva Purchase Agreement) ending on the latest complete trading day prior to
the conversion date.
The Geneva Note may
be prepaid until 170 days from the issuance date with the following penalties: (i) if the Geneva Note is prepaid within thirty
(30) days of the issuance date, then the prepayment premium shall be 105% of the face amount plus any accrued interest; (ii) if
the Geneva Note is prepaid during the period beginning on the date which is thirty-one (31) days following the issuance date, and
ending on the date which is sixty (60) days following the issuance date, then the prepayment premium shall be 110% of the face
amount plus any accrued interest; (iii) if the Geneva Note is prepaid during the period beginning on the date which is sixty-one
(61) days following the issuance date, and ending on the date which is ninety (90) days following the issuance date, then the prepayment
premium shall be 115% of the face amount plus any accrued interest; (iv) if the Geneva Note is prepaid during the period beginning
on the date which is ninety-one (91) days following the issuance date, and ending on the date which is one hundred twenty (120)
days following the issuance date, then the prepayment premium shall be 120% of the face amount plus any accrued interest; (v) if
the Geneva Note is prepaid during the period beginning on the date which is one hundred twenty-one (121) days following the issuance
date, and ending on the date which is one hundred fifty (150) days following the issuance date, then the prepayment premium shall
be 125% of the face amount plus any accrued interest; and (vi) if the Geneva Note is prepaid during the period beginning on the
date which is one hundred fifty-one (151) days following the issuance date, and ending on the date which is one hundred seventy
(170) days following the issuance date, then the prepayment premium shall be 130% of the face amount plus any accrued interest.
Such prepayment redemptions must be closed and funded within three days of giving notice of redemption or the right to redeem shall
be null and void.
The Company shall reserve
270,905,432 of its authorized and unissued common stock (the “Geneva Reserved Amount”), free from preemptive rights,
to provide for the issuance of Common Stock upon the full conversion of the Geneva Note. Upon full conversion of the Geneva Note,
any shares remaining in such reserve shall be cancelled. The Company shall at all times reserve a minimum of six (6) times the
number of shares required if all outstanding principal under the Geneva Note would be fully converted and will from time to time
increases the Geneva Reserved Amount in accordance with the Company’s obligations under the Geneva Note.
Pursuant to the terms
of the Geneva Purchase Agreement, for so long as Geneva owns any shares of common stock issued upon conversion of the Geneva Note
(the “Geneva Conversion Shares”), the Company covenants to secure and maintain the listing of such shares of common
stock. The Company is also subject to certain customary negative covenants under the Geneva Note and the Geneva Purchase Agreement,
including but not limited to the requirement to maintain its corporate existence and assets, subject to certain exceptions, and
not to make any offers or sales of any security under circumstances that would require registration of or stockholder approval
for the Geneva Note or the Geneva Conversion Shares.
Any shares to be issued
pursuant to any conversion of the Geneva Note shall be issued pursuant to an exemption from the registration requirement of the
Securities Act of 1933, as amended (the “Securities Act”) provided in Section 4(a)(2) of the Securities Act.
GS Capital Securities
Purchase Agreement
Effective October 4,
2018 the Company entered into a securities purchase agreement (the “GSC Purchase Agreement”) with GS Capital Partners
LLC, (“GSC”, and together with Geneva, the “Investors”), pursuant to which GSC purchased two 8% unsecured
convertible promissory notes from the Company in the aggregate principal amount of $125,000.00, comprised of the first note in
the amount of $75,000.00 (the “First GSC Note”), and the second note in the amount of $50,000.00 (the “Second
GSC Note”, and together with the First GSC Note, the “GSC Notes”, and together with the Geneva Note, the “Notes”),
such principal and the interest thereon convertible into shares of the Company’s common stock at the option of GSC.
The purchase price
of $75,000.00 of the First GSC Note was paid in cash by GSC on October 5, 2018. After payment of transaction-related expenses,
net proceeds to the Company from the First GSC Note totaled $68,500.00.
The maturity date of
the First GSC Note is October 4, 2019 (the “the First GSC Maturity Date”). The First GSC Note shall bear interest at
a rate of eight percent (8%) per annum (the “First GSC Interest Rate”), which interest shall be paid by the Company
to GSC in shares of common stock at any time GSC sends a notice of conversion to the Company. GSC is entitled to, at its option,
convert all or any amount of the principal face amount and any accrued but unpaid interest of the First GSC Note into shares of
the Company’s common stock, at any time, at the conversion price specified in the for each share of common stock equal to
71% of the average of the three lowest closing bid prices of the common stock for the fifteen prior trading days including the
day upon which a notice of conversion is received by the Company or its transfer agent.
The First GSC Note
may be prepaid until 180 days from the issuance date with the following penalties: (i) if the First GSC Note is prepaid within
thirty (30) days of the issuance date, then the prepayment premium shall be 105% of the face amount plus any accrued interest;
(ii) if the First GSC Note is prepaid during the period beginning on the date which is thirty-one (31) days following the issuance
date, and ending on the date which is sixty (60) days following the issuance date, then the prepayment premium shall be 110% of
the face amount plus any accrued interest; (iii) if the First GSC Note is prepaid during the period beginning on the date which
is sixty-one (61) days following the issuance date, and ending on the date which is ninety (90) days following the issuance date,
then the prepayment premium shall be 115% of the face amount plus any accrued interest; (iv) if the First GSC Note is prepaid during
the period beginning on the date which is ninety-one (91) days following the issuance date, and ending on the date which is one
hundred twenty (120) days following the issuance date, then the prepayment premium shall be 120% of the face amount plus any accrued
interest; (v) if the First GSC Note is prepaid during the period beginning on the date which is one hundred twenty-one (121) days
following the issuance date, and ending on the date which is one hundred fifty (150) days following the issuance date, then the
prepayment premium shall be 125% of the face amount plus any accrued interest; and (vi) if the First GSC Note is prepaid during
the period beginning on the date which is one hundred fifty-one (151) days following the issuance date, and ending on the date
which is one hundred eighty (180) days following the issuance date, then the prepayment premium shall be 130% of the face amount
plus any accrued interest; Such prepayment redemptions must be closed and funded within three days of giving notice of redemption
or the right to redeem shall be null and void.
The Company shall reserve
211,267,000 of its authorized and unissued common stock (the “GSC Reserved Amount”), free from preemptive rights, to
provide for the issuance of Common Stock upon the full conversion of the First GSC Note. Upon full conversion of the First GSC
Note, any shares remaining in such reserve shall be cancelled. The Company shall at all times reserve a minimum of four (4) times
the number of shares required if all outstanding principal under the First GSC Note would be fully converted and will from time
to time increases the GSC Reserved Amount in accordance with the Company’s obligations under the First GSC Note.
Pursuant to the terms
of the GSC Purchase Agreement, for so long as GSC owns any shares of common stock issued upon conversion of the Geneva Note (the
“GSC Conversion Shares”), the Company covenants to secure and maintain the listing of such shares of common stock.
The Company is also subject to certain customary negative covenants under the GSC Notes and the GSC Purchase Agreement, including
but not limited to the requirement to maintain its corporate existence and assets, subject to certain exceptions, and not to make
any offers or sales of any security under circumstances that would require registration of or stockholder approval for the GSC
Notes or the GSC Conversion Shares.
The terms and conditions
of the Second GSC are substantially the same as the First GSC Note, with the following exceptions. The Second GSC Note is not convertible
until it is funded in cash on or before November 4, 2018. Once the Second GSC Note is funded in cash, GSC is entitled, at its option,
at any time thereafter, to convert all or any amount of the outstanding principal face amount of the Second GSC Note into shares
of the Company’s common stock.
The Notes are long-term
debt obligations that are material to the Company. The Notes contain certain representations, warranties, covenants and events
of default including if the Company is delinquent in its periodic report filings with the Securities and Exchange Commission and
increases in the amount of the principal and interest rates under the Notes in the event of such defaults. In the event of default,
at the option of the Investors and in the Investors’ sole discretion, the Investors may consider the Notes immediately due
and payable.
Any shares to be issued
pursuant to any conversion of the First GSC Note and the Second GSC Note shall be issued pursuant to an exemption from the registration
requirement of the Securities Act of 1933, provided in Section 4(a)(2) of the Securities Act.
The Company intends
to use the proceeds from the Notes for general working capital purposes.
The foregoing descriptions
of the Geneva Purchase Agreement, the GSC Purchase Agreement and the Notes do not purport to be complete and are qualified in their
entirety by reference to the Geneva Purchase Agreement, the GSC Purchase Agreement and the Notes, copies of which are filed as,
respectively, Exhibits 10.1, 10.2, 4.1, and 4.2. hereto.