Item 1.01 Entry into a Material Definitive Agreement
Effective February 10, 2022, AXIM Biotechnologies, Inc. (the “Company”) issued the following debt obligations in exchange for cash. A portion of the funds received by the Company were used to pay off the GS Capital Partners, LLC note described in Item 1.02.
Short Term Promissory Notes
Effective February 10, 2022, the Company issued two short term notes, each having a face amount of $250,000, in exchange for a total of $500,000 in cash (the "Short Term Promissory Notes"). The Short Term Promissory Notes bear interest at the rate of 1.5% per annum and are due and payable on or before March 10, 2022, unless demand for payment is made prior to such date. One of the two notes was paid in full on February 14, 2022.
Convertible Notes
Effective February 10, 2022, the Company issued seven (7) convertible notes to a series of investors having an aggregate face value of $1,325,000 in exchange for $1,325,000 in cash (the "Convertible Notes"). One of the Convertible Notes, face value $25,000, was acquired by Blake N. Schroeder who is a director of the Company.
Each of the Convertible Notes is (i) unsecured; (ii) bears interest at a rate of 3% per annum; (iii) matures on February 10, 2032; and (iv) is convertible, in whole or in part, at any time by the holder, into restricted shares of the Company's common stock at a conversion price equal to the lesser of $0.08125 or 70% of the average of the two (2) lowest closing prices of the Company’s common stock in the ten (10) trading days preceding any particular conversion, provided, the holder is prohibited from converting the convertible note, or portion thereof, if such conversion would result in beneficial ownership by the holder and its affiliates of more than 4.9% of Company’s issued and outstanding common stock as of the date of the conversion.
The foregoing summaries of the Short Term Promissory Notes and Convertible Notes does not purport to be complete and is subject to, and qualified in its entirety, by reference to the form of Short Term Promissory Notes and Convertible Notes attached hereto as Exhibits 10.1 and 10.2 respectively, which are incorporated herein by reference.
Item 1.02 Termination of Material Definitive Agreement
GS Capital Partners, LLC Note
On February 10, 2022, the Company paid in full the remaining balance due on that certain convertible note issued to GS Capital Partners, LLC, face value $1,110,000, as amended (the "GS Note"). In connection with the repayment, the Company was required to pay accrued interest in the amount of $21,875.89, by issuing 173,390 restricted shares of the Company’s common stock pursuant to the formula set forth in the GS Note.
The foregoing summary of the GS Note, as amended, does not purport to be complete and is subject to, and qualified in its entirety, by reference to the GS Note attached hereto as Exhibit 10.3, which is incorporated herein by reference.