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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
Amendment
No. 3
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): August 18, 2022
HEALTHIER
CHOICES MANAGEMENT CORP.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
001-36469 |
|
84-1070932 |
| (State
or Other Jurisdiction |
|
(Commission |
|
(I.R.S.
Employer |
| of
Incorporation) |
|
File
Number) |
|
Identification
No.) |
3800
North 28th Way
Hollywood,
Florida 33020
(Address
of Principal Executive Office) (Zip Code)
(888)
766-5351
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
| ☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Title of each class |
|
Trading symbol(s) |
|
Name of each exchange on which registered |
| Common Stock, par value $0.0001 per share |
|
HCMC |
|
OTC Pink Marketplace |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory
Note
This
Amendment No. 3 on Form 8-K/A to the Form 8-K filed on August 23, 2022, is being filed for the purpose of filing Exhibit 10.1 and describing
the Third Amendment to the Securities Purchase Agreement.
ITEM
1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
August 18, 2022, Healthier Choices Management Corp. (the “Company” or “HCMC”) entered into a Securities Purchase
Agreement (the “SPA”), pursuant to which the Company sold and issued 14,722.075 shares of its Series E Redeemable Convertible
Preferred Stock (the “Preferred Stock”) to five institutional investors (the “Purchasers”) for an aggregate subscription
price of $13,250,000 (the “Offering”).
On
March 2, 2023, the parties to the SPA entered into First Amendment to Securities Purchase Agreement, pursuant to which the Company agreed
to pay each Purchaser ten percent (10%) of the Stated Value (the “Conversion Payment”) of the Preferred Stock upon conversion
of such Preferred Stock into common stock prior to the record date for the Spin Off.
On
May 15th, the parties to the SPA entered into Second Amendment to the Securities Purchase Agreement, pursuant to which the
Company and such parties agreed to: (1) extend the time period for the Conversion Payment eligibility to December 1, 2023, (2) amend
the Certificate of Designation as set forth in Item 5.03 below and (3) require the Purchasers to purchase Series A Convertible Preferred
Stock of a newly created public company (resulting from spin off of HCMC’s grocery and wellness businesses) in the same subscription
amounts that the Purchasers paid for the HCMC Preferred Stock (the “Spinoff”) only if the Spinoff is completed prior to December
1, 2023 (“Completion Date”).
On
October 30, 2022, the parties to the SPA entered into Third Amendment to the Securities Purchase Agreement, pursuant to which the Company
and such parties agreed to: (1) set the initial conversion price for the Series A Preferred Stock to be the 5-day volume weighted average
price measured using the 5 trading days preceding the purchase of the Series A Preferred Stock, (2) on the 40th calendar day (the “Reset
Date”) after the sale of the Series A Preferred Stock, reset the conversion price in the event the closing price of the Class A
common stock on such date is less than the initial conversion, (3) have the reset conversion price equal a 10% discount to the 5-day
volume weighted average price measured using the 5 trading days preceding the Reset Date; provided, however, in no instance will the
conversion price be reset below 30% of the initial conversion price, and (4) amend the Completion Date to March 1, 2024.
As
of October 27, 2023, 1,585 shares of Preferred Stock have been converted and 11,193 shares of Preferred Stock have been redeemed for
total redemption payments of $11,170,428..
The
foregoing description of the Third Amendment to Securities Purchase Agreement is a summary and is qualified in its entirety by reference
to the provisions thereof, a copy of which is attached to this Current Report as Exhibit 10.1, which is incorporated by reference herein.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
| |
Healthier
Choices Management Corp. |
| |
|
|
| Date:
November 3, 2023 |
By: |
/s/
Jeffrey E. Holman |
| |
|
Jeffrey
E. Holman |
| |
|
Chief
Executive Officer |
Exhibit
10.1
THIRD
AMENDMENT TO SECURITIES PURCHASE AGREEMENT
This
Third Amendment to that certain Securities Purchase Agreement (this “Agreement”) is dated as of October 30, 2023,
between Healthier Choices Management Corp., a Delaware corporation (the “Company”), and each purchaser identified
on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).
Capitalized terms not otherwise defined in this Agreement shall have the respective meanings ascribed to them in the SPA (as defined
below).
WHEREAS,
the parties entered into a Securities Purchase Agreement (“SPA”), dated as of August 18, 2022, and amended (the “Amendment”)
on March 1, 2023 and May 15, 2023, the Purchasers and the Seller; and
WHEREAS,
the parties have decided to amend the SPA as set forth below to add certain provision.
NOW,
THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained,
and intending to be legally bound hereby, the parties hereto agree as follows:
Article
I
AMENDMENTS
1.1 Spin-Off
Financing. The first sentence of Section 4.14 of the SPA shall be revised to replace with “December 1, 2023 to March 1, 2024.”
1.2 Amendment
and Restatement of Series A Certificate of Designation. The Series A Certificate of Designation, which is Exhibit A to the SPA, shall
be amended and restated as set forth in Exhibit A hereto,
1.3 No
Amendment. Nothing contained herein in any manner modifies or amends any other terms or provisions of the SPA all of which remain
in full force and effect unmodified.
Article
II
MISCELLANEOUS
2.1 Entire
Agreement. This Agreement and the SPA contains the entire understanding of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, either oral or written.
2.2 Amendment
and Waiver. This Agreement may be amended only by an instrument in writing signed by all of the signatories hereto.
2.3 Assignment.
This Agreement and the rights and obligations set forth herein shall inure to the benefit of, and be binding upon the parties hereto,
and each of their respective successors, heirs and permitted assigns.
2.4 Governing
Law; Venue; Waiver of Jury Trial. This Agreement shall be governed by the laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule that would cause application of the laws of any jurisdiction other than the State
of New York. Each of the parties to this Agreement irrevocably submits to the exclusive jurisdiction of the courts of the State of New
York for the purpose of any dispute arising out of or relating to this Agreement. Each of the
parties hereto waives any right to trial by jury with respect to any Action related to or arising out of this Agreement.
2.5 Construction.
Each party hereto acknowledges that it has been advised by legal and any other counsel retained by such party in its sole discretion.
Each party acknowledges that such party has had a full opportunity to review this Agreement and all related exhibits, schedules and ancillary
agreements and to negotiate any and all such documents in its sole discretion, without any undue influence by any other party hereto
or any third party. The parties have participated jointly in the negotiations and drafting of this Agreement and both shall be deemed
drafters. In the event of any ambiguity or question of intent or interpretation, no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
2.6 Counterparts.
This Agreement may be executed in two or more counterparts, any one of which need not contain the signatures of all parties, but all
of which counterparts when taken together will constitute one and the same agreement. Facsimile signatures (including in .pdf format)
shall constitute original signatures for all purposes of this Agreement.
[Remainder
of Page Intentionally Left Blank]
NOW,
THEREFORE, the parties hereto have executed this Third Amendment to Securities Purchase Agreement by their duly authorized representatives
as an instrument under seal as of the date first written above.
| Purchaser: |
|
Healthier Choices Management Corp. |
| |
|
|
|
|
| Sabby Volatility
Warrant master Fund, ltd. |
|
|
|
| |
|
|
|
| By: |
|
|
By: |
|
| Name: |
Robert Grundstein |
|
Name: |
Jeffrey E. Holman |
| Title: |
COO of Investment Manager |
|
Title: |
Chief Executive Officer |
EXHIBIT
A
HEALTHY
CHOICE WELLNESS CORP.
CERTIFICATE
OF DESIGNATION OF PREFERENCES,
RIGHTS
AND LIMITATIONS
OF
SERIES
A CONVERTIBLE PREFERRED STOCK
PURSUANT
TO SECTION 151 OF THE
delaware
GENERAL CORPORATION LAW
The
undersigned, [_____________________], do hereby certify that:
1. They
are the President and Secretary, respectively, of Healthy Choice Wellness Corp. (the “Corporation”).
2. The
Corporation is authorized to issue 40,000,000 shares of preferred stock, none of which have been previously issued.
3. The
following resolutions were duly adopted by the board of directors of the Corporation (the “Board of Directors”):
WHEREAS,
the certificate of incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, consisting
of 40,000,000 shares, $0.001 par value per share, issuable from time to time in one or more series;
WHEREAS,
the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of
redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series
and the designation thereof, of any of them; and
WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and
other matters relating to a series of the preferred stock, which shall consist of, except as otherwise set forth in the Purchase Agreement,
up to 13,250 shares of the preferred stock which the Corporation has the authority to issue, as follows:
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or
exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters
relating to such series of preferred stock as follows:
TERMS
OF PREFERRED STOCK
The
Corporation hereby creates and designates the following series of Preferred Stock: SERIES A CONVERTIBLE PREFERRED STOCK thirteen thousand
two hundred fifty (13,250) shares of the Corporation’s authorized Preferred Stock are hereby designated “Series A Convertible
Preferred Stock.”
Section
1. Definitions. For the purposes hereof, the following terms shall have the following meanings:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.
“Alternate
Consideration” shall have the meaning set forth in Section 7(d).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Buy-In”
shall have the meaning set forth in Section 6(c)(iv).
“Closing”
means the closing of the purchase and sale of the Preferred Stock pursuant to Section 2 of the Purchase Agreement.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto and all conditions precedent to (i) each Holder’s obligations have been satisfied or waived and (ii) the Corporation’s
obligations to deliver the Securities have been satisfied or waived.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the Corporation’s Class A common stock, par value $0.001 per share, and stock of any other class of securities
into which such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that
is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion
Amount” means the sum of the Stated Value at issue.
“Conversion
Date” shall have the meaning set forth in Section 6(a).
“Conversion
Price” shall have the meaning set forth in Section 6(b).
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance
with the terms hereof.
“Effective
Date” shall have the meaning set forth in the Purchase Agreement.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Fundamental
Transaction” shall have the meaning set forth in Section 7(e).
“GAAP”
means United States generally accepted accounting principles.
“Holder”
shall have the meaning given such term in Section 2.
“IPO
Date” means the date the Registration Statement on Form S-1 for the initial registration of the Common Stock is declared effective
by the Commission.
“Liquidation”
shall have the meaning set forth in Section 5.
“New
York Courts” shall have the meaning set forth in Section 8(d).
“Notice
of Conversion” shall have the meaning set forth in Section 6(a).
“Original
Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers
of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred
Stock.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preferred
Stock” shall have the meaning set forth in Section 2.
“Purchase
Agreement” means the Securities Purchase Agreement, dated on or about the Original Issue Date, among the Corporation and the
original Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“Reset
Date” shall be the fortieth (40th) day following the Original Issue Date.
“Reset
Price” means the lower of (i) 90% of the average of the VWAP determined on the Reset Date and (ii) if the Registration Statement
(as defined in the Purchase Agreement) is declared effective by the SEC after the Reset Date, 90% of the average of the VWAP during the
three (3) Trading Days immediately following the date the Registration Statement is declared effective by the Commission; provided, however,
in no instance will the Reset Price be less than thirty percent (30%) of the Conversion Price.
“Securities”
means the Preferred Stock and the Conversion Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Delivery Date” shall have the meaning set forth in Section 6(c).
“Stated
Value” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.
“Successor
Entity” shall have the meaning set forth in Section 7(e).
“Trading
Day” means a day on which the principal Trading Market is open for business.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX and The Pink Open Market (or any successors to any of the foregoing).
“Transaction
Documents” means this Certificate of Designation, the Purchase Agreement, all exhibits and schedules thereto and hereto and
any other documents or agreements executed in connection with the transactions contemplated pursuant to the Purchase Agreement.
“Transfer
Agent” means Equity Stock Transfer, the current transfer agent of the Corporation with a mailing address of 237 West 37th
Street, Suite 602, New York, NY 10018 and a facsimile number of 347.584.3644, and any successor transfer agent of the Corporation.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock on the Trading Market on which the Common
Stock is then listed or quoted as reported by Bloomberg L.P. for the three (3) Trading Days ending on the first Trading Day immediately
preceding the date of determination of the VWAP, (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of
the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed
or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d)
in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Corporation, the fees
and expenses of which shall be paid by the Corporation.
Section
2. Designation, Amount and Par Value. The series of preferred stock shall be designated as its Series A Convertible Preferred
Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 13,250 (which shall not be subject
to increase without the written consent of the holders of the majority of the outstanding shares of Preferred Stock (each, a “Holder”
and collectively, the “Holders”)). Each share of Preferred Stock shall have a par value of $0.001 per share and a
stated value equal to $1,000 (the “Stated Value”).
Section
3. Dividends. Except for stock dividends or distributions for which adjustments are to be made pursuant to Section 7, Holders
shall be entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock
basis, disregarding for such purpose any conversion limitations hereunder) to and in the same form as dividends actually paid on shares
of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares
of Preferred Stock. The Corporation shall not pay any dividends on the Common Stock unless the Corporation simultaneously complies with
this provision.
Section
4. Voting Rights.
(a) For
purposes of determining the presence of a quorum at any meeting of the stockholders of the Corporation at which the shares of Preferred
Stock are entitled to vote, the number of shares of Preferred Stock and votes represented by such shares of Preferred Stock shall be
counted on an as converted to Common Stock subject to the limitation on conversion set forth in Section 6(d).
(b) Each
share of Preferred Stock shall entitle the holder thereof to a number of votes equal to the number of Conversion Shares issuable upon
conversion thereof assuming the Preferred Stock were then convertible into Common Stock (subject to the limitations on conversion set
forth in Section 6(d)) and shall, except as required by law, vote together with the Common Stock and any other issued and outstanding
shares of preferred stock of the Corporation, as a single class. Notwithstanding the foregoing, in addition, as long as any shares of
Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding
shares of the Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter
or amend this Certificate of Designation, (b) increase the number of authorized shares of Preferred Stock, or (c) enter into any agreement
with respect to any of the foregoing.
Section
5. Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”),
the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to the Stated
Value, plus any accrued and unpaid dividends and any other amounts due and owing under this Certificate of Designation, for each share
of Preferred Stock before any distribution or payment shall be made to the holders of the Common Stock and if the assets of the Corporation
shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed
among the Holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were
paid in full. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated
therein, to each Holder.
Section
6. Conversion.
(a) Conversions
at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original
Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations set forth in Section
6(d)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. Holders shall effect conversions
by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”).
Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock
owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date
on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by facsimile such
Notice of Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in
a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder.
No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the
absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender
the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented
thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly
following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms
hereof shall be canceled and shall not be reissued.
(b) Conversion
Price. The per share conversion price for the Preferred Stock shall equal to the lesser of (i) the VWAP as determined on the Original
Issue Date, subject to adjustment hereunder and (ii) the Reset Price (the lower of clauses (i) and (ii), the “Conversion Price”).
(c) Mechanics
of Conversion
(i) Delivery
of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days
comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery Date”),
the Corporation shall deliver, or cause to be delivered, to the converting Holder (A) the number of Conversion Shares being acquired
upon the conversion of the Preferred Stock, which Conversion Shares shall be free of restrictive legends and trading restrictions, and
(B) a bank check in the amount of accrued and unpaid dividends, if any. The Corporation shall use its best efforts to deliver the Conversion
Shares required to be delivered by the Corporation under this Section 6 electronically through the Depository Trust Company or another
established clearing corporation performing similar functions. As used herein, “Standard Settlement Period” means
the standard settlement period, expressed in a number of Trading Days, on the Corporation’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of the Notice of Conversion.
(ii) Failure
to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed
by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any
time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Corporation shall promptly return
to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the Corporation
the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.
(iii) Obligation
Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion
of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder
to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such
Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other
person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection
with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the
Corporation of any such action that the Corporation may have against such Holder. In the event a Holder shall elect to convert any or
all of the Stated Value of its Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or any
one associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an
injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Preferred Stock of such Holder
shall have been sought and obtained, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of
the Stated Value of Preferred Stock which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence
of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If the
Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) by the Share Delivery Date applicable to
such conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $5,000 of Stated
Value of Preferred Stock being converted, $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Share
Delivery Date and increasing to $50 per Trading Day on the sixth Trading Day after the Share Delivery Date) for each Trading Day after
the Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s
right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and
such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.
(iv) Compensation
for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to the Holder,
if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the Share Delivery Date pursuant to
Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage firm to purchase (in an open market transaction
or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale
by such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery
Date (a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available
to or elected by such Holder) the amount, if any, by which (x) such Holder’s total purchase price (including any brokerage commissions)
for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was
entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such
purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered)
the shares of Preferred Stock equal to the number of shares of Preferred Stock submitted for conversion (in which case, such conversion
shall be deemed rescinded) or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation
had timely complied with its delivery requirements under Section 6(c)(i). For example, if a Holder purchases shares of Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Preferred Stock with respect
to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation
was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000.
The Holder shall provide the Corporation written notice indicating the amounts payable to such Holder in respect of the Buy-In and, upon
request of the Corporation, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Corporation’s failure to timely deliver the Conversion Shares upon conversion of the shares of Preferred
Stock as required pursuant to the terms hereof.
(v) Reservation
of Shares Issuable Upon Conversion. Until no shares of the Preferred Stock remain outstanding, the Corporation covenants that it
will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance
upon conversion of the Preferred Stock as herein provided, free from preemptive rights or any other actual contingent purchase rights
of Persons other than the Holder (and the other holders of the Preferred Stock), not less than such aggregate number of shares of the
Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the
adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred Stock. The Corporation covenants
that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.
(vi) Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred Stock.
As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall round
up to the next whole share. Notwithstanding anything to the contrary contained herein, but consistent with the provisions of this subsection
with respect to fractional Conversion Shares, nothing shall prevent any Holder from converting fractional shares of Preferred Stock.
(vii) Transfer
Taxes and Expenses. The issuance of Conversion Shares on conversion of this Preferred Stock shall be made without charge to any Holder
for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided
that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and
delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Preferred Stock and
the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation
that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion
and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for
same-day electronic delivery of the Conversion Shares.
(d) Beneficial
Ownership Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right
to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable
Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a group together with such
Holder or any of such Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess
of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by such Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable
upon conversion of the Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially owned
by such Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion
of any other securities of the Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein
(including, without limitation, the Preferred Stock) beneficially owned by such Holder or any of its Affiliates or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained
in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in relation to other securities owned
by such Holder together with any Affiliates and Attribution Parties) and of how many shares of Preferred Stock are convertible shall
be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s determination
of whether the shares of Preferred Stock may be converted (in relation to other securities owned by such Holder together with any Affiliates
and Attribution Parties) and how many shares of the Preferred Stock are convertible, in each case subject to the Beneficial Ownership
Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers
a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Corporation
shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on
the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Corporation’s most recent
periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Corporation or
(iii) a more recent written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request (which may be via email) of a Holder, the Corporation shall within one Trading Day confirm orally and
in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Preferred
Stock, by such Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common
Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the
issuance of any shares of Preferred Stock, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock issuable upon conversion of Preferred Stock held by the applicable Holder. A Holder, upon notice
to the Corporation, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 6(d) applicable to its Preferred
Stock provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon conversion of the Preferred Stock held by the Holder and
the provisions of this Section 6(d) shall continue to apply. Any such increase in the Beneficial Ownership Limitation will not be effective
until the 61st day after such notice is delivered to the Corporation and shall only apply to such Holder and no other Holder.
The Beneficial Ownership Limitation shall not be waived by the Corporation or the Holder. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make
changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph
shall apply to a successor holder of Preferred Stock.
Section
7. Certain Adjustments.
(a) Stock
Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock
Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of,
or payment of a dividend on, this Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv)
issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the Conversion
Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury
shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination or re-classification.
(b) Subsequent
Equity Sales. If, at any time while this Preferred Stock is outstanding, the Corporation or any Subsidiary, as applicable sells or
grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant
or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares
of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion
Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common
Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then simultaneously with
the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Price shall be reduced in accordance with
the following formula:
CP2
= CP1* [(A + B) ÷ (A + C)].
For
purposes of the foregoing formula, the following definitions shall apply:
(i) “CP2”
shall mean the Conversion Price in effect immediately after such Dilutive Issuance;
(ii) “CP1”
shall mean the Conversion Price in effect immediately prior to such Dilutive Issuance;
(iii) “A”
shall mean the number of shares of Common Stock outstanding immediately prior to such Dilutive Issuance (treating for this purpose as
outstanding all shares of Common Stock issuable upon exercise, conversion or exchange of Common Stock Equivalents (including the Preferred
Stock) outstanding immediately prior to such Dilutive Issuance);
(iv) “B”
shall mean the number of shares of Common Stock that would have been issued if such Common Stock issued in the Dilutive Issuance had
been issued at a price per share equal to CP1 (determined by dividing the aggregate consideration received by the Corporation
in respect of such issue by CP1); and
(v) “C”
shall mean the number of such shares of Common Stock issued in such Dilutive Issuance.
Notwithstanding
the foregoing, no adjustment will be made under this Section 7(b) in respect of an Exempt Issuance. The Corporation shall notify the
Holders in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this
Section 7(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other
pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Corporation
provides a Dilutive Issuance Notice pursuant to this Section 7(b), upon the occurrence of any Dilutive Issuance, the Holders are entitled
to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless
of whether a Holder accurately refers to the Base Conversion Price in the Notice of Conversion.
(c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or
sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of shares of Common Stock (the “Purchase Rights”), then the Holder of will be entitled to acquire, upon
the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held
the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Preferred Stock (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which
a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(d) Pro
Rata Distributions. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Preferred Stock, then, in each such case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Preferred Stock (without regard to any limitations on conversion hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)
and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).
(e) Fundamental
Transaction. If, at any time while this Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or
exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental
Transaction”), then, upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for
each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction
(without regard to any limitation in Section 6(d) on the conversion of this Preferred Stock), the number of shares of Common Stock of
the successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares
of Common Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard to any
limitation in Section 6(d) on the conversion of this Preferred Stock). For purposes of any such conversion, the determination of the
Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this
Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor
to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms
and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’
right to convert such preferred stock into Alternate Consideration. The Corporation shall cause any successor entity in a Fundamental
Transaction in which the Corporation is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Corporation under this Certificate of Designation and the other Transaction Documents in accordance with the provisions
of this Section 7(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Preferred Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Preferred Stock (without regard to
any limitations on the conversion of this Preferred Stock) prior to such Fundamental Transaction, and with a conversion price which applies
the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such
conversion price being for the purpose of protecting the economic value of this Preferred Stock immediately prior to the consummation
of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Certificate of Designation and the other Transaction Documents referring to the “Corporation”
shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations
of the Corporation under this Certificate of Designation and the other Transaction Documents with the same effect as if such Successor
Entity had been named as the Corporation herein.
(f) Calculations.
All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
(g) Notice
to the Holders.
(i) Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation shall
promptly deliver to each Holder by facsimile or email a notice setting forth the Conversion Price after such adjustment and setting forth
a brief statement of the facts requiring such adjustment.
(ii) Notice
to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer
of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered by facsimile or email to each Holder
at its last facsimile number or email address as it shall appear upon the stock books of the Corporation, at least twenty (20) calendar
days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are
to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided
hereunder constitutes, or contains, material, non-public information regarding the Corporation or any of the Subsidiaries, the Corporation
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the 20-day period commencing on the date of such
notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section
8. Miscellaneous.
(a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any
Notice of Conversion, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Corporation, at the address set forth above Attention: John Ollet, Chief Financial Officer facsimile
number 954.272.7773, e-mail address jollet@hcmc1.com, or such other facsimile number, e-mail address or address as the Corporation may
specify for such purposes by notice to the Holders delivered in accordance with this Section 8. Any and all notices or other communications
or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent
by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such
Holder appearing on the books of the Corporation, or if no such facsimile number, e-mail address or address appears on the books of the
Corporation, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or e-mail at the e-mail address set forth in this Section 8 prior to 5:30 p.m. (New
York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
(b) Absolute
Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation
of the Corporation, which is absolute and unconditional, to pay liquidated damages, and accrued dividends, as applicable, on the shares
of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
(c) Lost
or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed,
the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu
of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated,
lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership
hereof reasonably satisfactory to the Corporation.
(d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall
be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles
of conflict of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated
by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New
York Courts”). The Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New
York Courts are improper or inconvenient venue for such proceeding. The Corporation and each Holder hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. The
Corporation and each Holder hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated
hereby. If the Corporation or any Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designation,
then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other
costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
(e) Waiver.
Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be
construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation
or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate
of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter
to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by
the Corporation or a Holder must be in writing.
(f) Severability.
If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation
shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to
all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the
applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable law.
(g) Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day.
(h) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be
deemed to limit or affect any of the provisions hereof.
(i) Status
of Converted Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement. If any shares of Preferred
Stock shall be converted, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer
be designated as Series A Convertible Preferred Stock. The Corporation shall not redeem or reacquire any shares of Preferred Stock.
*********************
RESOLVED,
FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be
and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations
in accordance with the foregoing resolution and the provisions of Delaware law.
IN
WITNESS WHEREOF, the undersigned have executed this Certificate this _____ day of _______________, 2023.
| Healthy Choice Wellness Corp. |
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| Name: |
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Name: |
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Title: |
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ANNEX
A
NOTICE
OF CONVERSION
(To
be Executed by the Registered Holder in order to Convert Shares of Preferred Stock)
The
undersigned hereby elects to convert the number of shares of Series A Convertible Preferred Stock indicated below into shares of Class
A common stock, par value $0.001 per share (the “Common Stock”), of Healthy Choice Wellness Corp., a Delaware corporation
(the “Corporation”), according to the conditions hereof, as of the date written below. If shares of Common Stock are
to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto
and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with the Purchase Agreement.
No fee will be charged to the Holders for any conversion, except for any such transfer taxes.
Conversion
calculations:
Date
to Effect Conversion: _______________________________________________
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Number
of shares of Preferred Stock owned prior to Conversion: _______________
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Number
of shares of Preferred Stock to be Converted: ________________________
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Stated
Value of shares of Preferred Stock to be Converted: ____________________
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Number
of shares of Common Stock to be Issued: ___________________________
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Applicable
Conversion Price:____________________________________________
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Number
of shares of Preferred Stock subsequent to Conversion: ________________
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Address
for Delivery: ______________________
or
DWAC
Instructions:
Broker
no: _________
Account
no: ___________ |
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[HOLDER]
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By: |
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Name: |
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| |
Title: |
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v3.23.3
| X |
- DefinitionDescription of changes contained within amended document.
| Name: |
dei_AmendmentDescription |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:stringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
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| X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
| Name: |
dei_AmendmentFlag |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
| Name: |
dei_DocumentPeriodEndDate |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:dateItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
| Name: |
dei_DocumentType |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:submissionTypeItemType |
| Balance Type: |
na |
| Period Type: |
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| X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
| Name: |
dei_EntityAddressAddressLine1 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
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| X |
- Definition
+ References
+ Details
| Name: |
dei_EntityAddressCityOrTown |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
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| X |
- DefinitionCode for the postal or zip code
| Name: |
dei_EntityAddressPostalZipCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
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| X |
- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
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| Period Type: |
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| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
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| Namespace Prefix: |
dei_ |
| Data Type: |
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| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
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|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
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|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
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