Item
1.01 Entry into a Material Definitive Agreement.
Geneva
Roth Convertible Note Transaction
On
September 14, 2020, American International Holdings Corp. (the “Company”, “we” or “us”)
entered into a Securities Purchase Agreement with Geneva Roth Remark Holdings, Inc., an accredited investor (“Geneva
Roth”), pursuant to which the Company sold Geneva Roth a convertible promissory note in the principal amount of $53,000
(the “Geneva Roth Note”). The Geneva Roth Note accrues interest at a rate of 8% per annum (22% upon the occurrence
of an event of default) and has a maturity date of December 14, 2021.
The
Company has the right to prepay the Geneva Roth Note at any time during the first six months the note is outstanding at the rate
of (a) 120% of the unpaid principal amount of the note plus interest, during the first 90 days the note is outstanding, (b) 125%
of the unpaid principal amount of the note plus interest between days 91 and 120 after the issuance date of the note, (c) 130%
of the unpaid principal amount of the note plus interest between days 121 and 150 after the issuance date of the note, and (d)
134% of the unpaid principal amount of the note plus interest between days 151 and 180 after the issuance date of the note. The
Geneva Roth Note may not be prepaid after the 180th day following the issuance date, unless Geneva Roth agrees to such
repayment and such terms.
Geneva
Roth may in its option, at any time beginning 180 days after the date of the note, convert the outstanding principal and interest
on the Geneva Roth Note into shares of our common stock at a conversion price per share equal to 61% of the average of the two
lowest daily volume weighted average prices (“VWAPs”) of our common stock during the 10 days trading days prior
to the date of conversion. We agreed to reserve a number of shares of our common stock which may be issuable upon conversion of
the Geneva Roth Note at all times (initially 1,820,680 shares).
The
Geneva Roth Note provides for standard and customary events of default such as failing to timely make payments under the Geneva
Roth Note when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting
requirements and the failure to maintain a listing on the OTC Markets. The Geneva Roth Note also contains customary positive and
negative covenants. The Geneva Roth Note includes penalties and damages payable to Geneva Roth in the event we do not comply with
the terms of such note, including in the event we do not issue shares of common stock to Geneva Roth upon conversion of the note
within the time periods set forth therein. Additionally, upon the occurrence of certain defaults, as described in the Geneva Roth
Note, we are required to pay Geneva Roth liquidated damages in addition to the amount owed under the Geneva Roth Note (including
in some cases up to 300% of the amount of the note and in other cases the value of the shares which Geneva Roth could have been
issued upon the full conversion of the note after including default fees equal to 150% of the amount of such note).
The
Geneva Roth Note includes a most favored nations provision which allows Geneva Roth the right to modify the Geneva Roth Note to
provide for any more favorable terms offered in any future financing transaction, subject to certain limited exceptions.
At
no time may the Geneva Roth Note be converted into shares of our common stock if such conversion would result in Geneva Roth and
its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock.
We
hope to repay the Geneva Roth Note prior to any conversion. In the event that the Geneva Roth Note is not repaid in cash in its
entirety, Company shareholders may suffer significant dilution if, and to the extent that, the balance of the Geneva Roth Note
is converted into common stock.
The
description of the Geneva Roth Note and Securities Purchase Agreement above is not complete and is qualified in its entirety by
the full text of the Geneva Roth Note and Securities Purchase Agreement, filed herewith as Exhibits 10.2 and 10.1,
respectively, which are incorporated by reference in this Item 1.01.