Item
1.01 Entry into a Material Agreement
Exchange
Notes
On
October 18, 2019 (the “Exchange Date”), The Greater Cannabis Company, Inc. (the “Company”) entered into
a note exchange agreement with Emet Capital Partners LLC (“Emet”) pursuant to which Emet exchanged the following notes:
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1.
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A
note dated May 25, 2017 in the original principal amount of $55,000.00, of which $2,798.70 remained outstanding and $330.09
of interest accrued as of 10/18/19 (“ON1”);
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2.
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An
allonge to the September 14, 2018 Note dated March 28, 2018, in the original principal amount of $12,100.00, of which $12,100.00
remained outstanding and $3.339.93 of interest and default damages accrued as of 10/18/19 (“ON2”); and
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3.
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An
allonge to the September 14, 2018 Note dated June 13, 2018, in the original principal amount of $5,500.00, of which $5,500.00
remained outstanding and $1.518.93 of interest and default damages accrued as of 10/18/19 (“ON3”)
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for
the following new notes: one for $3,128.79 (“NN1”),
one for $15,439.93 (“NN2”), and one for $7,018.15 (“NN3”). NN1 is being exchanged for ON1, NN2 is being
exchanged for ON2, and NN3 is being exchanged for ON3. NN1, NN2 and NN3 are collectively referred to as the “Exchange Notes”.
Emet
has the right beginning on the date which is one hundred eighty (180) days following the Exchange Date to convert all or any part
of the outstanding and unpaid principal amount of the Exchange Notes into fully paid and non-assessable shares of common stock
of the Company at a conversion price equal to 65% of the lowest closing price of the Company’s common stock as reported
on the National Quotations Bureau OTC Market exchange which the Company’s shares are traded or any exchange upon which the
Company’s common stock may be traded in the future for the fifteen prior trading days including the day upon which a notice
of conversion is received by the Company.
Interest
on any unpaid principal balance of this Note shall be paid at the rate of 6% per annum. Interest shall be paid by the Company
in Common Stock.
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(b)
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The
Notes may be prepaid or assigned with the following penalties/premiums:
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PREPAY
DATE
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PREPAY
AMOUNT
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≤
30 days
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105%
* (P+I)
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31-
60 days
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110%
* (P+I)
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61-90
days
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115%
* (P+I)
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91-120
days
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120%
* (P+I)
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121-150
days
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125%
* (P+I)
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151-180
days
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130%
* (P+I)
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This
Note may not be prepaid after the 180th day.
In
the case of an Event of Default (as defined in the Exchange Notes), the Exchange Notes shall become immediately due and payable
and interest shall accrue at the rate of Default Interest (as defined in the Exchange Notes). Certain
events of default will result in further penalties.
Each
of the Exchange Notes are attached in full to this report as Exhibits 10.1, 10.2 and 10.3.
Warrant
Notes and Cancellation of Series B Preferred Shares
On
the Exchange Date, the Company entered into a warrant exchange agreement (the “Warrant Exchange Agreement”) with Emet
pursuant to which the Company and Emet agreed to (i) reverse the transactions that were consummated by the
previously executed exchange agreement dated February 14, 2019 (the “February Exchange”) pursuant to which certain
warrants then held by Emet were exchanged for 9,000,000 shares of Series B Convertible Preferred Stock (the “Series B Preferred
Shares”) and (ii) cancel the Series B Preferred Shares, which results in the following warrants being outstanding:
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1.
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A
warrant to initially purchase 440,000 shares dated May 25, 2017 (“W1”);
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2.
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A
warrant to initially purchase 110,000 shares dated October 14, 2017 (“W2”);
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3.
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A
warrant to initially purchase 96,800 shares dated March 28, 2018 (“W3”); and
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4.
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A
warrant to initially purchase 11,000 shares dated June 13, 2018 (“W4”)
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and
(iii) exchange W1, W2, W3 and W4 for the following notes: one
for $451,504.95 (“WN1”), one for $112,876.28 (“WN2”), one for $99,331.13 (“WN3”), one for
$11,287.65 (“WN4”). WN1 is being exchanged for W1, WN2 is being exchanged for W2, WN3 is being exchanged for W3, and
WN4 is being exchanged for W4. WN1, WN2, WN3 and WN4 are collectively referred to as the “Warrant Notes”.
Emet
has the right beginning on the Exchange Date to convert all or any part of the outstanding and unpaid principal amount of the
Warrant Notes into fully paid and non-assessable shares of common stock of the Company at a conversion price equal to 65% of the
lowest closing price of the Company’s common stock as reported on the National Quotations Bureau OTC Market exchange which
the Company’s shares are traded or any exchange upon which the Company’s common stock may be traded in the future
for the fifteen prior trading days including the day upon which a notice of conversion is received by the Company.
Interest
on any unpaid principal balance of this Note shall be paid at the rate of 2% per annum.
In
the case of an Event of Default (as defined in the Exchange Notes), the Exchange Notes shall become immediately due and payable
and interest shall accrue at the rate of Default Interest (as defined in the Exchange Notes). Certain
events of default will result in further penalties.
Transfer
Agent Letter
On
the Exchange Date, the Company issued and delivered a letter to its transfer agent pursuant to which it agreed to create a reserve
of 175,000,000 shares of common stock for the benefit of Emet.