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Item
1.01
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Entry
into a Material Definitive Agreement.
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Power
Up Financing
On
May 14, 2019, NanoFlex Power Corporation, a Florida corporation (the “Company) entered into a Securities Purchase Agreement
(the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up agreed to
purchase a convertible promissory note (the “Power Up Note”) in the aggregate principal amount of $118,000. On May
14, 2019, the Company issued the Power Up Note. The Power Up Note entitles the holder to 12% interest per annum and matures on
March 15, 2020.
Under
the Power Up Note, Power Up may convert all or a portion of the outstanding principal of the Power Up Note into shares of common
stock, $0.0001 par value per share (the “Common Stock”) of the Company beginning on the date which is 180 days from
the issuance date of the Power Up Note, at a price equal to 61% of the average of the lowest two trading prices during the 15
trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up
may not convert the Power Up Note to the extent that such conversion would result in beneficial ownership by Power Up and its
affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.
If
the Company prepays the Power Up Note within 30 days of its issuance, the Company must pay all of the principal at a cash redemption
premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note, then
such redemption premium is 115%; if such prepayment is made from the 61st to the 90th day after issuance, then such redemption
premium is 120%; and if such prepayment is made from the 91st to the 180th day after issuance, then such redemption premium is
125%. After the 180th day following the issuance of the Power Up Note, there shall be no further right of prepayment.
At
all time, the Company must have reserved the amount of shares of Common Stock equal to at least 800% the number of shares of Common
Stock issuable upon conversion of the Power Up Note. The closing occurred on May 17, 2019, and the Company received a net amount
of $118,000.
APG
Capital Financing
On
May 15, 2019, the Company entered into a Securities Purchase Agreement (the “APG SPA”) with APG Capital Holdings LLC
(“APG”) pursuant to which APG agreed to purchase a convertible, redeemable promissory note (the “APG Note”)
in the aggregate principal amount of $69,300. On May 15, 2019, the Company issued the APG Note. The APG Note entitles the holder
to 12% interest per annum and matures on May 15, 2020.
Under
the APG Note, during the first six months after issuance, APG may convert all or a portion of the outstanding principal of the
APG Note into shares of Common Stock at a fixed price equal to $0.25 per share. Thereafter, the conversion price per share shall
be equal to 60% of the lowest trading price during the 20 prior trading days (including the day upon which a notice of conversion
is received), provided, however, that if the Company experiences a DTC “Chill” on its shares of Common Stock, the
conversion price shall be reduced to 50% while such DTC “Chill” remains in effect. APG may not convert the APG Note
to the extent that such conversion would result in beneficial ownership by APG and its affiliates of more than 9.9% of the Company’s
issued and outstanding Common Stock.
If
the Company prepays the APG Note within 90 days of its issuance, the Company must pay all of the principal at a cash redemption
premium of 135%; if such prepayment is made between the 91st day and the 180th day after the issuance of the APG Note, then such
redemption premium is 150%. After the 180th day following the issuance of the APG Note, there shall be no further right of prepayment.
In
the event all or substantially all of the assets or equity of the Company is acquired by a third party, APG may elect to either
(i) have the APG Note redeemed by the Company in cash at a premium of 150% of the principal amount of the APG Note, plus accrued
but unpaid interest or (ii) convert the APG Note into shares of Common Stock of the Company at the applicable conversion price.
In
connection with the APG Note, the Company agreed to cause its transfer agent to reserve 8,000,000 shares of Common Stock, in the
event that the APG Note is converted. APG has the right to periodically request that the number of shares reserved be increased
to at least 400% of the number of shares of Common Stock issuable upon conversion of the APG Note. The closing occurred on May
15, 2019, and the Company received a net amount of $63,000.
EMA
Financial Financing
On
May 17, 2019, the Company entered into a Securities Purchase Agreement (the “EMA SPA”) with EMA Financial, LLC (“EMA”)
pursuant to which EMA agreed to purchase a convertible promissory note (the “EMA Note”) in the aggregate principal
amount of $61,000. On May 17, 2019, the Company issued the EMA Note. The EMA Note entitles the holder to 10% interest per annum
and matures on February 17, 2020.
Pursuant
to the EMA Note, at any time, EMA may convert all or a portion of the outstanding principal of the EMA Note into shares of Common
Stock of the Company at a price equal to the lower of the lowest closing bid price during the 20 trading day period ending on
the last complete trading date prior to the date of conversion and 60% of the lowest trading price during the prior consecutive
20 trading day period. EMA may not convert the EMA Note to the extent that such conversion would result in beneficial ownership
by EMA and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.
If
the Company prepays the EMA Note within 90 days of its issuance, the Company must pay all of the principal at a cash
redemption premium of 135%; if such prepayment is made between the 91st day and the 180th day after the issuance of the EMA
Note, then such redemption premium is 150%. After the 180th day following the issuance of the EMA Note, there shall be no
further right of prepayment.
At
all time, the Company must have reserved the amount of shares of Common Stock equal to at least 700% the number of shares of Common
Stock issuable upon conversion of the EMA Note. The closing occurred on May 17, 2019, and the Company received a net amount of
$58,000.
Odyssey
Capital Financing
On
June 19, 2019, the Company entered into a Securities Purchase Agreement (the “Odyssey SPA”) with Odyssey Capital Funding
LLC (“Odyssey”) pursuant to which Odyssey agreed to purchase a convertible redeemable note (the “Odyssey Note”)
in the aggregate principal amount of $100,000. On June 19, 2019, the Company issued the Odyssey Note. The Odyssey Note entitles
the holder to 12% interest per annum and matures on June 19, 2020.
Pursuant
to the Odyssey Note, during the first six months after issuance, Odyssey may convert all or a portion of the outstanding principal
of the Odyssey Note into shares of Common Stock of the Company at a fixed price equal to $0.25 per share. Thereafter, the conversion
price per share shall be equal to 60% of the lowest trading price during the 20 prior trading days (including the day upon which
a notice of conversion is received), provided, however, that if the Company experiences a DTC “Chill” on its shares
of Common Stock, the conversion price shall be reduced to 50% while such DTC “Chill” remains in effect. Odyssey may
not convert the Odyssey Note to the extent that such conversion would result in beneficial ownership by Odyssey and its affiliates
of more than 4.99% of the Company’s issued and outstanding Common Stock.
If
the Company prepays the Odyssey Note within 60 days of its issuance, the Company must pay all of the principal at a cash redemption
premium of 120%; if such prepayment is made between the 61st day and the 120th day after the issuance of the Odyssey Note, then
such redemption premium is 130%; if such prepayment is made from the 121st to the 180th day after issuance, then such redemption
premium is 140%. After the 180th day following the issuance of the Odyssey Note, there shall be no further right of prepayment.
In
the event all or substantially all of the assets or equity of the Company is acquired by a third party, Odyssey may elect to either
(i) have the Odyssey Note redeemed by the Company in cash at a premium of 150% of the principal amount of the Odyssey Note, plus
accrued but unpaid interest or (ii) convert the Odyssey Note into shares of Common Stock of the Company at the applicable conversion
price.
In
connection with the Odyssey Note, the Company agreed to cause its transfer agent to reserve 10,928,000 shares of Common Stock,
in the event that the Odyssey Note is converted. Odyssey has the right to periodically request that the number of shares reserved
be increased to at least 400% the number of shares of Common Stock issuable upon conversion of the Odyssey Note. The closing occurred
on June 19, 2019, and the Company received a net amount of $95,000.
The
foregoing summaries of the terms of the Power Up Note, the APG Note, the EMA Note, the Odyssey Note, the Power Up SPA, the APG
SPA, the EMA SPA and the Odyssey SPA are subject to, and qualified in their entirety by, the agreements and instruments attached
hereto as Exhibits 4.1, 4.2, 4.3, 4.4, 10.1, 10.2, 10.3 and 10.4, respectively, which are incorporated by reference herein.