Item 1.01. Entry into a Material
Definitive Agreement.
February 2022 Private Placement
On February 28, 2022, Nanomix
Corporation (the “Company”) entered into a securities purchase agreement with accredited investors (the “Investors”)
pursuant to which the Company issued senior secured convertible notes in an principal amount of approximately $666,667 for an aggregate
purchase price of $600,000 (collectively, the “Notes”). Garrett Gruener, a director of the Company, purchased a Note in an
aggregate principal amount of $444,444 for an aggregate purchase price of $400,000.
The Notes each have a term
of twenty-four months and mature on February 28, 2024, unless earlier converted or extended under certain conditions as set forth in the
Note (the “Maturity Date”). On the Maturity Date, the Company shall pay to the Investors an amount in cash representing 115%
of all outstanding principal amount and any other amounts which may be due under the Notes. Upon an Event of Default (as defined in the
Notes), the Notes accrue interest at a rate of 14% per annum.
The Notes are convertible
at any time, subject to an increase in the authorized capital of the Company or consummation of the Company’s previously announced
reverse stock split, at the holder’s option, into shares of our common stock equal to $0.0119, subject to adjustment (the “Conversion
Price”). Notwithstanding the foregoing, at any time during the continuance of any Event
of Default, the Conversion Price in effect shall, at the option of the Holder, be equal to the lowest of (i) the applicable Conversion
Price as in effect on the applicable conversion date, (ii) 75% of the VWAP of the common stock as of the trading day immediately preceding
the delivery or deemed delivery of the applicable conversion, (iii) 75% of the VWAP of the common stock as of the trading day of the delivery
or deemed delivery of the applicable conversion and (iv) 75% of the price computed as the quotient of (I) the sum of the VWAP of the common
stock for each of the three (3) trading days with the lowest VWAP of the Common Stock during the twenty (20) consecutive trading day period
ending and including the trading day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, divided
by (II) three (3) (collectively, the “Alternative Conversion Price”). The Conversion Price is also subject to adjustment due
to certain events, including stock dividends, stock splits and in connection with the issuance by the Company of common stock or common
stock equivalents at an effective price per share lower than the conversion price then in effect.
At any time from and after
May 1, 2022, the Investors shall have the right, in its sole discretion, to require that the Company redeem all, or any portion, of the
Note by delivering written notice thereof to the Company. The portion of this Note subject to redemption shall be redeemed by the Company
in cash at a price equal to 115% of the amount of the Note to be redeemed. At any time after July 25, 2022, subject to certain equity
conditions, if at any time (x) the closing sale price of the Company’s common stock exceeds $0.0238 (as adjusted for stock splits,
stock dividends, recapitalizations and similar events) for thirty (30) consecutive trading days, the Company shall have the right to redeem
all, but not less than all without the prior written consent of the Investors, of the amount remaining under the Notes in cash at a price
equal to 115% of the amount to be redeemed.
Each Warrant is exercisable
for a period of five years from the date of issuance at an initial exercise price to $0.0119, subject to adjustment.
The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and in connection
with the issuance by the Company of common stock or common stock equivalents at an effective price per share lower than the conversion
price then in effect.
Each of the Investors have
contractually agreed to restrict their ability to convert the Notes and/or exercise the Warrants and such that the number of shares of
the Company common stock held by each of them and their affiliates after such conversion or exercise does not exceed 9.99% of the Company’s
then issued and outstanding shares of common stock.
The full principal amount
of the Notes are due upon a default under the terms of the Notes. The Notes are senior to all current and future indebtedness of the Company
and are secured by substantially all of the assets of the Company and its subsidiaries. The Company’s obligations under the Notes
are guaranteed by the Company’s subsidiaries. The rights of the security interests and guaranties granted by the Company are governed
by the security agreement and guaranty entered into by the Company in connection with the June 2021 private placement.
In addition, the securities
purchase agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among
others, restrictions on the Company’s ability to dispose of property, enter into mergers, acquisitions or other business combination
transactions, incur additional indebtedness, grant liens, pay dividends and make certain other restricted payments. The representations,
warranties and covenants contained in the securities purchase agreement were made solely for the benefit of the parties to the securities
purchase agreement and their permitted successors and assignees. In addition, such representations, warranties and covenants (i) are
intended not as statements of fact, but rather as a way of allocating the risk between the parties to the securities purchase agreement,
(ii) have been qualified by reference to confidential disclosures made by the parties in connection with the securities purchase
agreement and (iii) may apply standards of materiality in a way that is different from what may be viewed as material by shareholders
of, or other investors in, the Company. Accordingly, the securities purchase agreement is included with this filing only to provide investors
with information regarding the terms of the transactions contemplated thereby, and not to provide investors with any other factual information
regarding the Company. Shareholders should not rely on the representations, warranties and covenants contained in the securities purchase
agreement or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries
or affiliates. Moreover, information concerning the subject matter of the representations and warranties contained in the securities purchase
agreement may change after the date of the securities purchase agreement, which subsequent information may or may not be fully reflected
in public disclosures.
As of the date hereof, the
Company is obligated on approximately $666,667 face amount of Notes issued to the Investors. The Notes are a debt obligation arising other
than in the ordinary course of business which constitute a direct financial obligation of the Company.
The Notes and Warrants were
not registered under the Securities Act or the securities laws of any state, and were offered and sold in reliance on the exemption from
registration afforded by Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”) and Regulation
D promulgated thereunder and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any
public offering. The investors in such securities are each an “accredited investor” as such term is defined in Regulation
D promulgated under the Securities Act. This Current Report shall not constitute an offer to sell or the solicitation of an offer to buy,
nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration
requirements and certificates evidencing such shares contain a legend stating the same.
The foregoing description
of the agreements described above does not purport to be a complete description of the rights and obligations of the parties thereunder
and is qualified in its entirety by reference to the full text of such agreements, copies of which are attached hereto as Exhibits 4.1,
4.2 and 10.1 below.
Consent, Amendment and Waiver with June 2021
Investors
On February 24, 2022, the
Company entered into a consent, amendment and waiver (the “Consent”) with the required holders (the “Required Holders”)
under the Securities Purchase Agreement dated June 25, 2021 (the “June 2021 Purchase Agreement”). The Consent became effective
on February 28, 2022. Pursuant to the Consent, the Required Holders agreed to the following (i) amend the June 2021 Purchase Agreement
to allow for the additional closing of the Notes and Warrants, (ii) waive the right of participation with respect to the issuance of the
Notes and Warrants (iii) extend the deadline for covenant that the Company complete the Reverse Split within 120 calendar days from the
Closing Date to May 3, 2022, (iv) extend the deadline for the covenant that the Company shall obtain an emergency use authorization from
the Food and Drug Administration with respect to The Nanomix eLab® system for eLab COVID 19 rapid antigen test from December 25, 2021
to June 30, 2022 and (v) waives any Registration Delay Payments (as defined in the Registration Rights Agreement) that have accrued and
otherwise would be payable to any Investor in the June 2021 private placement from October 14, 2021 through March 31, 2022 (together with
any additional later charges in connection therewith).
The foregoing description
of the agreement described above does not purport to be a complete description of the rights and obligations of the parties thereunder
and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Exhibit 10.2 below.