Item 1.01 Entry into a Material
Definitive Agreement.
On March 23, 2022, Nanomix Corporation (the “Company”)
entered into a Securities Purchase Agreement (the “Purchase Agreement”) with GHS Investments, LLC (the “Purchaser”),
pursuant to which the Purchaser purchased five hundred (500) shares of the Company’s Series D Convertible Preferred Stock (“Series
D Preferred Stock”) for an aggregate purchase price of $500,000. In addition, in connection with the issuance of the Series D Preferred
Stock, the Purchaser received a five year warrant to purchase 60,000 shares of the Company’s common stock (the “Warrant”).
The Warrant is exercisable at an exercise price of $2.0587 per share of Common Stock, subject to certain beneficial ownership limitations (with
a maximum ownership limit of 9.99%) (the “Beneficial Ownership Limitations”). The exercise price is also subject to adjustment
due to certain events, including stock dividends, stock splits and fundamental transactions and in connection with the issuance by the
Company of our Common Stock or Common Stock equivalents at an effective price per share lower than the exercise price then in
effect. The holders may exercise the Warrants on a cashless basis if the shares of our Common Stock underlying the Warrants are not then
registered pursuant to an effective registration statement.
In addition, upon the terms and subject to the
conditions set forth in the Purchase Agreement, fifteen (15) calendar days following the effective date of a registration statement registering
the resale of the maximum aggregate number of (i) shares of Common Stock issuable pursuant to the conversion of the Preferred Stock and
(ii) Warrant Shares issuable upon exercise of the Warrants issuable pursuant to the Purchase Agreement (collectively, the “Registrable
Securities”), and on each of the 30th, 60th, 90th and 120th calendar day anniversaries
of the Effective Date, assuming no Event of Default (as defined in the Purchase Agreement) has taken or is taking place, the Company agrees
to sell, and the Purchaser agrees to purchase, an additional five hundred (500) shares of Preferred Stock at price of $1,000 per share
of Series D Preferred Stock. Concurrently with the issuance of any Series D Preferred Stock, the Company shall issue to Purchaser a warrant
to purchase up to a number of Warrant Shares equal to 30% of the quotient of (a) the Purchase Price due at the relevant closing) and the
Closing Price of the Company’s Common Stock for the Trading Day preceding such additional closing date.
In connection with the entry into the Purchase
Agreement, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock
(the “COD”) with the Delaware Secretary of State to create a new class of preferred stock designated Series D Preferred Stock
and authorized the issuance of up to ten thousand (10,000) shares of Series D Preferred Stock. The Series D Preferred Stock has a stated
value of $1,200 per share (“Stated Value”) and the holder of the Series D Preferred Stock has the right to receive a dividend
equal to eight percent (8%) per annum, payable quarterly, beginning on the issuance date of the Series D Preferred Stock and ending on
the date that the Series D Preferred Stock has been converted or redeemed. Dividends may be paid in cash or in shares of Series D Preferred
Stock at the discretion of the Company. At closing, the Company prepaid one year’s worth of interest in shares of Series D Preferred
Stock. The Series D Preferred Stock will vote together with the common stock on an as-converted basis subject to the Beneficial Ownership
Limitations Further, the holders of the Series D Preferred Stock have the right to receive assets in the event of liquidation, dissolution
or winding up before any distribution or payment shall be made to the holders of any securities junior to the Series D Preferred Stock.
The Company is required to reserve and keep available out of our authorized and unissued shares of Common Stock three times the number
of Common Stock needed to convert or exercise all Series D Preferred Stock and Warrants issued pursuant to the Purchase Agreement.
The conversion price (the “Conversion Price”)
for the Series D Preferred Stock shall be the amount equal to the lower of (1) $2.08, a fixed price equaling the closing bid price of
the Common Stock on the trading day immediately preceding the date of the Purchase Agreement and (2) one hundred percent (100%) of the
quotient of (A) the sum of the VWAP of the Common Stock for each of the three (3) trading days with the lowest VWAP during the twenty
(20) consecutive trading day period ending on the trading day immediately preceding the date of delivery of a conversion notice and (B)
three, subject to the Beneficial Ownership Limitations. Following an “Event of Default,” as defined in the Purchase Agreement,
the Conversion price shall equal the lower of: (a) the then applicable Conversion Price; or (b) a price per share equaling eighty percent
(80%) of the lowest traded price for the Company’s common stock during the fifteen (15) Trading Days immediately preceding, but
not including, the Conversion Date. The Conversion Price is also subject to adjustment due to certain events, including stock dividends,
stock splits and fundamental transactions and in connection with the issuance by the Company of our Common Stock or Common Stock
equivalents at an effective price per share lower than the Conversion Price then in effect.
The Corporation shall have the right to redeem,
provided the notes issued in the June 2021 financing have been satisfied in full, all (but not less than all), shares of the Preferred
Stock issued and outstanding at any time after the date of issuance, upon five (5) business days’ notice, at a redemption price
per Series D Preferred Stock then issued and outstanding, equal to the product of (i) the Premium Rate multiplied by (ii) the sum of (x)
the Stated Value, (y) all accrued but unpaid dividends, and (z) all other amount due to the Holder pursuant to the COD and/or any document
entered into in connection with this financing. “Premium Rate” means (a) 1.15 if all of the Preferred Stock is redeemed within
ninety (90) calendar days from the issuance date thereof; (b) 1.2 if all of the Preferred Stock is redeemed after ninety (90) calendar
days.
At any time on or prior to the third anniversary
of the date of the Purchase Agreement, upon a Subsequent Financing (as defined in the COD), a holder of at least one hundred (100) shares
of Preferred Stock shall have the right to participate in up to an amount of the Subsequent Financing equal to 35% of the Subsequent Financing
(or, solely with respect to a Subsequent Financing consisting of only Common Stock and warrants to purchase Common Stock (with warrant
coverage not to exceed 25%) for aggregate gross proceeds to the Company of at least five million dollars ($5,000,000), 10% of the Subsequent
Financing) on the same terms, conditions and price provided for in the Subsequent Financing.
Until the date when the Purchaser no longer holds
any Series D Preferred Stock, upon any issuance by the Company or any of its subsidiaries of Common Stock or common stock equivalents
(as defined in the COD) for cash consideration, indebtedness or a combination of units thereof (a “Subsequent Financing”),
the holder may elect, in its sole discretion, to exchange (in lieu of conversion), if applicable, all or some of the shares of Series
D Preferred Stock then held for any securities or units issued in a Subsequent Financing on a $1.00 for $1.00 basis.
The Company shall use its best efforts to file
a registration statement registering the resale of the Registrable Securities within ten (10) calendar days following the Company’s
public filing with the SEC of its Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The Company shall use is best
efforts to have the registration statement declared “effective” within sixty (60) calendar days from its filing.
The COD contains limited negative covenants which
restrict the ability of the Company to take certain actions without the consent of the Purchaser. In addition, following a “Triggering
Event” (as defined in the COD), all outstanding shares of Series D Preferred Stock shall come immediately due for redemption and
the redemption amount shall accrue interest at the lesser of: (a) eighteen percent (18%) per annum; or (b) the maximum legal rate. Redemption
following an Event of Default shall occur at an amount equaling: 1.35 multiplied by the sum of the Stated Value, all accrued but unpaid
dividends and all other amounts due pursuant to the Series D COD for all Series D Preferred Stock outstanding. Additionally, following
an Event of Default, the Conversion Price shall equal the lower of: (a) the then applicable conversion price; or (b) a price per share
equaling eighty percent (80%) of the lowest traded price for the Company’s Common Stock during the fifteen (15) trading days preceding
the relevant conversion.
The Series D Preferred Stock and Warrants sold
were not registered under the Securities Act of 1933, as amended (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 and Regulation
D promulgated thereunder and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any
public offering. The Purchaser is 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 COD, the Warrant
and the Purchase Agreement 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 is attached hereto as Exhibits 3.1, 4.1 and
10.1, respectively .
Consent, Amendment
and Waiver with June 2021 Investors
On March 22, 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 March 23, 2022. Pursuant to the Consent, the Required Holders agreed to the following (i) consent to Company’s entry into the
Purchase Agreement and the issuance of the Series D Preferred Stock and Warrants issued as part of the Purchase Agreement and, solely
with respect to the transactions contemplated by the Purchase Agreement, waive any restriction, covenant or other obligation of the Company
in the June 2021 Purchase Agreement, the Notes (as defined in the June 2021 Purchase Agreement) or any other transaction document entered
into between the parties in order for the Company to enter into, consummate the transactions contemplated by and perform its obligations
under the Purchase Agreement and issue the Series D Preferred Stock and the Warrant, (ii) waive the right of participation with respect
to the issuance of the Series D Preferred Stock and Warrants and (iii) as a condition to the waiver and consent provided herein, the Company
acknowledged and agreed, that notwithstanding anything set forth in the Purchase Agreement, and/or any other related agreement or security,
the Company shall not pay cash to any person pursuant to the Purchase Agreement, at any time any Notes remain outstanding, and any such
payment obligation arising thereunder shall be held in abeyance and shall be expressly subordinate to the rights of the holders of Notes
with respect thereto; provided, that the Company shall be permitted to satisfy any such obligations to any such person in shares of Common
Stock or New Preferred Stock in accordance 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.