UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 


 

FORM 8-K

 


 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

August 20, 2021

(Date of earliest event reported)

 

NovAccess Global Inc.

(Exact name of registrant as specified in its charter)

 

Colorado

 

000-29621

 

84-1384159

(State or other jurisdiction of incorporation)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

8834 Mayfield Road, Suite C, Chesterland, Ohio 44026

(Address of principal executive offices) (Zip Code)

 

(440) 644-1027

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

N/A

N/A

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐ Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On August 20, 2021, NovAccess Global Inc. (“NovAccess” or the “company”), entered into a securities purchase agreement (the “SPA”) with AJB Capital Investments, LLC (“AJB”) and issued a promissory note in the principal amount of $500,000 (the “note”) to AJB pursuant to the SPA. The loan closed and was funded on August 23, 2021. NovAccess will use the proceeds of the loan for general working capital purposes.

 

The note has an original issuance discount of 10% of the principal and bears interest at 10% a year. The note is due on February 20, 2022, but may be extended for six months by NovAccess. NovAccess may prepay the note at any time without penalty. Under the terms of the note, NovAccess may not sell a significant portion of its assets without the approval of AJB, may not issue additional debt that is not subordinate to AJB, must comply with the company’s reporting requirements under the Securities Exchange Act of 1934, and must maintain the listing of the company’s common stock on the OTC Market or other exchange, among other restrictions and requirements. NovAccess’ failure to make required payments under the note or to comply with any of these covenants, among other matters, would constitute an event of default. Upon an event of default under the SPA or note, the note will bear interest at 18%, AJB may immediately accelerate the note due date, AJB may convert the amount outstanding under the note into shares of NovAccess common stock at a discount to the market price of the stock, and AJB will be entitled to its costs of collection, among other penalties and remedies.

 

NovAccess provided customary representations and covenants to AJB in the SPA. NovAccess’ breach of any representation or failure to comply with the covenants would constitute an event of default. Also pursuant to the SPA, NovAccess paid AJB a commitment fee of 400,000 unregistered shares of the company’s common stock (the “commitment fee shares”). If, after February 20, 2022 and before February 20, 2023, AJB has been unable to sell the commitment fee shares for $300,000, then AJB may require NovAccess to issue additional shares or pay cash in the amount of the shortfall. However, if NovAccess pays the note off before February 20, 2022, then the company may redeem 200,000 of the commitment shares for one dollar. Pursuant to the SPA, NovAccess also issued to AJB a common stock purchase warrant (the “warrant”) to purchase 1.0 million shares of the company’s common stock for $1.50 a share. The warrant expires on August 20, 2026. NovAccess agreed to register the shares issuable upon exercise of the warrant no later than February 20, 2023. NovAccess entered into a security agreement with AJB (the “security agreement”) pursuant to which NovAccess granted to AJB a security interest in all of the company’s assets, including the equity of StemVax, LLC, securing NovAccess’ obligations under the SPA, note and warrant.

 

The SPA, note, warrant and security agreement are filed as exhibits to this Current Report on Form 8-K. The descriptions above are qualified in their entirety by reference to the full text of these documents.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosure included under Item 1.01 above is incorporated by reference to this Item 2.03.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The disclosure included under Item 1.01 above is incorporated by reference to this Item 3.02. The issuances of the note, commitment fee shares and warrant to AJB were exempt from registration under Section 4(a)(2) of the Securities Act of 1933.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit 10.1 Securities Purchase Agreement dated August 20, 2021 between NovAccess Global Inc. and AJB Capital Investments, LLC

 

Exhibit 10.2 Promissory Note dated August 20, 2021 in the original principal amount of $500,000 issued by NovAccess Global Inc. to AJB Capital Investments, LLC

 

Exhibit 10.3 Common Stock Purchase Warrant dated August 20, 2021 for 1.0 million shares issued by NovAccess Global Inc. to AJB Capital Investments, LLC

 

Exhibit 10.4 Security Agreement dated August 20, 2021 between NovAccess Global Inc. and AJB Capital Investments, LLC

 

Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL).

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

NovAccess Global Inc.

 
       
       

Dated: August 25, 2021

By:

/s/ Dwain K. Morris-Irvin

 
   

Dwain K. Morris-Irvin, Chief Executive Officer

 
       

 

 
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