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Item 1.01.
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Entry into a Material Definitive Agreement.
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Securities
Purchase Agreement and Convertible Promissory Note with Power Up Lending Group Ltd.
On May 3, 2019, Ozop Surgical Corp. a Nevada
corporation (the “Company”) entered into a securities purchase agreement (the “SPA”) with Power Up Lending
Group Ltd., a Virginia corporation (the “Investor”), pursuant to which the Company agreed to issue a 12% Convertible
Promissory Note, (the “Note”) in the principal amount of $58,000 in exchange for a purchase price of $58,000. The Note
was funded by the Investor on May 6, 2019, and on such date pursuant to the SPA, the Company reimbursed the Investor for expenses
for legal fees and due diligence of $3,000. The proceeds will be used by the Company for general working capital purposes.
Pursuant to the SPA, the Company agreed not
to conduct any equity (or debt with an equity component) financing in an amount less than $150,000 (the “Future Offering”)
during the period beginning on the date of the issuance of the Note and ending nine months following such date without first giving
the Investor notice of the Future Offering and allowing the Investor the option to purchase the securities being offered in the
Future Offering on the same terms as contemplated by such Future Offering. The SPA includes customary representations, warranties
and covenants by the Company and customary closing conditions.
The Note matures 12 months after the date of
issuance. The Note is convertible into shares of the Company’s common stock beginning on the date which is 180 days from
the issuance date of the Note, at a conversion price equal to 61% multiplied by the lowest trading price, as such term is defined
in the Note, during the 20 trading day period ending on the last completed trading date in the OTC Markets prior to the date of
conversion, provided, however, that the Investor may not convert the Note to the extent that such conversion would result in the
Investor’s beneficial ownership being in excess of 4.99% of the Company’s issued and outstanding common stock together
with all shares owned by the Investor and its affiliates. The beneficial ownership limitation may not be waived by the Investor.
The Note carries a pre-payment penalty if the
Note is paid off in 30, 60, 90,120,150, or 180 days following the issue date. The pre-payment penalty is based on the then outstanding
principal at the time of pay off plus accrued and unpaid interest multiplied by 110%, 115%, 120%, 125%, 130%, and 135% respectively.
After the expiration of 180 days following the issue date, the Company shall have no right of prepayment.
Pursuant to the Note, during any period any
obligations are owed to the Investor under the Note, if the Company seeks to sell enter into a lease or otherwise dispose of any
significant portion of its assets outside of the ordinary course of business, it must first obtain the Investor’s written
consent to do so.
Pursuant to the Note, during any period where
funds are owed under the Note, if the Company enters into any future financing transactions with a third party investor, excluding
certain exempted issuances listed in the Note, the Company will be required to give notice of same to the Investor at least 10
days prior to closing of such future financing, and in the event that the Investor determines that the terms of the subsequent
investment are preferable to the terms of the securities issued to the Investor pursuant to the terms of the SPA, the Company will
have to amend and restate the securities issued to the Investor pursuant to the SPA (which may include the conversion terms of
the Note), to be identical to the instruments evidencing the subsequent investment.
The foregoing descriptions
of the SPA and the Note do not purport to be complete and are qualified in their entirety by reference to the full text of the
SPA and the Note, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are
incorporated by reference herein.
Funding of Second Tranche and Warrant
Issued to Crown Bridge Partners, LLC
On May 7, 2019, the Company issued a warrant (the “Warrant”) to purchase 18,333 shares of the
Company’s common stock at an exercise price of $1.50 for a term of three (3) years to Crown Bridge Partners, LLC (CBP). The Company anticipates receiving the
funding of the second tranche on May 10, 2019, in an amount of $23,500 (the “Second Tranche”) under the $165,000
convertible promissory note issued by the Company to CBP on February 5, 2019. The
foregoing description of the Warrant does not purport to be complete and is qualified in its entirety by reference to the
full text of the Warrant, a copy of which is filed as Exhibits 10.3, to this Current Report on Form 8-K and is incorporated
by reference herein.
Securities Purchase Agreement and Convertible
Promissory Note with Crossover Capital Fund I, LLC
On
May 7, 2019, the Company entered into a securities purchase agreement (the “CC SPA”) with Crossover Capital Fund I,
LLC (“CC”) pursuant to which the Company agreed to issue a 12% Convertible Promissory Note, (the “CC Note”)
in the principal amount of $52,500 in exchange for a purchase price of $50,000, with the $2,500 difference representing the original
issue discount. The CC Note was funded by CC on May 8, 2019, when the Company received $47,500, after lender costs of $2,500..
The CC SPA includes customary representations, warranties and covenants by the Company and customary closing conditions.
The
CC Note matures on February 7, 2020. The CC Note is convertible into shares of the Company’s common stock, at a conversion
price equal to 58% multiplied by the average of the two lowest trading price during the 20 trading day period ending on the last
completed trading date in the OTC Markets prior to the date of conversion. The CC Note carries a pre-payment penalty if the Note
is paid off in 60 or every 30 days thereafter up to 180 days following the issue date. The pre-payment penalty is based on the
then outstanding principal at the time of pay off plus accrued and unpaid interest multiplied by 120%, if paid before 60 days,
and additional 5% increments accumulating for every 30 days thereafter up to 180 days. After the expiration of 180 days following
the issue date, the Company shall have no right of prepayment.
The foregoing descriptions of the CC SPA and the CC Note do not purport to be complete and are qualified
in their entirety by reference to the full text of the CC SPA and CC Note, copies of which are filed as Exhibits 10.4 and 10.5,
respectively, to this Current Report on Form 8-K and are incorporated by reference herein.