Item 1.01 Entry into a Material Definitive Agreement
On July 7, 2017, the Company amended one May 5, 2015 9% Convertible Promissory Note with a principal amount of $275,000 as follows: the maturity date was extended to September 7, 2017 and in the event the borrower completes an asset sale or capital raise of more than $225,000, then the Notes shall automatically immediately become due and payable.
On July 11, 2017, the Company issued a Convertible Promissory Note to the Isaac Blech in the amount of $50,000. Mr. Blech is a member of the Company’s board of directors. The Convertible Promissory Note bears interest at the rate of 9% has maturity date of August 31, 2017, and a voluntary conversion into an upcoming financing in the event the Company closes the financing and receives gross proceeds totaling at least $200,000. The conversion rate will be at the same terms of the financing.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Reference is made to the discussion in Item 1.01 above with respect to the obligation of the Company pursuant to the Note.
Item 3.02 Unregistered Sales of Equity Securities
As stated in Item 1.01 above, which information is hereby incorporated herein by this reference, effective as of July 11, 2017, the Company sold the Note to Isaac Blech. The Company received proceeds of $50,000 under the Note.
The Note was not registered under the Securities Act of 1933, as amended (the “Act”), in reliance upon the exemption from registration contained in Section 4(2) of the Act. The Note and the shares of Common Stock issuable upon the conversion of the Note may not be reoffered or sold in the United States by the holder in the absence of an effective registration statement or exemption from the registration requirements of the Act.
The Company intends to use the proceeds from the sale of the Note for working capital and general corporate purposes.
AI
