On April 30, 2021, Boston Therapeutics, Inc. (the “Company”) received a short-term loan in the aggregate principal amount of $500,000 from Gold Blaze Limited Vistra Corporate Services (“Gold Blaze”). Gold Blaze is a British Virgin Island company. Conroy Chi-Heng Cheng, the sole executive officer and director of the Company, a director and beneficial owner of Gold Blaze.
To evidence the loan, the Company issued Gold Blaze a promissory note (the “Gold Blaze Note”) in the aggregate principal amount of $500,000. The Gold Blaze Note is a secured obligation of the Company and is not convertible into equity securities of the Company. Principal and interest under the Gold Blaze Note is due and payable December 31, 2021. Interest accrues on the Gold Blaze Note at the rate of 5.0% per annum. The Gold Blaze Note contains terms and events of default customary for similar transactions. If the Company effects a subsequent financing of its equity, debt, equity-linked, and/or debt-linked securities (including any combination thereof) (a “Subsequent Financing”), Gold Blaze may elect, in its sole discretion, to exchange all or some of the Gold Blaze Note for any securities issued in a Subsequent Financing on a $1.00 for $1.00 basis based on the outstanding principal amount of the Gold Blaze Note, along with any liquidated damages, accrued but unpaid and other amounts owing thereon, and the effective price at which such securities are to be sold in such Subsequent Financing.
As previously reported, on January 26, 2021, the Company, BTHE Acquisition Inc., a California corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and Nanomix, Inc., a California corporation (“Nanomix”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Nanomix, with Nanomix continuing as a wholly-owned subsidiary of the Company and the surviving corporation of the merger (the “Merger”). The Company used the net proceeds from the Gold Blaze Note to provide a $500,000 loan to Nanomix in consideration of a 10% Promissory Note issued by Nanomix to the Company (the “Nanomix Note”) due and payable upon the earlier of (i) the failure to consummate the Merger, (ii) the termination of the Merger Agreement and (iii) June 11, 2021; provided, however, that upon the consummation of the Merger, the outstanding principal amount of this Note and all accrued and unpaid interest thereon shall be assumed by the Maker and become payable upon demand upon five days prior written notice from the Holder.
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