|
Item
1.01
|
Entry
into a Material Definitive Agreement.
|
Power
Up Financing
On
February 21, 2019, NanoFlex Power Corporation, a Florida corporation (the “Company”) entered into a Securities Purchase
Agreement (the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up
agreed to purchase a convertible promissory note (the “Power Up Note”) in the aggregate principal amount of $63,000.
On February 21, 2019, the Company issued the Power Up Note. The Power Up Note entitles the holder to 12% interest per annum and
matures on December 15, 2019.
Under
the Power Up Note, Power Up may convert all or a portion of the outstanding principal of the Power Up Note into shares of common
stock, $0.0001 par value per share (the “Common Stock”) of the Company beginning on the date which is 180 days from
the issuance date of the Power Up Note, at a price equal to 61% of the average of the lowest two trading prices during the 15
trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up
may not convert the Power Up Note to the extent that such conversion would result in beneficial ownership by Power Up and its
affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.
If
the Company prepays the Power Up Note within 30 days of its issuance, the Company must pay all of the principal at a cash redemption
premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note, then
such redemption premium is 115%; if such prepayment is made from the 61st to the 90th day after issuance, then such redemption
premium is 120%; and if such prepayment is made from the 91st to the 180th day after issuance, then such redemption premium is
125%. After the 180th day following the issuance of the Power Up Note, there shall be no further right of prepayment.
In
connection with the Power Up Note, the Company agreed to cause its transfer agent to reserve 17,035,659 shares of Common Stock,
in the event that the Power Up Note is converted. The closing occurred on February 25, 2019, and the Company received a net amount
of $53,700.
One44
Financing
On
February 22, 2019, the Company entered into a Securities Purchase Agreement (the “One44 SPA”) with One44 Capital LLC
(“One44”) pursuant to which One44 agreed to purchase a convertible redeemable note (the “One44 Note”)
in the aggregate principal amount of $70,000. On February 22, 2019, the Company issued the One44 Note. The One44 Note entitles
the holder to 12% interest per annum and matures on February 22, 2020.
Pursuant
to the One44 Note, during the first six months after issuance, One44 may convert all or a portion of the outstanding principal
of the One44 Note into shares of Common Stock of the Company at a fixed price equal to $0.25 per share. Thereafter, the conversion
price per share shall be equal to 60% of the lowest trading price during the 20 prior trading days (including the day upon which
a notice of conversion is received), provided, however, that if the Company experiences a DTC “Chill” on its shares
of Common Stock, the conversion price shall be reduced to 50% while such DTC “Chill” remains in effect. One44 may
not convert the One44 Note to the extent that such conversion would result in beneficial ownership by One44 and its affiliates
of more than 4.99% of the Company’s issued and outstanding Common Stock.
If
the Company prepays the One44 Note within 60 days of its issuance, the Company must pay the principal at a cash redemption premium
of 120%; if such prepayment is made between the 61st day and the 120th day after the issuance of the One44 Note, then such redemption
premium is 130%; if such prepayment is made from the 121st to the 180th day after issuance, then such redemption premium is 140%.
After the 180th day following the issuance of the One44 Note, there shall be no further right of prepayment.
In
the event all or substantially all of the assets or equity of the Company is acquired by a third party, One44 may elect to either
(i) have the One44 Note redeemed by the Company in cash at a premium of 150% of the principal amount of the One44 Note, plus accrued
but unpaid interest or (ii) convert the One44 Note into shares of Common Stock of the Company at the applicable conversion price.
In
connection with the One44 Note, the Company agreed to cause its transfer agent to reserve 11,666,000 shares of Common Stock, in
the event that the One44 Note is converted. One44 has the right to periodically request that the number of shares reserved be
increased to at least 400% the number of shares of Common Stock issuable upon conversion of the One44 Note. The closing occurred
on February 22, 2019, and the Company received a net amount of $66,500.
Series
A Preferred Stock
On
February 15, 2019, the Company established a series of redeemable participating convertible preferred stock (the “Series
A Preferred Stock”), par value $0.0001 per share, pursuant to a Certificate of Designation of Series A Redeemable Participating
Convertible Preferred Stock (the “Certificate of Designation”), dated February 15, 2019.
Pursuant
to the Certificate of Designation, the Company authorized 10,000 shares of the Series A Preferred Stock, which shall be convertible
into shares of Common Stock of the Company at the option of the holders thereof at any time after the issuance of the Series A
Preferred Stock, at a conversion price equal to $0.10 subject to certain anti-dilution adjustments.
So
long as 50% of the Series A Preferred Stock that has been issued remains outstanding, the holders thereof will have the right
to participate ratably in any offering of Common Stock of the Company or any other securities of the Company that would entitle
the holder thereof to acquire Common Stock of the Company.
The
foregoing summaries of the terms of the Power Up Note, the One44 Note, the Power Up SPA, the One44 SPA and the Certificate of
Designation are subject to, and qualified in their entirety by, the agreements and instruments attached hereto as Exhibits 4.1,
4.2, 4.3, 10.1 and 10.2, respectively, which are incorporated by reference herein.