GOPHER PROTOCOL INC. (OTCMKTS:GOPH) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
| Item 3.02 | Unregistered Sales of Equity Securities |
On September 1, 2017, Gopher Protocol Inc. (the “Company”) entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with RWJ Advanced Marketing, LLC (“RWJ”), a Georgia corporation, to which the Company purchased certain assets from RWJ, including inventory, terminals, licenses and permits and intangible assets, in consideration of $400,000, an aggregate 5,000,000 shares of common stock of the Company (the “RWJ Shares”), secured promissory note in the amount of $2,600,000 (the “RWJ Note”), warrants to purchase 9,000,000 shares of common stock (the “RWJ Warrants”) and the assumption of certain liabilities incurred by RWJ after the effective date as set forth in the RWJ Agreement (the “RWJ Assumed Liabilities”). RWJ assigned 3,000,000 RWJ Shares and 5,000,000 RWJ Warrants to Robert Warren Jackson and 2,000,000 RWJ Shares and 4,000,000 RWJ Warrants to Gregory Bauer, which such RWJ Shares were issued to Mr. Jackson and Mr. Bauer on December 29, 2017.
On September 13, 2017, the Company entered into a Securities Purchase Agreement with Eagle to which the Company issued Eagle two convertible notes. The first note, due September 18, 2018 in the principal amount of $50,000 (“Eagle Equities Note 1”), was issued in exchange for $50,000 in cash. The second note, due September 13, 2018 in the principal amount of $50,000 (“Eagle Equities Note 2”), was issued in exchange for a full-recourse, collateralized promissory note from Eagle Equities in the amount of $45,000 (“Eagle Equities Payment Note”). The Eagle Equities Payment Note was due on May 13, 2018. On December 29, 2017, as previously disclosed, Eagle converted the Eagle Equities Note 1 into 503,726 shares of common stock. In addition, on December 31, 2017, the Company and Eagle entered into a Rescission Agreement to which Eagle Equities Note 2 and the Eagle Equities Payment Note were cancelled and rescinded.
Since April 2016, Guardian Patch, LLC (:Guardian Patch) a non-affiliate- provided loans to the Company for the Company’s working capital purposes, outside of its commitment to develop the sticky patch package (“Patch”), in the aggregate amount of $660,131.80 (the “Loans”). On May 23, 2017, the Company entered into a Conversion Agreement with Guardian LLC to which the parties agreed to convert the Loans provided by Guardian LLC to the Company into a Convertible Promissory Note in the amount of $660,131.80 (the “Note”). On June 26, 2017, the Company and Guardian LLC entered into a Lock-Up and Leak-Out Agreement (“Guardian Lock-Up”) to which Guardian LLC agreed that for a period of nine months (the “Restricted Period”) to not convert the Note into common stock of the Company or in any way transfer the Note or any beneficial rights under the Note. During the period beginning at the end of the Restricted Period and ending 15 months from the date of the agreement, Guardian LLC will be permitted to sell an amount of shares of common stock equal to the lesser of 5% of the previous day’s traded volume or 5,000 shares of common stock. On December 29, 2017, Guardian Patch and the Company entered into an Amendment of Lock Up and Leak Out Agreement to which the lock up contained in the Guardian Lock-Up was terminated but the leak out provision shall remain in place. On December 29, 2017, Guardian Patch converted all of the principal and interest of the Note, into 2,000,000 shares of Series G Preferred Stock. The Series G Preferred Stock is entitled to vote on an as-converted basis, automatically converts to common stock upon any liquidation, dissolution or winding up and the Company may not declare a dividend until the Series G Preferred Stock has received a dividend. Each share of Series G Preferred Stock is convertible into one shares of common stock of the Company and contain standard anti-dilution rights. As long as at least 15% of the Series G Preferred Stock remain outstanding, without the consent of 67% of the Series G Preferred Stock, the Company may not incur indebtedness or liens, acquire its shares of common stock, enter into transactions with an affiliate or amend its Articles of Incorporation or Bylaws. Guardian LLC has agreed to restrict its ability to convert the Series G Preferred Stock and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and its affiliates after such conversion does not exceed 4.9% of the then issued and outstanding shares of common stock.
On June 29, 2017, as previously disclosed, the Company and Stanley Hills, LLC (“Stanley”) entered into a Lock-Up and Leak-Out Agreement (the “Stanley Lock-Up”) to which Stanley agreed that during the Restricted Period to not convert its 10% Convertible Debenture in the amount of $28,635.55 (the “Stanley Note”) into common stock of the Company or in any way transfer the Stanley Note or any beneficial rights under the Stanley Note. During the period beginning at the end of the Restricted Period and ending 15 months from the date of the agreement, Stanley will be permitted to sell an amount of shares of common stock equal to the lesser of 5% of the previous day’s traded volume or 5,000 shares of common stock. On December 29, 2017, Stanley and the Company entered into an Amendment of Lock Up and Leak Out Agreement to which the lock up contained in the original Stanley Lock-Up was terminated but the leak out provision shall remain in place. On December 22, 2017, Stanley converted all of the principal and interest of the Stanley Note totaling to $31,775.25 payable the Stanley Note into 4,221,334 restricted shares of common stock of the Company.
The offers, sales and issuances of the securities listed above were made to accredited investors and the Company relied upon the exemptions contained in Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated there under with regard to those sales. No advertising or general solicitation was employed in offering the securities. The offers and sales were made to a limited number of persons, each of whom was an accredited investor and transfer of the common stock issued was restricted by the Company in accordance with the requirements of the Securities Act of 1933.
The foregoing information is a summary of each of the agreements involved in the transactions described above, is not complete, and is qualified in its entirety by reference to the full text of those agreements, each of which is attached an exhibit to this Current Report on Form 8-K.Readers should review those agreements for a complete understanding of the terms and conditions associated with this transaction.
| Item 9.01 | Financial Statements and Exhibits |
Gopher Protocol Inc. Exhibit…To view the full exhibit click here
About GOPHER PROTOCOL INC. (OTCMKTS:GOPH)
Gopher Protocol, Inc. (Gopher), formerly Forex International Trading Corp., is in the process of developing a real-time, heuristic-based, mobile technology. Upon development, the technology will consist of a smart microchip, mobile application software and supporting software that run on a server. The Company applied this technology into an electronic circuit, including a microchip that is within a sticky patch package (the Patch). The Patch can be affixed to any object, mobile or static, which will enable the object to which it is affixed to be tracked remotely. The Patch will also perform an emergency feature. The Patch also alerts the user’s friends and family about the user’s location. The Company also developed Gopher Epsilon Software, which is an internal platform that has been developed as a designated tool for the mobile industry to improve signoff Reliability Verification (RV) with Accurate and Precise Interactive Error Detection and Correction.
