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 December 29, 2017, Gopher Protocol Inc. (the “Company”) entered into a Securities Purchase Agreement with Eagle Equities, LLC ("Eagle") to which Eagle agreed to purchase up to 2,000,000 shares of the Company’s common stock for a purchase price of $1,500,000 or $0.75 per share. The closing occurred on December 29, 2017 with respect to the funding of $1,000,000 resulting in the issuance of 1,333,334 shares of common stock (the “First Closing Shares”). On March 21, 2018, Eagle purchased an additional 666,666 shares of common stock (the “Second Closing Shares”) for a purchase price of $500,000 that been wired into the Company’s bank account.
The Company placed 2,000,000 (1,333,334 on prior closing on December 29, 2017 and additional 666,666 on this current closing) shares of common stock (the “Escrow Shares”) in escrow to be utilized for the purpose of limited price protection. If, beginning on the seventh month anniversary of the issuance of the First Closing Shares and Second Closing Shares if the second closing occurs, Eagle has sold any of the First Closing Shares or the Second Closing Shares as the case may be at a sales price of less than $0.72 per share, then that number of Escrow Shares shall be released from escrow to Eagle as a limited make whole which shall be determined by using the following formula:
($0.72 – Closing Price) / Closing Price) * number of shares sold at a price less than $0.72.
Closing Price is price on the first day of each monthly anniversary beginning on the first day of the 7th month (and continuing monthly until the earlier of January 31, 2019 or until all shares are sold).
The Company shall deposit an additional 2,000,000 shares of common stock into escrow which shares shall only be released to Eagle, if, prior to January 31, 2019 (while Eagle continues to hold shares), the Company issues shares at an issue price of less than $0.30 per share.
The Company also issued Eagle a Common Stock Purchase Warrant to acquire 666,666 shares of common stock exercisable for three years at an exercise price of $2.00 per share (the “Eagle Warrant”). Unless otherwise agreed in writing by both the Company and Eagle, at no time will Eagle exercise any amount of the Eagle Warrant to purchase common stock that would result in Eagle owning more than 9.9% of the common stock outstanding of the Company. The Eagle Warrant contains standard anti-dilution protections.
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” and, together with Eagle Equities Note 1, the “Eagle Equities Notes”), 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 is due on May 13, 2018, unless the Company does not meet the current public information requirement to Rule 144, in which case both Eagle Equities Note 2 and the Eagle Equities Payment Note may be cancelled. The Eagle Equities Payment Note is secured by the Eagle Equities Note 1. The above financing closed on September 20, 2017. On December 29, 2017, Eagle converted the Eagle Equities Note 1 into 503,726 shares of common stock.
Upon any of its securities being available for resale under Rule 144 as promulgated under the Securities Act of 1933, Eagleshall limit its saleswith regard toany shares of common stock it ownsto the greater of $10,000 in gross sales per day or 10% of theaggregatetrading volumeper day.
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(a)(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 9.01Financial Statements and Exhibits
| (1) | Incorporated by reference to the Form 8-K Current Report filed with the Securities Exchange Commission on January 3, 2018 |
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.