NEXEON MEDSYSTEMS INC (OTCMKTS:NXNN) Files An 8-K Entry into a Material Definitive AgreementItem 1.01:
A
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Where |
X = the number of Shares to be issued to LC. |
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Y = |
the number of Warrant Shares that LC elects to purchase under the Warrant (at the date of such calculation). |
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A = |
the Market Price (at the date of such calculation). |
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B= |
Exercise Price (as adjusted to the date of such calculation). |
Exercise Limitations
The Company shall not effect any exercise of a Warrant, and LC shall not have the right to exercise any portion of a Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise LC, together with its affiliates, and any other persons acting as a group together with LC or any of its affiliates, would beneficially own in excess of the Beneficial Ownership Limitation, as defined below.
The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. Upon no fewer than 61 days’ prior notice to the Company, a Holder may increase or decrease the Beneficial Ownership Limitation provisions of this paragraph, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this paragraph shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company and shall only apply to such Holder and no other Holder. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.
No fractional shares shall be issued upon exercise of a Warrant.
Adjustments.
The Exercise Price and the number of Warrant Shares shall be adjusted from time to time for any distribution of assets by the Company, adjustments for stock splits, combinations and stock dividends, and/or anti-dilution provisions as set forth in the Warrants.
In order to secure the Company’s timely payment of the Note and related obligations and the timely performance of each and all of its covenants and obligations under the SPA and related documents, the Company, Nexeon Medsystems Puerto Rico Operating Company Corporation, a Puerto Rick stock corporation, a wholly-owned subsidiary of the Company, Pulsus Medical LLC, a Kentucky limited liability company, a wholly-owned subsidiary of the Company, and RS, each an “Obligor,” unconditionally and irrevocably granted, pledged and hypothecated to LC a continuing first-priority security interest in and to, a lien upon, assignment of, and right of set-off against, all presently existing and hereafter acquired or arising Collateral as set forth in the Security Agreement.
Share Pledge Agreement.
As additional security for the Company’s timely payment of the Note and related obligations and the timely performance of each and all of its covenants and obligations under the SPA and related documents, RS pledged 107,154 shares, representing 50% of the issued and outstanding shares of NMB to LC.
As a condition to making the loan to the SPA and accepting the Note, LC required Randy M. Rosellini, the father of William Rosellini and a shareholder of the Company (“Guarantor”), to execute a Personal Guaranty (the “Guaranty”) in favor of LC (i) with an absolute and unconditional guarantee to LC and its successors and assigns the payment of the entire principal balance of the loan, all accrued interest thereon and all costs and expenses incurred by LC, including without limitation, the costs and expenses of LC's outside counsel, in connection with the enforcement of the Company's obligations under the Note (the “Obligations”), as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise and (ii) the irrevocable and unconditional covenant and agreement that Guarantor is liable for the Obligations as a primary obligor and that he shall fully perform each and every term and provision of the Guaranty. Guarantor acknowledged that he expects to benefit from LC's making of the loan and acceptance of the Note because of Guarantor's relationship with the Company and that he executed the Guaranty in consideration of that anticipated benefit.
In connection with the issuance of the Personal Guaranty by Mr. Rosellini in the amount of $1,120,000 in conjunction with the Note, the Company granted to Mr. Rosellini a two-year warrant for the purchase of 200,000 shares of the Company’s Common Stock, at an exercise price of $1.50 per share (the “RMR Warrant”). The exercise price of the RMR Warrant may be adjusted from time to time to the terms and conditions of the RMR Warrant. The RMR Warrant may be exercised commencing on the date of issuance and ending at 5:00 p.m. EST on the two year anniversary date of the RMR Warrant, as applicable (the “RMR Exercise Period”). Subject to the terms and conditions of the RMR Warrant, the rights represented by the RMR Warrant may be exercised in whole or in part at any time or times during the RMR Exercise Period. The RMR Warrant is subject to the same Cashless Exercise, Exercise Limitations and Adjustments as set forth above for the LC Warrants.
The foregoing descriptions of the terms of the Securities Purchase Agreement, Senior Secured Convertible Promissory Note, the Two-Year and Five-Year Warrants, the Security and Pledge Agreement, the Share Pledge Agreement, the Personal Guaranty, the RMR Warrant and the Deed of Trust, do not purport to be complete and are subject to and qualified in their entirety by reference to the agreements and instruments themselves, copies of which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8 and 10.9, respectively, to this report, and the terms of which are incorporated herein by reference. The benefits and representations and warranties set forth in such agreements and instruments are not intended to and do not constitute continuing representations and warranties of the Company or any other party to persons not a party thereto.
| Item 1.01 |
Unregistered Sales of Equity Securities. |
The information provided in Item 1.01 is incorporated by reference in this Item 1.01.
The issuance of the shares to the Securities Purchase Agreement, the Commitment Shares and the shares issuable upon any conversion of the Senior Secured Convertible Promissory Note, the Two-Year Warrant, the Five-Year Warrant, and/or the RMR Warrant have not been registered under the Securities Act of 1933, as amended (the “Act”), and therefore may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. For these issuances, the Company relied on the exemption from federal registration under Section 4(a)(2) of the Act and/or Rule 506 promulgated thereunder, based on the Company’s belief that the offer and sale of such securities did not involve a public offering.
| Item 1.01 |
Financial Statements and Exhibits |
NEXEON MEDSYSTEMS INC ExhibitEX-10.1 2 ex10_1.htm EXHIBIT 10.1 EXHIBIT 10.1 NEXEON MEDSYSTEMS INC SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (the “Agreement”) is made as of August 21,…To view the full exhibit click here
About NEXEON MEDSYSTEMS INC (OTCMKTS:NXNN)
Nexeon MedSystems, Inc. is a bioelectronics company developing active medical devices for the treatment of cardiovascular disease. The Company’s developing technology solutions device including electronics, software, mechanical engineering, and material science, as well as pharmaceuticals, protein chemistry, and cell biology. In addition, the Company is developing and commercializing NNS, an implantable neurostimulation and recording platform. The Company’s wholly-owned subsidiaries include Nexeon Medsystems Europe, SARL (Nexeon Europe), Nexeon Medsystems Puerto Rico Operating Company Corporation (NXPROC) and Pulsus Medical LLC. NEXEON MEDSYSTEMS INC (OTCMKTS:NXNN) Recent Trading Information
NEXEON MEDSYSTEMS INC (OTCMKTS:NXNN) closed its last trading session at 0.0000 with shares trading hands.
