Notis Global Inc (OTCMKTS:NGBL) entered into a Note Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Investor”), pursuant to which the Company agreed to sell, and the Investor agreed to purchase, a secured convertible promissory note (the “Note”) in the aggregate principal amount of $53,000.
The Investor deducted a commitment fee in the amount of $3,000 at the closing. The Note bears interest at the rate of 5% per annum and matures on April 30, 2017. The Company may not prepay any part of the outstanding balance of the Note at any time prior to maturity without the written consent of the Investor. At any time or from time to time, the Investor may convert the Note, in whole or in part, into shares of the Company’s common stock at a conversion price that is the lower of (a) $0.75, or (b) 51% of the lowest volume weighted average price for the 30 consecutive trading days prior to the conversion date.
In connection with entry into the Purchase Agreement, the parties also entered into a Global Debenture Amendment (the “Debenture Amendment”), pursuant to which the Investor and the Investor’s affiliate shall be entitled to the same “look-back” period on establishing the conversion price with regard to any convertible note or debenture, including the Note, as any other investor is entitled to pursuant to notes or debentures held by such investor. Based on the terms of the Company’s other convertible notes and debentures, other investors shall be entitled to the same rights established in the Debenture Amendment. Therefore, each of the Company’s investors holding convertible debt shall be entitled to the same “look-back” period when establishing the conversion price for their respective notes or debentures.
In connection with issuance the Note, the Company relied on the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering and Rule 506 of Regulation D promulgated thereunder. The Investor represented to the Company that it was an “accredited investor” as such term is defined under Regulation D and that the offer and sale of the Note did not involve any form of general solicitation or general advertising.
The foregoing description of the Purchase Agreement, the Note, and the Debenture Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of the documents, which shall be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the third quarter of 2016 or Form 10-K for the year ended December 2016.
