QUANTUM MATERIALS CORP. (OTCMKTS:QTMM) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into Material Agreement |
Loans to Quantum Materials Corp.
On March 29, 2017, Quantum Materials Corp. issued a promissory
note in the amount of $169,500 to SBI Investment LLC, 2014-1
(SBI) and a second promissory note in the amount of $395,500 to
L2 Capital, LLC (L2 Capital). The maturity date of these notes is
six months from the funding date of each tranche. The Company
received an aggregate of $300,000 of loan proceeds, before
deduction of legal fees of $15,000 from the first two tranches
and expects to receive an additional $200,000 from the third
tranche shortly after stockholders approve an increase in the
authorized number of shares of common stock to 750,000,000 shares
at its stockholder meeting which is currently scheduled for May
1, 2017. These loans bear guaranteed interest at 6% per annum and
may not be prepaid, except by paying a prepayment penalty on
principal and accrued interest. The notes are not convertible
unless there is an Event of Default as defined in the notes.
Equity Purchase Agreement
On March 29, 2017, the Company entered into an equity purchase
agreement (Eloc) with SBI and L2 Capital to purchase from them up
to $5,000,000 of the Companys common stock. to the terms of the
equity agreement, for a period of up to four years, SBI and L2
Capital are committed to purchase at the election of the Company,
assuming an effective registration statement, and upon delivery
by the Company of a put notice to Put Shares (as defined in the
Eloc) (i) in a minimum amount of not less than $25,000 and (ii)
in a maximum amount up to the lesser of (a) $250,000 or (b) 150%
of the average daily trading value; provided such minimum amount
of Put Shares may be decreased and such maximum amount of Put
Shares may be increased, subject to the Companys approval. Unless
otherwise agreed to in writing by SBI and L2 Capital, the amount
in the Put Notice shall be allocated pro rata among the
participating investors based upon the Maximum Commitment Amount
as defined in the Eloc. The purchase price of the Put Shares
shall mean 80% of the market price (i.e. the lowest closing bid
price for any trading day during the Valuation Period as defined
in the Eloc). If 80% of the lowest closing bid price on the OTCQB
for any trading day during the respective Valuation Period (as
defined in Eloc) is less than the Company minimum price of $.12
per share, then SBI and/or L2 Capital may elect to purchase all
or none of the Put Shares at the Company minimum price.
As further consideration for SBI and L2 Capital entering into the
Eloc, the Company agreed to pay SBI and L2 Capital $63,000 and
$147,000, respectively, in promissory notes. These promissory
notes bear interest at 8% per annum and have a maturity date of
nine months from the date of issuance. These notes are not
convertible unless there is an Event of Default as defined in the
notes.
Common Stock Purchase Warrants
In connection with the loan transactions, the Company is required
to issue warrants to each lender. In connection with the first
tranche, the Company issued to SBI warrants to purchase 253,525
shares and the Company issued to L2 Capital warrants to purchase
760,576 shares. At each closing after the first tranche, the
Company will issue to each of SBI and L2 Capital warrants to
purchase 50% of the total amount of each tranche funded plus the
applicable original issue discount, divided by the lesser of (i)
the closing bid of the common stock on March 29, 2017 and (ii)
the closing bid price of the common stock on the funding date of
each respective tranche.
Registration Rights Agreement
On March 29, 2016, the Company entered into a registration rights
agreement with SBI and L2 Capital. to said agreement, the Company
is required to file a registration statement with the Securities
and Exchange Commission to register the shares of common stock
under the Eloc and all shares of common stock underlying the
notes and warrants issued to SBI and L2 Capital in connection
with the Eloc and loan transactions described above.
Trading Agreement
Exhibit 10.9 filed herewith contains a trading agreement entered
into between SBI and L2 Capital. In accordance with the terms of
the trading agreement, all shares purchased from the Company to
the aforementioned parties agreements with the Company will be
held by a designated brokerage firm and the proceeds of sale will
be paid 70% to L2 Capital and 30% to SBI.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
See Item 1.01 above for a description of certain promissory notes
issued by the Company.
| Item 3.02 | Unregistered Sales of Equity Securities |
The Company is relying from the exemption of registration
requirements of the Securities Act of 1933, as amended, for the
private placement of our securities under the transactions
described in Item 1.01 above to Section 4(2) and/or Rule 506 of
Regulation D of the Securities Act. The transactions did not
involve a public offering, each of SBI and L2 Capital is an
accredited investor and each investor has access to information
about the Company and its investment.
| Item 9.01. | Financial Statements and Exhibits. |
| Exhibit | Description | |
| 10.1 | Form of Equity Purchase Agreement (Eloc).* | |
| 10.2 | Registration Rights Agreement. * | |
| 10.3 |
Form of $147,000 promissory note issued to L2 Capital as a fee in connection with the Eloc.* |
|
| 10.4 |
Form of $63,000 promissory note issued to SBI as a fee in connection with the Eloc. * |
|
| 10.5 |
Form of Securities Purchase Agreement pertaining to $395,500 loan by L2 Capital.* |
|
| 10.6 |
Form of Securities Purchase Agreement pertaining to $169,500 loan by SBI.* |
|
| 10.7 |
Form of $395,500 promissory note issued to L2 Capital in connection with Exhibit 10.5.* |
|
| 10.8 |
Form of $169,500 promissory note issued to SBI in connection with Exhibit 10.6* |
|
| 10.9 |
Trading Agreement dated as of March 31, 2017 by and between L2 Capital LLC and SBI Investments |
|
| LLC, 2014-1 |
* Filed herewith.
About QUANTUM MATERIALS CORP. (OTCMKTS:QTMM)
Quantum Materials Corp. is a nanotechnology company. The Company specializes in the design, development, production and supply of nanomaterials, including quantum dots (QDs), tetrapod quantum dots (TQDs) and other nanoparticles. Its nanomaterials are used for a range of applications in televisions, displays and other optoelectronics, photovoltaics, solid state lighting, life sciences, security ink, battery and sensor sectors of the market. QDs are semiconductor nanoparticles between 2 and 10 nanometers (a billionth of a meter) in diameter. QDs emit light (fluorescence) or electrons when excited with energy, such as light or electricity. A high performance variant of QDs is TQDs. TQDs have a molecular configuration consisting of a center portion and four arms extending from the center that are equally spaced in three dimensions. The Company’s subsidiary, Solterra Renewable Technologies, Inc., is focused on the photovoltaic (solar cell) market. QUANTUM MATERIALS CORP. (OTCMKTS:QTMM) Recent Trading Information
QUANTUM MATERIALS CORP. (OTCMKTS:QTMM) closed its last trading session down -0.001 at 0.139 with 526,190 shares trading hands.