SMARTMETRIC, INC. (OTCMKTS:SMME) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
SmartMetric, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with Geneva Roth Remark Holdings, Inc., (“Geneva”), whereby Geneva purchased from the Company seventy thousand (70,000) shares of Series C Convertible Preferred Stock of the Company (the “Series C Preferred Stock”) for a purchase price of $63,000.00 (the “Purchase Price”).
Although the Purchase Agreement is dated January 9, 2019, the Purchase Price was paid in cash by Geneva to the Company on January 15, 2019 and the transaction closed on that date. After payment of transaction-related expenses, net proceeds to the Company from the sale and issuance of the Series C Preferred Stock totaled $50,000.00. The Company intends to use the proceeds from the Preferred Stock for general working capital purposes.
to the terms of the Purchase Agreement, the Company shall reserve 16,901,408 shares of its authorized and unissued common stock, par value $0.001 per share (the “Common Stock”), free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of the Series C Preferred Stock held by Geneva (the “Reserved Amount”).
Geneva may not convert the Series C Preferred Stock to the extent that such conversion would result in beneficial ownership by Geneva and its affiliates of more than 4.99% of the issued and outstanding Common Stock of the Company.
The Purchase Agreement contains certain representations, warranties, covenants and events of default. The Closing occurred following the satisfaction of customary closing conditions.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is filed as Exhibit 10.1 hereto.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The disclosure under Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 3.02 by reference. The issuance of the securities set forth herein was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act for the offer and sale of securities not involving a public offering. The Company’s reliance upon Section 4(a)(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual entity and the Company; and (f) the recipient of the securities is an accredited investor.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
The disclosures under Items 1.01 and 3.02 of this Current Report on Form 8-K are incorporated into this Item 5.03 by reference.
On January 14, 2019, the Company filed a Certificate of Designation with the Secretary of State of the State of Nevada (the “Certificate of Designation”), which established 1,000,000 shares of the Series C Preferred Stock, par value $0.001 per share, having such designations, rights and preferences as set forth in the Certificate of Designation, as determined by the Company’s Board of Directors in its sole discretion, in accordance with the Company’s Certificate of Incorporation and Bylaws. The Certificate of Designation became effective with the State of Nevada upon filing.
The shares of Series C Preferred Stock have a stated value of $1.00 per share, are convertible into Common Stock at a price per share equal to 71% of the average of the lowest two (2) closing prices of the Common Stock during the fifteen (15) Trading Day (as defined in the Certificate of Designation) period ending on the last complete Trading Day prior to the Conversion Date (as defined in the Certificate of Designation) (the “Conversion Price”), and earn dividends at the rate of 10% per annum. Upon an Event of Default (as defined in the Certificate of Designation), the Series C Preferred Stock earn dividends at the rate of 22% per annum.
The shares of Series C Preferred Stock do not have voting rights, and rank: (a) senior with respect to dividend rights and rights of liquidation with the Common Stock; (b) junior with respect to dividends and right of liquidation with respect to the Company’s Series B Preferred Stock; and (c) junior with respect to dividends and right of liquidation to all existing indebtedness of the Company.
The Company may redeem the Series C Preferred Stock in accordance with the terms of the Certificate of Designation prior to the one hundred eightieth (180th) day following the date of issuance of the Series C Preferred Stock.
The foregoing description of the Certificate of Designation does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, a copy of which is filed as Exhibit 3.1 hereto.
| Item 9.01 | Financial Statements and Exhibits |
SmartMetric, Inc. Exhibit
EX-3.1 2 s115389_ex3-1.htm EXHIBIT 3.1 Exhibit 3.1 BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City,…
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About SMARTMETRIC, INC. (OTCMKTS:SMME)
SmartMetric, Inc. is a development-stage company, which is engaged in the technology industry. The Company’s products are a fingerprint sensor activated payments card and security card with a finger sensor and functional fingerprint reader embedded inside the card with a rechargeable battery for portable biometric identification and card activation. This card is referred to as a biometric card or the SmartMetric Biometric Card. The SmartMetric fingerprint biometric card has been designed as a credit-card sized card embedded with an integrated circuit, contact chip and biometric fingerprint sensor. Its biometric card has been designed to offer the option of a built-in radio frequency transmitter for contactless long range access and identity verification. The SmartMetric biometric payments card provides security for credit and debit cards by adding biometric authentication and activation to the Europay, MasterCard and Visa (EMV) chip cards, which are in use around the world.
