Bridge Financing

The Company is currently in discussions with various entities with regard to long term financing for its operations and it believes it can put into place a financing that will meet its needs over the few months. In the interim, the Company has decided to utilize a bridge financing, that will be repaid from proceeds of its long-term financing.The Company is treating this as a typical short-term note, even though it has a conversion provision, and does not intend to allow it to convert.

In that regard, on July 5, 2018, the Company entered into a Securities Purchase Agreement (the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) to which Power Up agreed to purchase a convertible promissory note (the “Power Up Note”) in the aggregate principal amount of $38,000.00. On July 5, 2018, the Company issued the Power Up Note. The Power Up Note entitles the holder to 12% interest per annum and matures on April 15, 2019.The Power Up Note was funded on July 10, 2018.

Under the Power Up Note, Power Up may convert all or a portion of the outstanding principal of the Power Up Note into shares of Common Stock beginning on the date which is 180 days from the issuance date of the Power Up Note, at a price equal to 61% of the average of the lowest two trading prices during the 15 trading day period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert the Power Up Note to the extent that such conversion would result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

If the Company prepays the Power Up Note within 30 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day and the 60th day after the issuance of the Power Up Note, then such redemption premium is 115%; if such prepayment is made from the sixty first 61st to the 90th day after issuance, then such redemption premium is 120%; and if such prepayment is made from the 91st to the 180th day after issuance, then such redemption premium is 125%. After the 180th day following the issuance of the Power Up Note, there shall be no further right of prepayment.

The foregoing summaries of the terms of the Power Up Note and the Power Up SPA are subject to, and qualified in their entirety by, the agreements and instruments attached hereto as Exhibits 4.1 and 10.1, respectively, which are incorporated by reference herein.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 above with respect to the Power Up Note, the Power Up SPA and the related agreements is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 above with respect to the Offering is incorporated herein by reference. The sales in the Offering were made in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”), to Section 4(2) of the Act.

The information set forth under Item 1.01 above with respect to the issuance of the Power Up Note is incorporated herein by reference. The issuance of the Power Up Note was made in reliance upon the exemption from the registration requirements of the Act,
True Nature Holding, Inc. Exhibit
EX-4.1 2 ex4-1.htm EX-4.1   Exhibit 4.1       NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,…
To view the full exhibit click here