AXIM 8-K
Axim Biotechnologies, Inc. (AXIM)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry into a Material Definitive Agreement
Effective February 10, 2022, AXIM Biotechnologies, Inc. (the “Company”) issued the following debt obligations in exchange for cash. A portion of the funds received by the Company were used to pay off the GS Capital Partners, LLC note described in Item 1.02.
Short Term Promissory Notes
Effective February 10, 2022, the Company issued two short term notes, each having a face amount of $250,000, in exchange for a total of $500,000 in cash (the "Short Term Promissory Notes"). The Short Term Promissory Notes bear interest at the rate of 1.5% per annum and are due and payable on or before March 10, 2022, unless demand for payment is made prior to such date. One of the two notes was paid in full on February 14, 2022.
Convertible Notes
Effective February 10, 2022, the Company issued seven (7) convertible notes to a series of investors having an aggregate face value of $1,325,000 in exchange for $1,325,000 in cash (the "Convertible Notes"). One of the Convertible Notes, face value $25,000, was acquired by Blake N. Schroeder who is a director of the Company.
Each of the Convertible Notes is (i) unsecured; (ii) bears interest at a rate of 3% per annum; (iii) matures on February 10, 2032; and (iv) is convertible, in whole or in part, at any time by the holder, into restricted shares of the Company's common stock at a conversion price equal to the lesser of $0.08125 or 70% of the average of the two (2) lowest closing prices of the Company’s common stock in the ten (10) trading days preceding any particular conversion, provided, the holder is prohibited from converting the convertible note, or portion thereof, if such conversion would result in beneficial ownership by the holder and its affiliates of more than 4.9% of Company’s issued and outstanding common stock as of the date of the conversion.
The foregoing summaries of the Short Term Promissory Notes and Convertible Notes does not purport to be complete and is subject to, and qualified in its entirety, by reference to the form of Short Term Promissory Notes and Convertible Notes attached hereto as Exhibits 10.1 and 10.2 respectively, which are incorporated herein by reference.
Item 1.02 Termination of Material Definitive Agreement
GS Capital Partners, LLC Note
On February 10, 2022, the Company paid in full the remaining balance due on that certain convertible note issued to GS Capital Partners, LLC, face value $1,110,000, as amended (the "GS Note"). In connection with the repayment, the Company was required to pay accrued interest in the amount of $21,875.89, by issuing 173,390 restricted shares of the Company’s common stock pursuant to the formula set forth in the GS Note.
The foregoing summary of the GS Note, as amended, does not purport to be complete and is subject to, and qualified in its entirety, by reference to the GS Note attached hereto as Exhibit 10.3, which is incorporated herein by reference.
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 in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit # |
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10.1 |
| Form of 1.5% Short Term Promissory Notes dated February 10, 2022. |
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10.2 |
| Form of 3% Short Term Convertible Notes dated February 10, 2022. |
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10.3 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AXIM BIOTECHNOLOGIES, INC. | |
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Dated: February 16, 2022 | By: | /s/ John W. Huemoeller II |
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| Name: John W. Huemoeller II |
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| Chief Executive Officer |
PROMISSORY NOTE
$250,000 | San Diego, California | Dated: February 10, 2022 |
FOR VALUE RECEIVED, the undersigned, Axim Biotechnologies, Inc., a Nevada corporation (“Debtor”), promises to pay to the order of [INVESTOR], a [________________________], or order (“Holder”), at the corporate offices of Holder, or such other place as Holder may designate, the principal amount of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000), together with interest on the unpaid principal balance from time to time outstanding, computed on the basis of a three hundred sixty (360) day year and compounded on a yearly basis at the rate of One and One-Half Percent (1.5%) per annum (the “Interest Rate”).
1.Payment of Principal and Interest. Interest upon this Promissory Note (the “Note” or “Promissory Note”) shall accrue at the Interest Rate until maturity of March 10, 2022 at which time all interest and principal shall be due and payable. Notwithstanding the foregoing, this Note is payable upon demand which may be made at any time by Holder.
2.Prepayment. Debtor shall be permitted to prepay this Note, in whole, but not in part, without the consent of Holder and without penalty.
3.Event of Default. Each of the following shall constitute an Event of Default under this Note:
(a) Debtor fails to make any payment when due.
(b)Upon any assignment by Debtor for the benefit of creditors, or filing by or against Debtor of a petition in bankruptcy, or adjudication of Debtor as bankrupt or insolvent, or filing by or against Debtor of any petition or answer seeking for Debtor any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, or filing any answer admitting or failing to deny the material allegations of a petition filed against it for any such relief, or seeking or consenting to or acquiescing in the appointment of any trustee, receiver or liquidator of itself or of all or any substantial part of its properties, or its directors or stockholders taking any action looking to its dissolution or liquidation.
4.Holder's Rights. Upon an Event of Default, Holder may declare the entire unpaid principal balance on this Note together with interest on any unpaid balance immediately due, without notice, and then Debtor will pay that amount.
If any Event of Default occurs, neither the failure of Holder to promptly exercise its right to declare the outstanding principal of and accrued and unpaid interest on this Note to be immediately due and payable, nor the failure of Holder to exercise any other right or remedy that it may have for default, nor the acceptance by Holder of late payments, nor the failure of Holder to demand strict performance of any obligation of Debtor hereunder, shall constitute a waiver of any such rights while such default continues, nor a waiver of such rights in connection with any future default on the part of Debtor. Furthermore, acceptance by Holder of partial payments following due acceleration of the indebtedness evidenced hereby shall not constitute a waiver by Holder of the acceleration of such indebtedness.
5.Sale, Assignment or Transfer of Note. The Holder of this Note may not sell, assign, transfer, pledge or hypothecate this Note without the Debtor's prior consent.
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6.Maximum Rate. All agreements which either are now or which shall become agreements between Debtor and Holder are expressly limited so that in no contingency or event whatever, whether by reason of deferment or advancement of the indebtedness represented by this Note, acceleration of the maturity date of this Note, or otherwise, shall the amount paid or agreed to be paid to Holder for the use, forbearance or detention of the indebtedness evidenced by this Note exceed the maximum amount of interest permissible under applicable law. If at any time, from any circumstance whatsoever, fulfillment of any provision of this Note or any other agreement between Debtor and Holder shall result in or involve payments or performance which would exceed the maximum legal interest rate, then ipso facto, the obligation to be fulfilled shall be reduced so as not to exceed such maximum legal interest rate.
7.Waiver. No delay or omission on the part of any holder hereof in exercising any right or option herein given to such holder shall impair such right or option to be considered as a waiver thereof or acquiescence in any default hereunder. Debtor hereby waives any applicable statute of limitations, presentment, demand for payment, protest and notice of dishonor.
8.Attorney’s Fees. In the event of any dispute, action, or other proceeding brought by either party against the other under this Note, the prevailing party shall be entitled to recover all costs and expenses incurred in connection with such dispute, action, or other proceeding, including, without limitation, the fees and costs of its attorneys, whether or not such dispute, action, or other proceeding proceeds to formal resolution or judgment.
9.Cumulative. Holder's rights and remedies under this Note and applicable law shall be cumulative and not in the alternative.
10.Governing Law and Venue. This Note is and shall be governed by and construed and enforced in accordance with the laws of the State of California without application of conflict of laws principles. Sole and proper venue and jurisdiction for any dispute arising out of or relating to this Note shall be San Diego County Superior Court in San Diego, California.
11.Successors. The provisions of this Note shall inure to the benefit of Holder's successors and assigns, and are binding on Debtor's successors.
12.Time of Essence. Time is of the essence under this to Note.
13.Severability. Should any one or more of the provisions of this Note be determined to be illegal or unenforceable, such provision(s) shall (i) be modified to the minimum extent necessary to render it valid and enforceable, or (ii) if it cannot be so modified, be deemed not to be a part of this Note and shall not affect the validity or enforceability of the remaining provisions.
[Remainder of Page Intentionally Left Blank, Signature Page to Follow]
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IN WITNESS WHEREOF the parties have entered into this Note as of the date first above written.
DEBTOR: | HOLDER: |
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Axim Biotechnologies, Inc., | [________________________], |
a Nevada corporation | a [__________________] |
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By: |
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| Robert T. Malasek, CFO |
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CONVERTIBLE NOTE
$[FACE VALUE] | San Diego, California | Dated: February 10, 2022 |
FOR VALUE RECEIVED, the undersigned, Axim Biotechnologies, Inc., a Nevada corporation (“Debtor”), promises to pay to the order of [INVESTOR], [], or order (“Holder”), at the corporate offices of Holder, or such other place as Holder may designate in writing, the principal amount of [AMOUNT EQUAL TO FACE VALUE] and 00/100 Dollars ($_______), together with interest on the unpaid principal balance from time to time outstanding, computed on the basis of a three hundred sixty (360) day year and compounded on a yearly basis at a rate equal to Three Percent (3%) per annum (the “Interest Rate”).
1.Payment of Principal and Interest. From the date of this Convertible Note (the “Note” or “Convertible Note”), interest shall be payable annually beginning on February 10, 2023 until the maturity date of February 10, 2032, at which time all principal and interest accrued thereon shall be due and payable in United States currency.
2.Prepayment. Debtor shall not be permitted to prepay this Note, either in whole or in part, without the express written consent of Holder, which consent Holder may withhold in its sole and absolute discretion.
3.Conversion of Note.
(a)Any Holder of this Note has the right, at the Holder's option, at any time prior to payment in full of the principal balance of this Note, to convert this Note, in whole or in part, into fully paid and nonassessable shares of Debtor’s common stock ("Common Stock"). The number of shares of Common Stock into which this Note may be converted ("Conversion Shares") shall be determined by dividing the aggregate principal amount being tendered for conversion including interest accrued thereon (unless Holder elects to have the interest paid in cash) by the Conversion Price in effect at the time of such conversion. The Conversion Price shall be equal to the lesser of $0.08125 or 70% of the average of the two lowest closing prices of Debtor's common stock in the ten (10) trading days prior to any particular conversion.
Notwithstanding the foregoing, Holder shall not be permitted to convert the Note, or portion thereof, if such conversion would result in beneficial ownership by Holder and its affiliates of more than 4.9% of the Debtor’s outstanding Common Stock as of the date of conversion.
(b)If Holder desires to exercise its conversion rights under this Note it may do so by delivering a conversion notice in similar form and substance as the conversion notice attached hereto as “Attachment 1” at the Debtor’s principal corporate office.
(c)No fractional shares shall be issued upon conversion. The amount of shares to be issued upon conversion shall be rounded to the nearest whole share amount.
(d) As promptly as practicable after the conversion of this Note, the Debtor at its expense will issue and deliver to Holder of this Note a certificate or certificates for the number of shares of Common Stock issuable upon such conversion.
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4.Conversion Price Adjustments.
(a)In case at any time the Common Stock outstanding shall be combined into a lesser number of shares, whether by reclassification or reduction of capital stock, and whether referred to as a “reverse split” or otherwise (a “Share Reduction Event”), then the Conversion Price shall be proportionately increased by multiplying the Conversion Price immediately preceding a Share Reduction Event by the sum of (i) the number of shares of Common Stock outstanding immediately prior to a Share Reduction Event divided by (ii) the number of shares of Common Stock outstanding immediately following such Share Reduction Event.
(b) In case at any time any Common Stock shall be issued, or be deemed to have been issued, as a dividend on outstanding Common Stock or shall be issued upon subdivision, reclassification, recapitalization, whether referred to as a “stock split” or otherwise (a “Share Increase Event”), then the Conversion Price shall be proportionately decreased by multiplying the Conversion Price immediately preceding a Share Increase Event by the sum of (i) the number of shares of Common Stock outstanding immediately prior to a Share Increase Event divided by (ii) the number of shares of Common Stock outstanding immediately following such Share Increase Event.
5.Event of Default. Each of the following shall constitute an Event of Default under this Note:
(a) Debtor fails to make any payment when due on this Note or is in default on any other of its indebtedness that is evidenced by a promissory note (whether convertible or non-convertible) and either Debtor has not received a waiver of such default or the time to cure such default has lapsed.
(b)Upon any assignment by Debtor for the benefit of creditors, or filing by or against Debtor of a petition in bankruptcy, or adjudication of Debtor as bankrupt or insolvent, or filing by or against Debtor of any petition or answer seeking for Debtor any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, or filing any answer admitting or failing to deny the material allegations of a petition filed against it for any such relief, or seeking or consenting to or acquiescing in the appointment of any trustee, receiver or liquidator of itself or of all or any substantial part of its properties, or its directors or stockholders taking any action looking to its dissolution or liquidation.
6.Holder's Rights. Upon an Event of Default, Holder may declare the entire unpaid principal balance on this Convertible Note together with interest on any unpaid balance immediately due, without notice, and then Debtor will pay that amount.
If any Event of Default occurs, neither the failure of Holder to promptly exercise its right to declare the outstanding principal of and accrued and unpaid interest on this Convertible Note to be immediately due and payable, nor the failure of Holder to exercise any other right or remedy that it may have for default, nor the acceptance by Holder of late payments, nor the failure of Holder to demand strict performance of any obligation of Debtor hereunder, shall constitute a waiver of any such rights while such default continues, nor a waiver of such rights in connection with any future default on the part of Debtor. Furthermore, acceptance by Holder of partial payments following due acceleration of the indebtedness evidenced hereby shall not constitute a waiver by Holder of the acceleration of such indebtedness.
7.Sale, Assignment or Transfer of Note. The Holder of this Convertible Note may sell, assign, transfer, pledge or hypothecate this Note at any time in Holder’s sole and absolute discretion.
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8.Maximum Rate. All agreements which either are now or which shall become agreements between Debtor and Holder are expressly limited so that in no contingency or event whatever, whether by reason of deferment or advancement of the indebtedness represented by this Convertible Note, acceleration of the maturity date of this Convertible Note, or otherwise, shall the amount paid or agreed to be paid to Holder for the use, forbearance or detention of the indebtedness evidenced by this Convertible Note exceed the maximum amount of interest permissible under applicable law. If at any time, from any circumstance whatsoever, fulfillment of any provision of this Convertible Note or any other agreement between Debtor and Holder shall result in or involve payments or performance which would exceed the maximum legal interest rate, then ipso facto, the obligation to be fulfilled shall be reduced so as not to exceed such maximum legal interest rate.
9.Waiver. No delay or omission on the part of any holder hereof in exercising any right or option herein given to such holder shall impair such right or option to be considered as a waiver thereof or acquiescence in any default hereunder. Debtor hereby waives any applicable statute of limitations, presentment, demand for payment, protest and notice of dishonor.
10.Attorney’s Fees. In the event of any dispute, action, or other proceeding brought by either party against the other under this Convertible Note, the prevailing party shall be entitled to recover all costs and expenses incurred in connection with such dispute, action, or other proceeding, including, without limitation, the fees and costs of its attorneys, whether or not such dispute, action, or other proceeding proceeds to formal resolution or judgment.
11.Cumulative. Holder's rights and remedies under this Convertible Note and applicable law shall be cumulative and not in the alternative.
12.Governing Law and Venue. This Convertible Note is and shall be governed by and construed and enforced in accordance with the laws of the State of California without application of conflict of laws principles. Sole and proper venue and jurisdiction for any dispute arising out of or relating to this Convertible Note shall be San Diego County Superior Court in San Diego, California.
13.Successors. The provisions of this Convertible Note shall inure to the benefit of Holder's successors and assigns, and are binding on Debtor's successors.
14.Time of Essence. Time is of the essence under this Convertible Note.
15.Severability. Should any one or more of the provisions of this Note be determined to be illegal or unenforceable, such provision(s) shall (i) be modified to the minimum extent necessary to render it valid and enforceable, or (ii) if it cannot be so modified, be deemed not to be a part of this Note and shall not affect the validity or enforceability of the remaining provisions.
[Signature Page Follows]
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IN WITNESS WHEREOF the parties have entered into this Convertible Note as of the date first above written.
DEBTOR: | HOLDER: |
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Axim Biotechnologies, Inc., | [________________________], |
a Nevada corporation | a [__________________] |
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By: |
| By: |
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| John W. Huemoeller II, CEO |
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ATTACHMENT 1
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CONVERSION NOTICE
Axim Biotechnologies, Inc.. | Date: |
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Attn: John W. Huemoeller II, CEO
CONVERSION NOTICE
Holder hereby gives notice to Axim Biotechnologies, Inc., a Nevada corporation (the “Company”), pursuant to that certain Convertible Promissory Note, face value $[_________] dated February 10, 2022, made by the Company in favor of Holder (the “Note”), that Holder elects to convert the portion of the Note balance set forth below into fully paid and non-assessable shares of the Company’s regular common stock as of the date of conversion specified below. Said conversion shall be based on the Conversion Price set forth below.
A.Date of conversion: __________________________
B.Conversion Amount: _________________________
C.Conversion Price: ____________________________
D.Conversion Shares: ___________________________ (B divided by C)
E.Remaining Outstanding Balance of Note: $____________________ including interest accrued thereon of $_____________ as of the date of this Conversion Notice.
Sincerely,
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THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT”)
US $1,110,000.00
AXIM BIOTECHNOLOGIES, INC.
6% CONVERTIBLE REDEEMABLE NOTE
DUE SEPTEMBER 29, 2022
FOR VALUE RECEIVED, AXIM BIOTECHNOLOGIES, INC. (the “Company'') promises to pay to the order of GS CAPITAL PARTNERS, LLC and its authorized successors and permitted assigns (“Holder”), the aggregate principal face amount of One Million One Hundred Ten Thousand Dollars exactly (U.S. $1,110,000.00) on SEPTEMBER 29, 2022 (“Maturity Date”) and to pay interest on the principal amount outstanding hereunder at the rate of 6% per annum commencing on SEPTEMBER 29, 2021 (“Issuance Date”). This Note shall contain an original issue discount of $100,000.00 such that the purchase price is $1,010,000.00. The interest will be paid to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note are payable at 30 Washington Street, Suite 5L, Brooklyn, NY 11201, initially, and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.
This Note is subject to the following additional provisions:
1. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental charges payable in connection therewith.
2. The Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.
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3. This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (“Act”) and applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being converted (“Notice of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such Notice of Conversion shall be the Conversion Date.
4. (a) During the first 6 months this Note is in effect. the Holder of this Note is entitled, at its option, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock (the “Common Stock”) at a price (“Conversion Price”) for each share of Common Stock at fixed price of $1.00 per share. After the 6th monthly anniversary of the Issuance Date, the Conversion Price shall be equal to a fixed price of $0.25 per share. Provided, however that in the event, the Company's Common Stock trades below $0.25 per share for more than five (5) consecutive trading days, the Holder of this Note is entitled, at its option, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's Common Stock at a Conversion Price for each share of Common Stock equal to 70% of the average of the two lowest closing prices of the Common Stock as reported on the National Quotations Bureau OTC Marketplace exchange which the Company's shares are traded or any exchange upon which the Common Stock may be traded in the future (“Exchange”), for the ten prior trading days including the day upon which a Notice of Con version is received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax or other electronic method of communication to the Company or its transfer agent after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Accrued but unpaid interest as of the date of the Notice of Conversion shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. To the extent the Conversion Price of the Company's Common Stock closes below the par value per share, the Company will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Company agrees to honor all conversions submitted pending this increase. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of the Company's Common Stock beneficially owned by the Holder and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of the Company (which may be increased up to 9.9% upon 60 days' prior written notice by the Investor). The conversion discount, look back period and other terms will be adjusted on a ratchet basis if the Company offers a more favorable conversion discount, prepayment rate, interest rate, (whether through a straight discount or in combination with an original issue discount), look back period or other more favorable term to another party for any financings while this Note is in effect, including but not limited to defaults, penalties and the remedy for such defaults or penalties.
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(b) Interest on any unpaid principal balance of this Note shall be paid at the rate of six (6%) percent per annum. Interest shall be paid by the Company in Common Stock (“Interest Shares”). Holder may, at any time, send in a Notice of Conversion to the Company for Interest Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.
(c) The Notes may be prepaid or assigned with the following penalties/premiums:
PREPAY DATE | PREPAY AMOUNT |
≤ 60 days | 105% of principal plus accrued interest |
61 - 120 days | 112% of principal plus accrued interest |
121 - 180 days | 119% of principal plus accrued interest |
This Note may not be prepaid after the 180th day. Such redemption must be closed and funded within 3 days of giving notice of redemption of the right to redeem shall be null and void. Any partial prepayments will be made in accordance with the formula set forth in the chart above with respect to principal, premium and interest.
(d) Upon (i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related transactions, (ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock, other than a forward or reverse stock split or stock dividend, or (iii) any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a “Sale Event”), then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.
(e) In case of any Sale Event (not to include a sale of all or substantially all of the Company's assets) in connection with which this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.
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5. No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.
6. The Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.
7. The Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder in collecting any amount due under this Note.
8. If one or more of the following described “Events of Default” shall occur:
(a) The Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company. The Holder shall notify the Company of default in payment or interest in writing (the “Notice of Default”) and the Company shall have a cure period of five (5) business days from the date the Notice of Default to pay the amount indicated in the Notice of Default;
(b) Any of the representations or warranties made by the Company herein or in any certificate or financial or other written statements heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or the Securities Purchase Agreement under which this note was issued shall be false or misleading in any respect; or
(c) The Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under this Note or any other note issued to the Holder; or
(d) The Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief, consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable; or
(e) A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or
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(f) Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company; or
(g) One or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or
(h) The Company shall have defaulted on or breached any term of any other purchase agreement or note or similar debt instrument into which the Company has entered and failed to cure such default within the appropriate grace period; or
(i) The Company shall have its Common Stock delisted from an exchange (including the OTC Market exchange) or, if the Common Stock trades on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934 act reports with the SEC;
(j) If a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;
(k) The Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days of its receipt of a Notice of Conversion; or
(l) The Company shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder.
(m) The Company shall not be “current” in its filings with the Securities and Exchange Commission; or
(n) The Company shall lose the “bid” price for its stock and a market (including the OTC marketplace or other exchange)
Then, or at any time thereafter, unless cured within 5 days, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event of Default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of
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interest permitted by law. In the event of a breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning on the 4th day after the conversion notice was delivered to the Company. This penalty shall increase to $500 per day beginning on the 10th day. In an event of a breach of Section 8(h) the Holder may elect to utilize the same remedy available under the defaulted interest and such remedy shall be incorporated by reference into the terms of this Note. The penalty for a breach of Section 8(n) shall be an increase of the outstanding principal amounts by 20%. Further, if a breach of Section 8(m) occurs or is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. For example, if the lowest closing bid price during the delinquency period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future conversions at $0.005 per share.
If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Company for its attorneys' fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
The Company must pay the Failure to Deliver Loss by cash payment, and any such cash payment must be made by the third business day from the time of the Holder's written notice to the Company
9. In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.
10. Neither this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.
11. The Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information indicating it is no longer a “shell” issuer. Further, the Company will instruct its counsel to either (i) write a 144 opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder's counsel.
12. The Company shall issue irrevocable transfer agent instructions reserving 4,911,500 shares of its Common Stock for conversions under this Note (the “Share Reserve”). Upon full conversion of this Note, any shares remaining in the Share Reserve shall be cancelled. The Company shall pay all transfer agent costs and legal fees associated with issuing and delivering the shares to the Holder. If such amounts are to be paid by the Holder, it may deduct such amounts from the principal amounts being converted. The Company should at all times reserve an amount a minimum of two and a half times the amount of shares required if the note would be fully converted. The Holder may reasonably request increases from time to time to reserve such amounts. The Company will instruct its transfer agent to provide the outstanding share information to the Holder in connection with its conversions.
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13. The Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations etc. This notice shall be given to the Holder as soon as possible under law.
14. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage of any law that would prohibit or forgive the Company from paying all or a portion of the principal or interest on this Note.
15. This Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York or in the Federal courts sitting in the county or city of New York, or the Federal courts within the districts of New York. This Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective as an original.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized.
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| AXIM BIOTECHNOLOGIES, INC. | |
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| By : |
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| John W. Huemoeller II |
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| President and Chief Executive Officer |
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EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Note)
The undersigned hereby irrevocably elects to convert $ of the above Note into Shares of Common Stock of AXIM BIOTECHNOLOGIES, INC. (“Shares”) according to the conditions set forth in such Note, as of the date written below.
If Shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with respect thereto.
Date of Conversion: |
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Applicable Conversion Price: |
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[Print Name of Holder and Title of Signer]
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Shares are to be registered in the following name: |
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Shares are to be sent or delivered to the following account:
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FIRST AMENDMENT TO CONVERTIBLE PROMISSORY NOTE
For good and valuable consideration AXIM BIOTECHNOLIGIES, INC., a Nevada corporation, (the “Company”), and GS CAPITAL PARTNERS, LLC (the “Holder”) hereby agree that certain provisions of the Convertible Promissory Note issued from the Company in the amount of $1,110,000.00 on OCTOBER 12, 2021 (the “Note”) are being amended as set forth in this agreement (“Agreement”):
1.The Maturity Date of the Note is hereby extended by a period equal to the later of (i) six (6) months from the date of this Agreement or (ii) if the Maturity Date would otherwise have been reached within 6 months of the date of this Agreement, the six (6) months from such Maturity Date. During this period the Holder waives any penalty interest that would otherwise have occurred due to the failure to timely repay the Note on or prior to the original maturity date.
2.This Agreement, and the Note, are governed by and construed in accordance with the laws of Nevada applicable to contracts made and wholly to be performed within the State of Nevada and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of Nevada or in the Federal courts sitting in the counties of either Washoe County, Nevada or Clark County, Nevada.
3.All capitalized terms not defined herein shall have the meaning defined to them in the Note.
All other terms of the Note not modified by the terms of this Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, this Agreement has been executed effective October 29, 2021.
“Company”:
AXIM BIOTECHNOLOGIES, INC.
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Its: | CEO |
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Print Name: John W. John W. Huemoeller II
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“Holder”:
GS CAPITAL FUND, LLC
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Gabe Sayegh, Manager |
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