8-K
Mitesco, Inc. (MITI)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 29, 2022
MITESCO, INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 000-53601 | 87-0496850 |
|---|---|---|
| (State or other jurisdiction of<br> <br>incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| 1600 Highway 100 South, Suite 432<br> <br>St. Louis Park, MN 55416 | ||
| --- | ||
| (Address of principal executive offices) (Zip Code) |
(844) 383-8689
(Registrant's telephone number, including area code)
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:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| N/A | N/A | N/A |
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. |
|---|
Mitesco, Inc. (the “Company”) engaged in a number of bridge financing transactions with both new and historical investors.
Issuance of Promissory Notes
The Company issued the following eight promissory notes:
| (1) | Mercer promissory note (the “Mercer Note”) dated December 2, 2022, to Mercer Street Global Opportunity Fund, LLC (“Mercer”) of which the Company received proceeds of $100,000. The maturity date of the Mercer Note is May 21, 2023; and |
|---|---|
| (2) | Diamond promissory note (the “Diamond Note”) dated November 29, 2022, to Lawrence Diamond (“Diamond”) of which the Company received proceeds of $15,000. The maturity date of the Diamond Note is May 28, 2023. Lawrence Diamond is the Chief Executive Officer of the Company; and |
| --- | --- |
| (3) | Howe promissory note (the “Howe Note”) dated November 29, 2022, to Michael C. Howe Living Trust (“Howe”) of which the Company received proceeds of $15,000. The maturity date of the Howe Note is May 28, 2023. Howe is the CEO of the Good Clinic, LLC; and |
| --- | --- |
| (4) | Lindstrom promissory note (the “Lindstrom Note”) dated November 29, 2022, to Ingrid Jenny Lindstrom (“Lindstrom”) of which the Company received proceeds of $15,000. The maturity date of the Lindstrom Note is May 28, 2023. Lindstrom is Chief Legal Officer of the Company; and |
| --- | --- |
| (5) | Iturregui promissory note (the “Iturregui Note”) dated November 29, 2022, to Juan Carlos Iturregui (“Iturregui”) of which the Company received proceeds of $15,000. The maturity date of the Iturregui Note is May 28, 2023. Iturregui serves on the Board of Directors of the Company; and |
| --- | --- |
| (6) | Naqvi promissory note (the “Naqvi Note”) dated Novemebr 29, 2022, to Faraz Naqvi (“Naqvi”) of which the Company received proceeds of $15,000. The maturity date of the Naqvi Note is May 28, 2023. Naqvi serves on the Board of Directors of the Company; and |
| --- | --- |
| (7) | Schweitzer promissory note (the “Schweitzer Note”) dated November 29, 2022, to Sheila Schweitzer (“Schweitzer”) of which the Company received proceeds of $15,000. The maturity date of the Schweitzer Note is May 28, 2023. Schweitzer serves on the Board of Directors of the Company; and |
| --- | --- |
| (8) | Brodmerkel promissory note (the “Brodmerkel Note”, together with the Mercer Note, Diamond Note, Howe Note, Lindstrom Note, Iturregui Note, Naqvi Note and Schweitzer Note, the “Notes”) dated November 29, 2022, to Thomas Brodmerkel (“Brodmerkel”, together with Mercer, Diamond, Howe, Lindstrom, Iturregui, Naqvi and Schweitzer, the “Lenders” and Brodmerkel together with Diamond, Howe, Lindstrom, Iturregui, Naqvi and Schweitzer, collectively the “Officer and Director Lenders”) of which the Company received proceeds of $15,000. The maturity date of the Brodmerkel Note is May 28, 2023. Brodmerkel is the Chair of the Board of Directors of the Company. |
| --- | --- |
The Principal Amount of the Notes shall convert into the Series E Shares in accordance with the terms of the Exchange Agreements entered into between the Company and the Lenders, if the Company successfully lists its common stock on a national securities exchange on or before May 10, 2023.
If the Principal Amount is not converted into Series E Shares, the Notes shall bear interest at 10% interest rate per annum, accrued monthly and payable at maturity.
The aggregate amount payable at maturity will be $256,250 plus any unpaid and accrued interest. Following an event of default, as defined in the Notes, the principal amount shall bear interest for each day until paid, at a rate per annum equal to the lesser of the maximum interest permitted by applicable law and 18%.
The Notes contain a “most favored nations” clause that provides that, so long as the Notes are outstanding, if the Company issues any new security, which the Lenders reasonably believe contains a term that is more favorable than those in the Notes, the Company shall notify the Lenders of such term, and such term, at the option of the Lenders, shall become a part of the Notes. The Lenders will also be issued in the aggregate 512,500 warrants (the “Warrants”), which shall be exercisable on substantially the same terms as the Series A warrant issued in connection with the Company’s Series D Convertible Preferred Stock, but priced at the same price as any warrant included in an offering in conjunction with listing at the Nasdaq Capital Market.
Exchange Agreements
In connection with the Notes above, the Company entered into separate exchange agreements with each of the Officer and Director Lenders (the “Officer and Director Exchange Agreements”). Mercer entered into an Exchange Agreement with the Company which was disclosed on the current report on Form 8-K, filed with the SEC on October 12, 2022 (“Mercer Exchange Agreement” the Officer and Director Exchange Agreements and the Mercer Exchange Agreement are collectively referred to as the “Exchange Agreements”).
Pursuant to the Exchange Agreements, the Lenders shall exchange (the “Exchange”) the Notes for a number Series E Convertible Preferred Stock (the “Series E Shares”) equal to 150% of the principal amount of the Notes (the "Series E Exchange Value").
The Exchange shall occur on the date of the Company’s listing of its common stock on a national securities exchange. The Lenders shall surrender to the Company the Notes. Upon such surrender, the Company shall issue to each of the Lenders a number of Series E Shares equal to the Series E Exchange Value.
This summary is not a complete description of all of the terms of the Exchange Agreements and the Notes and is qualified in its entirety by reference to the full text of the Exchange Agreements and the Notes, forms of which are filed as Exhibit 4.1 and 10.1 respectively hereto, which is incorporated by reference into this Item 1.01.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
|---|
To the extent required by this Item 2.03, the information contained in Item 1.01 is incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
|---|
To the extent required by this Item 3.02, the information contained in Item 1.01 is incorporated herein by reference.
| Item 3.03. | Material Modification to Rights of Security Holders. |
|---|
To the extent required by this Item 3.03, the information contained in Item 1.01 is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 4.1* | Form Promissory Note in the principal amount of $15,000 dated November 29, 2022 |
| 10.1* | Form Exchange Agreement for Lawrence Diamond, dated November 29, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| * | Filed herewith. |
| --- | --- |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: December 5, 2022 | MITESCO, INC. | |
|---|---|---|
| By: | /s/ Lawrence Diamond | |
| Lawrence Diamond | ||
| Chief Executive Officer |
ex_452900.htm
Exhibit 4.1
| Principal Amount of US18,750.00 |
|---|
| Purchase Price of US15,000.00 |
All values are in US Dollars.
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, MITESCO, INC., a corporation incorporated under the laws of the State of Delaware (the “Borrower”), hereby promises to pay to the order of _______________ (the “Lender” and collectively with the Borrower, the “Parties”) on the Termination Date (as defined below), the principal amount of eighteen thousand seven hundred and fifty dollars and zero/100 United States Dollars (US$18,750.00) (the “Principal Amount”). The purchase price for this promissory note (this “Note”) shall be fifteen thousand United States Dollars (US$15,000.00) (the “Purchase Price”) and shall be payable by the Lender to the Borrower on the Issue Date.
VERY SPECULATIVE AND HIGHLY RISKY INVESTMENT. Investing in this convertible Promissory Note is highly speculative and is suitable only for those who (a) understand and are willing to assume the economic, legal and other risks involved, and (b) are financially able to assume significant losses. Lender represents, warrants and agrees that Lender understands these risks; that Lender is willing and able, financially and otherwise, to assume the risks of this Note and that loss of Lender’s entire Principal Amount will not change your lifestyle. Before deciding to invest in this Note Lender should carefully consider Lender’s investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your Principal Amount and therefore you should not invest money that you cannot afford to lose.
Section 1*. Certain Terms Defined.* **** The following terms for all purposes of this Promissory Note shall have the respective meanings specified below.
“Business Day” means any day except a Saturday, Sunday, or other day on which commercial banks in New York, New York are authorized by law to close.
“Default” means any event which, with the giving of notice, lapse of time, determination of materiality or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an Event of Default.
“Event of Default” has the meaning given to it in Section 12.
“Exchange Agreement” means that certain Exchange Agreement, dated as of November 29, 2022, between the Borrower and the Lender.
“GAAP” means generally accepted accounting principles in the United States, in effect from time to time, consistently applied.
“Material Adverse Effect” means a material adverse effect on (a) the business, operations, prospects, condition (financial or otherwise) or property of the Borrower, (b) the validity or enforceability of any provision of any Transaction Document, (c) the ability of any party to any Transaction Document to timely perform its obligations thereunder, or (d) the rights and remedies of the Lender under any Transaction Document.
“Termination Date” means the maturity date as defined in Section 2.
“Transaction Documents” means this Promissory Note.
Section 2*. Purchase Price.* The Lender shall pay the Purchase Price to the Borrower on the Issue Date.
Section 3*. Maturity of this Promissory Note.* This Principal Amount of this Note will be due and payable on May 28, 2022 (“Maturity Date”), unless the Parties have mutually agreed upon terms upon which the Maturity Date may be extended or the Principal Amount shall otherwise be converted.
Section 4*. Conversion of the Principal Amount.* The Principal Amount shall convert into Series E Convertible Preferred Stock (the “Series E Shares”) in accordance with the terms of the Exchange Agreement, if the Borrower successfully lists its shares of common stock on any of the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market on or before May 10, 2022.
Section 5Interest Payments. If and only if the Principal Amount is not converted into Series E Shares pursuant to Section 4 above, the unpaid Principal Amount shall bear interest at ten percent (10%) per annum (the “Interest Rate”), which interest shall be accrued on a monthly basis and which shall have been deemed to have been accruing from the Issue Date.
Notwithstanding the foregoing, following an Event of Default, the Principal Amount shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the lesser of (i) the maximum interest rate permitted by applicable law and (ii) eighteen percent (18%) (the “Default Rate”).
Interest shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).
Section 6Warrants. As further consideration for the Purchase Price payable hereunder, promptly following an uplist to the Nasdaq Global Market, the Borrower shall issue to the Lender a common stock purchase warrants, entitling the Lender to purchase 37,500 shares (to be adjusted post reverse split of the Company’s stock) of the Borrower’s common stock on substantially the same terms as the Series A warrant issued in connection with the Borrower’s Series D Convertible Preferred Stock, but priced at the same price as any warrant included in an offering in conjunction with listing at the Nasdaq Global Market.
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Section 7Optional Prepayments. The Borrower may prepay the amounts owing under this Promissory Note in whole or in part at any time after May 10, 2022, without penalty by paying the Principal Amount together with interest accrued thereon and any other amount which may be outstanding to the date of prepayment.
Section 8*. General Provisions As To Payments.* All payments owing under this Promissory Note by the Borrower hereunder shall be made not later than 12:00 Noon (New York City time) on the date when due by cashier’s check or by wire transfer of immediately available funds to the Lender’s account at a bank specified by the Lender in writing to the Borrower without reduction by reason of any set-off or counterclaim. In the event that any required payment date is not a Business Day, then said payment date shall be the next succeeding Business Day.
Section 9. Representations and Warranties of the Borrower. The Borrower represents and warrants to the Lender that:
| a. | it is duly organized, validly existing and in good standing under the laws of the state of its incorporation; |
|---|---|
| b. | it is duly authorized to do business in all jurisdictions material to the conduct of its business; |
| --- | --- |
| c. | it has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its obligations under this Promissory Note and to conduct its business substantially as currently conducted by it; |
| --- | --- |
| d. | the execution, delivery and performance of this Promissory Note are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate action; |
| --- | --- |
| e. | this Promissory Note has been duly executed by an authorized officer of the Borrower and constitutes a legal, valid and binding obligation enforceable against the Borrower; |
| --- | --- |
| f. | this Promissory Note does not violate any of the Borrower’s organizational documents, any law, court order or material agreement by which the Borrower is bound; and |
| --- | --- |
| g. | the Borrower’s performance under this Promissory Note is not threatened by any pending or threatened litigation. |
| --- | --- |
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Section 10. Affirmative Covenants. Unless the Lender shall otherwise agree, the Borrower shall:
| a. | (i) maintain its corporate existence and qualify and remain qualified to conduct business as currently conducted; (ii) maintain all approvals necessary for this Promissory Note and the Transaction Documents; and (iii) operate its business with due diligence, efficiency and in conformity with sound business practices; |
|---|---|
| b. | keep its properties and business insured with financially sound and reputable insurers against loss or damage in such manner and to the same extent as shall be no less than that generally accepted as customary in regard to property and business of like character; |
| --- | --- |
| c. | comply in all material respects with all applicable laws, rules, regulations and orders of any government authority; |
| --- | --- |
| d. | maintain records, books, management information systems and financial control procedures which together are adequate to: (i) support the accounting practices and tax elections of the Borrower; and (ii) accurately, adequately and fairly reflect the financial condition of the Borrower and the results of its operations in conformity with GAAP; |
| --- | --- |
| e. | pay and discharge all taxes, assessments and governmental charges upon it, its income and its properties prior to the date on which penalties are attached thereto, unless and only to the extent that (i) such taxes, assessments and governmental charges shall be contested in good faith and by appropriate proceedings by the Borrower, (ii) reserves which are adequate under GAAP are maintained by the Borrower with respect thereto, and (iii) any failure to pay and discharge such taxes, assessments and governmental charges would not have and could not reasonably be expected to have a Material Adverse Effect; |
| --- | --- |
| f. | promptly inform the Lender, in writing, of any proposed material change in the nature or scope of the business or operations of the Borrower, or any event or condition which has or could reasonably be expected to have a Material Adverse Effect; |
| --- | --- |
| g. | comply with the requirements of all applicable laws, rules, regulations, and orders of any government authority, a breach of which would or would reasonably be expected to result in a Material Adverse Effect; |
| --- | --- |
| h. | obtain, make and keep in full force and effect all licenses, contracts, consents, approvals and authorizations from and registrations with government authorities that may be required to conduct its business, to maintain compliance with all applicable laws and regulations, and remit monies payable pursuant to this Promissory Note; |
| --- | --- |
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| i. | promptly notify the Lender of the occurrence of (i) any Default or Event of Default; (ii) any event, development or circumstance whereby the Borrower’s financial statements fail in any material respect to present fairly and accurately, in accordance with GAAP, the financial condition and operating results of the Borrower as of the date of such financial statements; (iii) any material litigation or proceedings that are instituted or, to the knowledge of the Borrower, threatened against the Borrower or any of their respective assets; (iv) each and every event which, at the giving of notice, lapse of time, determination of materiality or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an event of default (however described) under either of the Transaction Documents; and (v) any other development in the business or affairs of the Borrower if the effect thereof might have a Material Adverse Effect; |
|---|---|
| j. | comply with the Transaction Documents or any other document executed in connection with the transactions contemplated hereby; |
| --- | --- |
| k. | inform the Lender, as soon as they are made, of any judicial or non-judicial claims against the Borrower of more than $25,000 or the equivalent thereof in any other currency for each claim; and |
| --- | --- |
| l. | execute such other and further documents and instruments as the Lender may reasonably request to implement the provisions of this Promissory Note. |
| --- | --- |
Section 11. Negative Covenants. Unless the Lender shall otherwise agree, the Borrower shall not:
| a. | make any change to the scope or nature of its respective business activities as carried on at the date hereof or undertake any operations not permitted by the Transaction Documents; |
|---|---|
| b. | (i) violate any laws, ordinances, government rules or regulations to which it is subject or (ii) fail to obtain or maintain any patents, trademarks, service marks, trade names, copyrights, design patents, licenses, permits, franchises, or other governmental authorizations necessary to ownership of its property or the conduct of its respective business, in either case where such failure would have or could reasonably be expected to have a Material Adverse Effect; and |
| --- | --- |
| c. | assign or otherwise transfer, terminate, waive, or amend either of the Transaction Documents without the prior consent of the Lender, except for amendment in the ordinary course of business. |
| --- | --- |
Section 12*. Events Of Default.* Each of the following events shall constitute an “Event of Default”:
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| a. | the amounts owing under this Promissory Note shall not be paid within five (5) Business Days of the date that such amount was due; |
|---|---|
| b. | any warranty, representation or statement by the Borrower is or becomes false, misleading or incorrect in a material respect when made or regarded as made by the Borrower under this Promissory Note or the Transaction Documents; |
| --- | --- |
| c. | the Borrower fails to perform or observe any material undertaking, obligation or agreement expressed or implied in this Promissory Note or the Transaction Documents and such default is not cured within ten (10) days, or such longer period as is determined by the Lender, after receipt by the Borrower of a notice from the Lender specifying the failure; |
| --- | --- |
| d. | a receiver, receiver and manager, official manager, trustee, administrator or similar official is appointed, or steps are taken for such appointment, over any of the assets or undertaking of the Borrower; |
| --- | --- |
| e. | the Borrower is, or becomes, unable to pay its debts when they are due or is, or becomes, unable to pay its debts within the meaning of the US Bankruptcy Code or is presumed to be insolvent under the US Bankruptcy Code; |
| --- | --- |
| f. | an application or order is made for the winding up or dissolution of the Borrower, which application or order is not dismissed or withdrawn within twenty on (21) days, or a resolution is passed or any steps are taken to pass a resolution for the winding up or dissolution of the Borrower otherwise than for the purpose of an amalgamation or reconstruction which has the prior written consent of the Lender; or |
| --- | --- |
| g. | the Borrower suspends payment of its debts generally. |
| --- | --- |
If an Event of Default described above shall occur, the amounts owing under this Promissory Note shall become due and payable within ten (10) days of the Lender’s issuance of a formal demand notice to the Borrower. Immediately upon the occurrence of any Event of Default described above, or upon failure to pay this Promissory Note on the Termination Date, the Lender, without any notice to the Borrower, which notice is expressly waived by the Borrower, may proceed to protect, enforce, exercise and pursue any and all rights and remedies available to the Lender under this Promissory Note and any other agreement or instrument, and any and all rights and remedies available to the Lender at law or in equity.
All sums paid or advanced by the Lender in connection with the foregoing and all out-of-pocket costs and reasonable expenses (including, with limitation, reasonable attorneys’ fees, and expenses) incurred in connection therewith, together with interest thereon at the Default Rate from the date of payment until repaid in full, shall be paid by the Borrower to the Lender on demand and shall constitute and become a part of the obligations of the Borrower secured hereby.
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Section 13*. Further Assurances*. The Borrower hereby agrees that, from time to time upon the written request of the Lender, the Borrower will execute and deliver such further documents and do such other acts and things as the Lender may reasonably request in order to fully effect the purposes of this Promissory Note and to protect and preserve the priority and validity of the security interests granted hereunder.
Section 14*. Powers And Remedies Cumulative; Delay Or Omission Not Waiver Of Event Of Default.* No right or remedy herein conferred upon or reserved to the Lender is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
No delay or omission of the Lender to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any Event of Default or an acquiescence therein; and every power and remedy given by this Promissory Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by the Lender.
Section 15*. Transfers.* The Parties may not transfer or assign this Promissory Note nor any right or obligation hereunder to any person or entity without the prior written consent of the other Party.
Section 16*. Modification.* This Promissory Note may be modified only with the written consent of both the Borrower and the Lender.
Section 17Notices. Each notice authorized or required to be given to a party shall be in writing and may be delivered personally or sent by properly addressed prepaid mail in each case addressed to the party at its address set out in below:
In the case of the Lender:
In the case of the Borrower:
Mitesco, Inc.
1660 Highway 100 South
Suite 432
St. Louis Park, MN 55416
Attention: Jenny Lindstrom, Chief Legal Officer
Section 18Most Favored Nations. So long as this Promissory Note is outstanding, upon any issuance by the Company or any of its subsidiaries of any new security, with any term that the Lender, reasonably believe is more favorable to the holder of such security or with a term in favor of the holder of such security which Lender reasonably believes was not similarly
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provided to the Lender in the Warrants, (i) the Company shall notify the Lender of such additional or more favorable term within one (1) business day of the issuance or amendment (as applicable) of the respective security, and (ii) such term, at the option of the Lender, shall become a part of the Transaction Documents (regardless of whether the Company complied with the notification provision of this Section).
Section 19Miscellaneous. This Promissory Note shall be deemed to be a contract under the laws of the State of Nevada, and for all purposes shall be construed in accordance with the laws of said state. The parties hereto hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, and enforcement of or any default under this Promissory Note, except as specifically provided herein, and assent to extensions of the time of payment, or forbearance or other indulgence without notice. The Section headings herein are for convenience only and shall not affect the construction hereof. Any provision of this Promissory Note which is illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity, prohibition or unenforceability without invalidating or impairing the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. This Promissory Note shall bind the Borrower and his or her heirs, administrators, executors, personal representatives and permitted assigns. The rights under and benefits of this Promissory Note shall inure to the Lender and its permitted successors and assigns. This Promissory Note may be executed in any number of counterparts, each of which when executed and delivered to the other parties shall constitute an original, but all counterparts together shall constitute one and the same Promissory Note.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Borrower has caused this instrument to be duly executed on the date indicated below.
Date: November 29, 2022
MITESCO, INC.
By:
Name:
Title:
ex_452901.htm
Exhibit 10.1
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT, is dated as of November 29, 2022 (this “Agreement”), by and among Mitesco, Inc., a Delaware corporation (the “Company”), and INVESTOR, an individual corporation (the “Holder”).
WHEREAS, the Holder is the holder of (a) a Promissory Note dated November 29, 2022 for the Principal Amount of $18,750 (“November 29 Promissory Note”);
WHEREAS, the Company expects to list its Common Stock on a national securities exchange (the “Uplisting”) shortly following the date hereof and in connection therewith to conduct an offering of Common Stock and/or units consisting of Common Stock and warrants to purchase Common Stock (the “Uplisting Offering”); and
WHEREAS, pursuant to the terms of a Securities Purchase Agreement, dated on or about the date of the Uplisting (the “Series E SPA”), the Company is conducting an offering of shares of its Series E Convertible Preferred Stock (the “Series E Shares”) having the terms and provisions set forth in the form of Certificate of Designations, Preferences and Rights of the Series E Convertible Perpetual Preferred Stock of the Company, attached hereto as Exhibit A;
WHEREAS¸ the Holder has agreed to invest no less than $18,750 (in total) pursuant to the terms of a Promissory Note dated as of November 29, 2022 (the “November 29 Promissory Note”); and
WHEREAS, the exchange provided for hereby is being made in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
1. Exchange. Effective as of the date of the Uplisting (but immediately prior to the Uplisting), the Holder shall exchange the November 29 Promissory Note for a number of Series E Shares equal to the applicable Series E Exchange Value. The Holder shall exchange November 29 Promissory Note by surrendering them to the Company (the “Holder Deliveries”). Upon such surrender, the Company shall issue to the Holder the number of Series E Shares equal to the Series E Exchange Value. In connection with such exchange, the Company and the Holder agree that such Holder shall execute the Series E SPA, as a purchaser thereunder, and that the Holder’s surrender of the Holder Deliveries shall constitute such Holder’s payment of its Subscription Amount (as defined in the Series E SPA) under the Series E SPA. Upon the Uplisting and issuance of the Series E Shares to the Holder, the November 29 Promissory Note owned by the Holder shall be canceled on the books of the Company and all of such Holder’s rights with respect thereto shall automatically cease and terminate, and such Holder, by executing and becoming a party to this Agreement, shall be deemed to have consented to the cancellation of the Holder’s November 29 Promissory Note. For purposes of this Agreement, the “Series E Exchange Value” shall be an amount of Series E Shares equal to 150% of the Principal Amount (as defined in the November 29 Promissory Note). By way of example, if the Uplisting were to have occurred as of November 28,
2022, the Holder would have received $28,125 of Series E Shares (rounded up) as detailed on Schedule I.
2. Representations and Warranties of the Company. The Company hereby represents and warrants to the Holder that:
(a) the Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware;
(b) all corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement, and the performance of all obligations hereunder, have been taken on or prior to the date hereof. This Agreement has been validly authorized, executed and delivered by the Company, and constitutes the legal, valid and binding obligations of the Company, enforceable against them in accordance with their terms, except as such enforceability may be limited by general principles of equity or by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies; and
(c) the Series E Shares issued in accordance herewith and under the Series E SPA have been duly authorized and validly issued and are fully paid and non-assessable.
3. Representations and Warranties of the Holder. The Holder hereby represents and warrants to the Company that:
(a) Holder is a legal person duly organized, validly existing and in good standing under the laws of its jurisdiction of New York;
(b) all actions on the part of the Holder necessary for the authorization, execution and delivery of this Agreement, and the performance of all obligations hereunder, have been taken on or prior to the date hereof; this Agreement is validly authorized, executed and delivered by the Holder and constitutes the legal, valid and binding obligations of the Holder, enforceable against the Holder in accordance with its terms, except as such enforcement may be limited by general principles of equity or by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies;
(c) Holder is acquiring the Series E Shares for its own account only and not with view towards, or for sale in connection with, the public sale or distribution thereof;
(d) Holder is an “accredited investor” as that term is defined in Rule 501 of Regulation D, as promulgated under the Securities Act;
(e) Holder understands that the Series E Shares are being issued to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Holder’s compliance with, the representations, warranties, acknowledgements, and understandings of such Holder set forth herein in order to determine the availability of such exemptions and the eligibility of such Holder to acquire the Series E Shares;
(f) Holder and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and issuance of the Series E Shares; Holder has had the opportunity to review the Company’s filings with the Securities and Exchange Commission; Holder and its advisors, if any, have been afforded the opportunity to ask questions of the Company; neither such inquiries nor any other due diligence investigations conducted by Holder or its advisors, if any, or its representatives shall modify, amend or affect Holder’s right to rely on the Company’s representations and warranties contained herein; Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Series E Shares; Holder is relying solely on its own accounting, legal and tax advisors, and not on any statements of the Company or any of its agents or representatives, for such accounting, legal and tax advice with respect to its acquisition of the Series E Shares and the transactions contemplated by this Agreement;
(g) Holder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Series E Shares or the fairness or suitability of the investment nor have such authorities passed upon or endorsed the merits of the offering of the Series E Shares; and
(h) Holder understands and acknowledges that, upon its execution of this Agreement, any and all November 29 Promissory Note owned by it will be automatically cancelled, in each instance without further action on the part of the Company or Holder except as otherwise set forth herein, and Holder releases the Company from any and all obligations of the Company to Holder under the Promissory Note and Tranche 2 Commitment Shares owned by it; without limiting the generality of the preceding sentence, such Holder hereby surrenders and waives all rights that it has in respect of all of its Promissory Note, Tranche 2 Commitment Shares and the November 29 Promissory Note.
4. Miscellaneous.
(a) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Florida without giving effect to principles of conflicts of law.
(b) Entire Agreement. This Agreement and the Series E SPA contain the entire agreement between the parties regarding the subject matter hereof and supersedes all prior agreements or understandings between the parties with respect thereto.
(c) Successors. This Agreement will inure to the benefit of any successor in interest to a party or any person that after the date hereof may acquire any subsidiary or division of a party.
(d) Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, and all of which will constitute the same agreement.
[Signature Page(s) Follow this Page]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year set forth above.
MITESCO, INC.
By:
Name:
Title:
HOLDER:
INVESTOR
Signature:
EXHIBIT A
Form of Serie E Certificate of Designations
Schedule I
| Promissory Note | $18,750 |
|---|---|
| 50% Premium | $9,375 |
| Total | $28,125 |