Item 1.01
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Entry into a Material Definitive Agreement
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Sale and Issuance of Bridge Notes
On March 18, 2019 (the “First Power Up Issuance Date”), True Nature Holding, Inc., a Delaware corporation (the “Company”) entered into a Securities Purchase Agreement (the “First Power Up SPA”) with Power Up Lending Group Ltd., a Virginia corporation (“Power Up”), pursuant to which Power Up agreed to purchase a Convertible Promissory Note (the “First Power Up Note”) in the principal amount of $43,000.00 (the “First Power Up Loan”). On or about March 18, 2019, the Company received an aggregate of approximately $40,000.00 in net proceeds in exchange for the sale of the First Power Up Note to Power Up.
The First Power Up Note entitles Power Up to 12% interest per annum and matures on January 30, 2020. In the event the Company prepays the First Power Up Note beginning on the First Power Up Issuance Date through the 180th day following the First Power Up Issuance Date, the Company must pay Power Up all of the outstanding principal and interest due plus a cash redemption premium ranging from 115% to 140%. After the 180th day following the First Power Up Issuance Date, there is no further right of prepayment by the Company.
Power Up has no right of conversion under the First Power Up Note for a period of 180 days commencing on the First Power Up Issuance Date. In the event the Company has not paid the First Power Up Loan in full prior to 180 days from the First Power Up Issuance Date, Power Up may convert all or a portion of the outstanding principal of the First Power Up Note into shares of the Company’s common stock (the “Common Stock”) at a price per share equal to 61% of the lowest closing price of the Common Stock during the 20 trading day period ending on the last complete trading day prior to the date of conversion. Power Up may not convert the First 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 issued and outstanding Common Stock.
The First Power Up Note contains certain representations, warranties, covenants and events of default including if the Common Stock is suspended or delisted for trading on the OTC marketplace or if the Company is delinquent in its periodic report filings with the SEC. In the event of default, at the option of Power Up, it may consider the First Power Up Note immediately due and payable.
On March 27, 2019 (the “Second Power Up Issuance Date”), the Company entered into a Securities Purchase Agreement (the “Second Power Up SPA”) with Power Up, pursuant to which Power Up agreed to purchase a Convertible Promissory Note (the “Second Power Up Note”) in the principal amount of $53,000.00 (the “Second Power Up Loan”). On or about March 27, 2019, the Company received an aggregate of approximately $50,000.00 in net proceeds in exchange for the sale of the Second Power Up Note to Power Up.
The Second Power Up Note entitles Power Up to 12% interest per annum and matures on January 30, 2020. In the event the Company prepays the Second Power Up Note beginning on the Second Power Up Issuance Date through the 180th day following the Second Power Up Issuance Date, the Company must pay Power Up all of the outstanding principal and interest due plus a cash redemption premium ranging from 115% to 140%. After the 180th day following the Second Power Up Issuance Date, there is no further right of prepayment by the Company.
Power Up has no right of conversion under the Second Power Up Note for a period of 180 days commencing on the Second Power Up Issuance Date. In the event the Company has not paid the Second Power Up Loan in full prior to 180 days from the Second Power Up Issuance Date, Power Up may convert all or a portion of the outstanding principal of the Second Power Up Note into shares of the Company’s common stock (the “Common Stock”) at a price per share equal to 61% of the lowest closing price of the Common Stock during the 20 trading day period ending on the last complete trading day prior to the date of conversion. Power Up may not convert the Second 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 issued and outstanding Common Stock.
The Second Power Up Note contains certain representations, warranties, covenants and events of default including if the Common Stock is suspended or delisted for trading on the OTC marketplace or if the Company is delinquent in its periodic report filings with the SEC. In the event of default, at the option of Power Up, it may consider the Second Power Up Note immediately due and payable.
Item 1.01 of this Current Report on Form 8-K contains only a brief description of the material terms of the First Power Up Note, the Second Power Up Note, the First Power Up SPA, and the Second Power Up SPA, and does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are qualified in their entirety by reference to the full text of the First Power Up Note, the Second Power Up Note, the First Power Up SPA, and the Second Power Up SPA, filed as Exhibits 4.1, 4.2, 10.1, and 10.2, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference.