Item 1.01 Entry into a Material Definitive Agreement.
On April 24, 2023, NovAccess Global Inc. ("NovAccess" or the "company") entered
into a securities purchase agreement (the "SPA") with 1800 Diagonal Lending LLC
("1800 Diagonal Lending") and issued a convertible promissory note in the
original principal amount of $54,250 (the "note") to 1800 Diagonal Lending
pursuant to the SPA. The loan funded on April 28, 2023. NovAccess will use the
proceeds of the loan for general working capital purposes.
NovAccess provided typical representations and agreed to standard covenants
pursuant to the SPA. The SPA does not include any financial covenants.
The note bears interest at 8% a year and is due on April 24, 2024. NovAccess may
prepay the note upon payment of a prepayment penalty ranging from 15-25% of the
amount outstanding on the note when prepaid. Under the terms of the note,
NovAccess may not sell a significant portion of its assets without the approval
of 1800 Diagonal Lending, must comply with the company's reporting requirements
under the Securities Exchange Act of 1934, and must maintain the listing of the
company's common stock on the OTCQB Market or other exchange. NovAccess' failure
to comply with any of these covenants, among other matters, would constitute an
event of default. Upon an event of default, the note will bear interest at 22%
and 1800 Diagonal Lending will be entitled to its costs of collection.
Beginning on October 21, 2023, 1800 Diagonal Lending may convert the amount
outstanding under the note into shares of NovAccess common stock at a conversion
price equal to 65% of the average of the three lowest trading prices of the
stock during the fifteen trading days before the conversion date.
The SPA and note are filed as exhibits to this Current Report on Form 8-K. The
descriptions above are qualified in their entirety by reference to the full text
of these documents.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure included under Item 1.01 above is incorporated by reference to
this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure included under Item 1.01 above is incorporated by reference to
this Item 3.02. The issuances of the note to 1800 Diagonal Lending was exempt
from registration under Section 4(a)(2) of the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 Securities Purchase Agreement dated April 24, 2023 between
NovAccess Global Inc. and 1800 Diagonal Lending LLC
Exhibit 10.2 Convertible Promissory Note dated April 24, 2023 in the original
principal amount of $54,250 issued by NovAccess Global Inc. to 1800 Diagonal
Lending LLC
Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL)
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses