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Item
1.01
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Entry into a Material Definitive Agreement.
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Power Up Financing
On December 5, 2018, NanoFlex Power Corporation, a Florida corporation
(the “Company”) entered into a Securities Purchase Agreement (the “Power Up SPA”) with Power Up Lending
Group Ltd. (“Power Up”) pursuant to which Power Up agreed to purchase a convertible promissory note (the “Power
Up Note”) in the aggregate principal amount of $53,000. On December 5, 2018, the Company issued the Power Up Note. The Power
Up Note entitles the holder to 12% interest per annum and matures on September 15, 2019.
Under the Power Up Note, Power Up may convert all or a portion of the
outstanding principal of the Power Up Note into shares of common stock, $0.0001 par value per share (the “Common Stock”)
of the Company beginning on the date which is 180 days from the issuance date of the Power Up Note, at a price equal to 61% of
the average of the lowest two trading prices during the 15 trading day period ending on the last complete trading date prior to
the date of conversion, provided, however, that Power Up may not convert the Power Up Note to the extent that such conversion would
result in beneficial ownership by Power Up and its affiliates of more than 4.99% of the Company’s issued and outstanding
Common Stock.
If the Company prepays the Power Up Note within 30 days of its issuance,
the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 31st day
and the 60th day after the issuance of the Power Up Note, then such redemption premium is 115%; if such prepayment is made from
the sixty first 61st to the 90th day after issuance, then such redemption premium is 120%; and if such prepayment is made from
the 91st to the 180th day after issuance, then such redemption premium is 125%. After the 180th day following the issuance of the
Power Up Note, there shall be no further right of prepayment.
In connection with the Power Up Note, the Company agreed to cause its
transfer agent to reserve 5,560,655 shares of Common Stock, in the event that the Power Up Note is converted. The closing occurred
on December 7, 2018, and the Company received a net amount of $44,700.
APG Capital Financing
On December 7, 2018, Company entered into a Securities Purchase Agreement
(the “APG Capital SPA”) with APG Capital Holdings, LLC (“APG Capital”) pursuant to which APG Capital agreed
to purchase a convertible promissory note (the “APG Capital Note”) in the aggregate principal amount of $40,000. The
Company agreed to reimburse APG Capital’s expenses of $2,000 in legal fees, to be deducted from the APG Capital Note when
funded. On December 7, 2018, the Company issued the APG Capital Note. The APG Capital Note has an interest rate of 12% per annum
and matures on December 7, 2019.
Pursuant to the APG Capital Note, during the first 180 days following
the issuance of the APG Capital Note, APG Capital may convert all or a portion of the outstanding principal amount into shares
of Common Stock at a fixed conversion price of $0.25 per share. After the 180th day following the issuance of the APG Capital Note,
the conversion price per share shall be equal to 40% discount of the lowest trading price or the lowest closing bid from closing
or conversion of the Common Stock during the 20 prior trading days (including the day upon which a notice of conversion is received).
APG Capital may not convert the APG Capital Note to the extent that such conversion would result in beneficial ownership by APG
Capital and its affiliates of more than 9.99% of the Company’s issued and outstanding Common Stock.
If the Company redeems the APG Capital Note within 90 days of its issuance,
the Company must pay the principal at a cash redemption premium of 135%, in addition to accrued interest; and if such redemption
is made from the 91st day to the 180th day after issuance, then such redemption premium is 150%, in addition to accrued interest.
After the 180th day following the issuance of the APG Capital Note, there shall be no further right of redemption.
In the event the Company files a registration statement for its securities
prior to the date on which the APG Capital Note is eligible for conversion, the shares of Common Stock issuable upon conversion
shall be piggybacked onto such registration statement. Additionally, while the Note is outstanding and to the extent the Company
grants another party more favorable investment terms, the terms of the APG Capital Note shall automatically adjust to match those
more favorable terms.
In connection with the APG Capital Note, the Company
agreed to cause its transfer agent to reserve 2,222,222 shares of Common Stock, in the event that the APG Capital Note is converted.
APG Capital has the right to periodically request that the number of shares reserved be increased to at least 400% the number
of shares of Common Stock issuable upon conversion of the APG Capital Note. The closing occurred on December 7, 2018, and the
Company received a net amount of $38,000.
JSJ Financing
On December 11, 2018, the Company
issued to JSJ Investments Inc. (“JSJ”) a convertible promissory note (the “JSJ Note”) in the
aggregate principal amount of $61,000 for a purchase price of $58,000, with a maturity date of December 11, 2019. The JSJ
Note was funded on December 13, 2018, and the Company received a net amount of $50,200. The interest rate under the JSJ Note is
12% per annum and increases to 18% per annum if an event of default occurs.
Under the JSJ Note, JSJ may convert all or a portion of the
outstanding principal and accrued interest of the JSJ Note at any time after the 180th day after the issuance date (the “Prepayment
Date”) into shares of Common Stock at a conversion price equal to (i) $0.25 per share until the Prepayment Date or (ii) if
the conversion is made after the Prepayment Date or pursuant to an event of default under the JSJ Note, a price equal to a 42%
discount to the lowest trading price during the 20 trading days prior to the date of a notice of conversion. JSJ may not convert
the JSJ Note to the extent that such conversion would result in beneficial ownership by JSJ and its affiliates of more than 4.99%
of the Company’s issued and outstanding Common Stock.
If the Company voluntarily prepays the JSJ Note within 90 days
of its issuance, the Company must pay the principal at a cash redemption premium of 135%, in addition to outstanding interest;
if such prepayment is made from the 91st day to the 120th day after issuance, then such redemption premium is 140%, in addition
to outstanding interest; if such prepayment is made from the 121st day to the Prepayment Date, then such redemption premium is
145%, in addition to outstanding interest; and if such prepayment is made after the Prepayment Date and before the maturity date,
then such redemption premium is 150%, in addition to accrued interest and default interest (if any).
The foregoing summaries of the terms of the Power Up Note, the
APG Capital Note, the JSJ Note, the Power Up SPA and the APG Capital SPA are subject to, and qualified in their entirety by, the
agreements and instruments attached hereto as Exhibits 4.1, 4.2, 4.3, 10.1 and 10.2, respectively, which are incorporated by reference
herein.