Item 1.01.
Entry into a Material Definitive Agreement.
Securities
Purchase Agreements and Notes
On
June 15, 2017, Sunstock, Inc. (the “Company” or “we”) entered into a securities purchase agreement
(“SPA AUC”) with Auctus Fund, LLC, upon the terms and subject to the conditions of SPA, we issued a convertible
promissory note in the principal amount of $112,250.00 (the “Note”) to Auctus. The Company received proceeds of $99,500.00
in cash from Auctus. Interest accrues on the outstanding principal amount of the Note at the rate of subject 12% per year. The
Note is due and payable on February 24, 2018. The Note is convertible into common stock, subject to Rule 144, at any time
after the issue date, at the lower of (i) the closing sale price of the common stock on the on the trading day immediately preceding
the closing date, and (ii) 55% of the lowest sale price for the common stock during the two (2) lowest trading days during the
twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. If the shares are not
delivered to Auctus within three business days of the Company’s receipt of the conversion notice, the Company will pay Auctus
a penalty of $2,000 per day for each day that the Company fails to deliver such common stock through willful acts designed to
hinder the delivery of common stock to Auctus. Auctus does not have the right to convert the Note, to the extent that it
would beneficially own in excess of 4.99% of our outstanding common stock. The Company shall have the right, exercisable on not
less than three (3) trading days’ prior written notice to Auctus, to prepay the outstanding balance on this Note
for (i) 135% of all unpaid principal and interest if paid within 90 days of the issue date and (ii) 140% of all unpaid principal
and interest starting on the 91st day following the issue date. In the event of default, the amount of principal and interest
not paid when due bear default interest at the rate of 24% per annum and the Auctus Note becomes immediately due and payable.
Regarding the Note, the Company paid Auctus $12,750 for its expenses and legal fees.
The
Note is a long-term debt obligation that is material to the Company. The Note also contains certain representations, warranties,
covenants and events of default including if the Company is delinquent in its periodic report filings with the SEC, and increases
in the amount of the principal and interest rates under the Note in the event of such defaults. In the event of default, at the
option of Auctus and in Auctus’s sole discretion, Auctus may consider the Note immediately due and payable.
The
foregoing descriptions of the SPA and Note are qualified in their entirety by reference to such SPA and Note, which are filed
hereto as Exhibits 10.1, and 4.1 and are incorporated herein by reference.
On
June 22, 2017, the “Company” entered into a securities purchase agreement (“SPA2”) with EMA Financial,
LLC (“EMA), upon the terms and subject to the conditions of SPA2, we issued a convertible promissory note in the
principal amount of $115,000.00 (the “Note2”) to EMA. The Company received proceeds of $100,000.00 in cash
from EMA. Interest accrues on the outstanding principal amount of the Note2 at the rate of 10% per year. The Note2
is due and payable on June 5, 2018. The Note2 is convertible into common stock, subject to Rule 144, at any time
after the issue date, at the lower of (i) the closing sale price of the common stock on the on the trading day immediately preceding
the closing date, and (ii) 50% of the lowest sale price for the common stock during the twenty (25) consecutive
trading days immediately preceding the conversion date. If the closing sale price at any time fall below $0.695 (as appropriately
and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then such 50% figure mentioned
above shall be reduced to 35%. If the shares are not delivered to EMA within three business days of the Company’s receipt
of the conversion notice, the Company will pay EMA a penalty of $1,000 per day for each day that the Company fails to deliver
such common stock through willful acts designed to hinder the delivery of common stock to EMA. EMA does not have the right to
convert the note, to the extent that it would beneficially own in excess of 4.9% of our outstanding common stock. The Company
shall have the right, exercisable on not less than five (5) trading days’ prior written notice to EMA, to prepay the outstanding
balance on this Note for (i) 135% of all unpaid principal and interest if paid within 90 days of the issue date and (ii)
150% of all unpaid principal and interest starting on the 91st day following the issue date. In the event of default, the amount
of principal and interest not paid when due bear default interest at the rate of 24% per annum and the Note2 becomes immediately
due and payable. In connection with the Note2, the Company paid EMA $15,000 for its expenses and legal fees.
The
Note2 is a long-term debt obligation that is material to the Company. The Note2 also contains certain representations,
warranties, covenants and events of default including if the Company is delinquent in its periodic report filings with the SEC,
and increases in the amount of the principal and interest rates under the Note2 in the event of such defaults. In the event
of default, at the option of EMA and in EMA’s sole discretion, EMA may consider the Note2 immediately due and payable.
The
foregoing descriptions of the SPA and Note2 are qualified in their entirety by reference to such SPA and Note2,
which are filed hereto as Exhibits 10.2, and 4.2 and are incorporated herein by reference.