Item 1.01 Entry into a Material Definitive Agreement.
Friendable,
Inc. (the
“Company”
) entered into a
Securities Purchase Agreement, dated July 21, 2017 (the
“Alpha SPA”
)
with Alpha Capital Anstalt (
“Alpha Capital”
), to issue
and sell up to, in principal amount, $500,000 of convertible notes,
payable in two tranches (the “
Alpha
Notes
”). The first tranche of
$300,000 was funded on July 21, 2017 (the “
Initial Closing Date
”). The second
tranche of $200,000 will be upon effectiveness of the registration
statement of Fan Pass Inc. and trading of common stock which is not
later than 9 months after first closing. The Alpha Notes are senior
to all current and future indebtedness of the Company except as
agreed to by the parties. The conversion price of the notes will be
the lowest conversion price of any instrument issued by the
Company. The Alpha Notes are long-term debt obligations that are
material to the Company. The Alpha Notes also contain certain
representations, warranties, covenants and events of default. In
the event of default, at the option of Alpha Capital and in their
sole discretion, Alpha Capital may consider the Alpha Note’s
immediately due and payable.
In
connection with the Alpha Notes and Alpha SPA, the Company also
entered into a Pledge Agreement whereby as collateral security, the
Company pledged shares of common stock of its subsidiary, Fan Pass,
Inc. The number shares pledged will be determined at a later date.
The Company has formed a subsidiary called Fan Pass Inc. to hold
all of the assets of the mobile application “Fan Pass
Live”. The Company also has pledged collateral to Alpha
Capital in the form of the
Fan Pass
Security Agreement
which grants a security interest in and
to, a lien upon and a right of set-off against all of their
respective right, title and interest to the assets of Fan Pass Inc,
including all intellectual property. The Alpha Notes have a
beneficial ownership limitation such that Alpha Capital can never
own more than 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon conversion of the Alpha
Notes.
For its
services as a placement agent for this transaction, Palladium
Capital Advisors, LLC (“
Palladium
”) shall receive
compensation of 8% of the aggregate purchase price paid in each
Closing, the amount being $24,000 for the first closing. The
Company has agreed to pay legal costs of $50,000 payable upon the
First Closing, and an additional $50,000 upon the funding of the
second tranche of $200,000, and $40,000 within thirty (30) days
that Fan Pass, Inc. has a class of common stock registered pursuant
to Section 12(g) of the Exchange Act.
The
foregoing description is qualified in its entirety by the complete
text of the Alpha SPA, Alpha Notes, and Fan Pass Security
Agreement, and Pledge Agreement, which are filed herewith as
Exhibits 10.1, 10.2, 10.3, and 10.4, respectively, and incorporated
herein by reference.