Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On June 25, 2018, Northsight Capital, Inc. (the “Company”) borrowed $58,000 from a third-party pursuant to a convertible promissory note. The note bears interest at 10% annually and matures on or about September 25, 2019.
Repayment of the note is subject to acceleration in the following circumstances:
In the event of a breach of the Note, including the repayment provisions
if a bankruptcy or similar proceeding for the benefit of our creditors is instituted against the Company
if the Company’s common stock is no longer quoted in the OTC market
if the Company fails to comply with its SEC reporting obligations
if the Company ceases operations
if the Company restates its financial statements and it has a material adverse effect on the holder of the Note
In the event of a default under the Note, the Company is required to pay an amount equal to 150% of the amount due under the Note (principal, interest, penalties, costs, etc.); provided that if the Company’s default relates to the conversion provisions of the Note, the Company is required to pay an amount equal to 200% of the amount due under the Note (principal, interest, penalties, costs, etc.).
The Note is convertible into Company common stock, commencing 6 months after the issue date, at a variable conversion price equal to a 39% discount to the market price of the common stock (as defined).
The note may be prepaid at any time during the 180 day period following issuance, subject to payment of a variable premium ranging between 12% to 37% for redemptions between 30 and 180 days after the issuance date. After 180 days, the Note may not be prepaid.