UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 28, 2022
(Date of earliest event reported)
NovAccess Global Inc.
(Exact name of registrant as specified in its charter)
| Colorado | 000-29621 | 84-1384159 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 8584 E. Washington Street, No. 127, Chagrin Falls, Ohio 44023 |
| (Address of principal executive offices) (Zip Code) |
(213) 642-9268
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| None | N/A |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On July 28, 2022, NovAccess Global Inc. (“NovAccess,” the “company” or “we”) entered into an interest-free loan agreement with Jason M. Anderson, an independent member of our board of directors. Reflecting his faith in NovAccess and our management team, Mr. Anderson loaned the company $12,500 on July 29 and agreed to consider an additional loan of $12,500 at the end of August if we request it. The loan does not bear interest (except on default) and is due on the earlier of October 31, 2022 or our receipt of debt or equity financing of at least $3.0 million. We will use the proceeds of the loan for general working capital purposes.
Also on July 28, 2022, we issued a convertible promissory note to Letzhangout, LLC, a company that provides accounting consulting services to NovAccess and also employs our chief financial officer, Neil J. Laird. Pursuant to the note, Letzhangout loaned the company $12,500 on July 29 and agreed to make an additional loan of $12,500 at the end of August if we request it. Amounts loaned under the note bear interest at 12% a year and are due on the earlier of October 31, 2022 or our receipt of debt or equity financing of at least $3.0 million. Until the note is paid in full, Letzhangout has the right to convert all or a portion of the amount outstanding under the note into unregistered shares of our common stock at $0.15 a share, subject to adjustment for stock splits or similar transactions. We will use the proceeds of the loan for general working capital purposes.
The Anderson loan agreement and Letzhangout promissory 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 convertible promissory note to Letzhangout was exempt from registration under Section 4(a)(2) of the Securities Act of 1933.
Item 8.01 Other Events.
On August 1, 2022, the listing of NovAccess’ shares of common stock was upgraded from the OTC Pink Market to the OTCQB Market. The company’s shares will continue to trade under the symbol “XSNX.”
Item 9.01 Financial Statements and Exhibits.
Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NovAccess Global Inc. |
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Dated: August 2, 2022 |
By: |
/s/ Dwain K. Morris-Irvin |
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Dwain K. Morris-Irvin, Chief Executive Officer |
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Exhibit 10.1
Interest Free Loan Agreement
This Interest Free Loan Agreement (this “Agreement”) is entered into as of July 28, 2022 (the “Effective Date”) by and between NovAccess Global Inc., a Colorado corporation (“NovAccess”), and Jason M. Anderson (“Anderson”).
Whereas, NovAccess is currently seeking financing to fund its operations, but requires a short-term loan to fund operations until longer-term financing can be obtained; and
Whereas, Anderson is a member of the NovAccess board of directors and is willing to provide to NovAccess a short-term interest-free loan for specified purposes, reflecting his faith in NovAccess.
Now, Therefore, the parties agree as follows:
1. Loan and Repayment. On the Effective Date, Anderson has loaned to NovAccess $12,500. NovAccess will repay to Anderson without interest all amounts loaned under this Agreement on the earlier to occur of: (a) October 31, 2022; or (b) the receipt by NovAccess of debt or equity financing of at least $3.0 million (the “Due Date”). If the Due Date has not occurred by August 29, 2022, then Anderson will consider loaning NovAccess an additional $12,500 at the request of NovAccess, which additional loan will be subject to all of the terms of this Agreement.
2. Default. If NovAccess fails to repay all amounts loaned under this Agreement on the Due Date, then the balance shall bear interest at 10% per annum and NovAccess agrees to pay, in addition to the principal and interest, reasonable attorneys’ fees and collection costs incurred by Anderson.
3. Miscellaneous.
(a) Successors and Assigns. The rights and obligations of the parties are binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
(b) Waiver and Amendment. Any provision of this Agreement may only be amended, waived or modified upon the written consent of NovAccess and Anderson.
(c) Governing Law. This Agreement and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to the conflicts of law provisions of the State of Ohio, or of any other state.
(d) Waiver of Jury Trial. Each of NovAccess and Anderson agrees to waive their respective rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement.
[Signature Page Follows]
In Witness Whereof, the parties have signed this Agreement as of the Effective Date.
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NovAccess Global Inc. /s/ Dwain K. Morris-Irvin |
/s/ Jason M. Anderson |
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By Dwain K. Morris-Irvin Chief Executive Officer |
Jason M. Anderson |
Exhibit 10.2
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
NovAccess Global Inc.
Convertible Promissory Note
| Up to $25,000 | July 29, 2022 |
For Value Received, NovAccess Global Inc., a Colorado corporation (the “Company”), hereby promises to pay to Letzhangout, LLC (“Holder”), or its registered assigns, in lawful money of the United States of America, the principal sum, plus interest on the aggregate unpaid principal balance from time to time outstanding at the rate of 12% per annum from the date hereof (the “Effective Date”), as provided for in this Convertible Promissory Note (this “Note”).
1. Payment. As of the Effective Date, Holder has loaned to NovAccess $12,500. NovAccess will repay to Holder all principal amounts outstanding under this Note, plus accrued and unpaid interest, on the earlier to occur of: (a) October 31, 2022; or (b) the receipt by NovAccess of debt or equity financing of at least $3.0 million (the “Due Date”). If the Due Date has not occurred by August 29, 2022, then Holder agrees to loan NovAccess an additional $12,500 at the request of NovAccess, which additional loan will be subject to all of the terms of this Note. The Company may prepay all or any part of the balance owed under this Note at any time without penalty. Upon payment in full of the principal balance of this Note, and accrued and unpaid interest, this Note will be automatically cancelled and the Company’s payment obligations under this Note will be extinguished.
2. Events of Default. The Company’s failure to pay any obligation under this Note when due constitutes an “Event of Default” under this Note. While an Event of Default has occurred and is continuing, all amounts due under this Note, including any accrued interest payable hereunder, will bear additional interest at a rate of 14% per annum.
3 Conversion Right. The Holder shall have the right, beginning on the Effective Date and ending on the date of payment in full of all amounts outstanding under this Note, to convert all or any part of the outstanding and unpaid principal, interest, and any other amounts under this Note, into fully paid and non-assessable shares of the Company’s common stock, no par value (the “Common Stock”), or any shares of capital stock or other securities of the Company into which such Common Stock is hereafter changed or reclassified, at the Conversion Price (as defined below) as provided herein (a “Conversion”). The number of shares of Common Stock to be issued upon each Conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date of the Holder’s written notice of Conversion delivered to the Company (the “Notice of Conversion”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of the principal,
interest and any other payments due under this Note, specified by the Holder in the Notice of Conversion be converted in such Conversion. Subject to the adjustments described herein, the “Conversion Price” shall equal $0.15. If the Company splits or combines the Common Stock or engages in any comparable transaction, the Conversion Price shall be adjusted accordingly as determined in good faith by the Company’s board of directors (for example, if the Common Stock is reverse split one-for-ten, then the Conversion Price then in effect would be multiplied by ten). The Company shall notify Holder in writing of any adjustment to the Conversion Price. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (a) such shares are sold pursuant to an effective registration statement under the Securities Act; (b) the shares to be sold or transferred may be sold or transferred pursuant to Rule 144 under the Securities Act or other applicable exemption; or (c) such shares are transferred in a private sale subject to applicable restrictions, and each certificate for shares of Common Stock issuable upon conversion of this Note will bear an appropriate restrictive legend.
4. Miscellaneous.
(a) Successors and Assigns; Transfer of this Note. The rights and obligations of the Company and Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
(b) Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.
(c) Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to the conflicts of law provisions of the State of Ohio, or of any other state.
(d) Waiver of Jury Trial; Judicial Reference. By acceptance of this Note, Holder hereby agrees and the Company hereby agrees to waive their respective rights to a jury trial of any claim or cause of action based upon or arising out of this Note.
(e) Holder’s Acknowledgments. Holder represents that Holder is an accredited investor as defined in Rule 501 under the Securities Act of 1933 and understands that this Note is a risky investment and can bear the loss of the full amount invested.
(f) Attorneys’ Fees. If the amounts due under this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings, or if this Note is placed in the hands of an attorney for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys’ fees and costs incurred by Holder.
(Signature Page Follows)
The Company has caused this Promissory Note to be issued as of the date first written above.
NovAccess Global Inc.
/s/ Dwain K. Morris-Irvin
By Dwain K. Morris-Irvin, Chief Executive Officer