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

February 4, 2016
Date of Report (date of earliest event reported)

 

 

 

MyDx, Inc.

(Exact name of Registrant as specified in its charter)

 

Nevada   333-191721   99-0384160
(State or other jurisdiction of
incorporation or organization)
  (Commission File Number)   (I.R.S. Employer
Identification Number)

 

6335 Ferris Square, Suite B

San Diego, California 92121

(Address of principal executive offices)

 

(800) 814-4550

(Registrant’s telephone number, including area code)

 

 

(Former name or former address, if changed since last report)

 

 

 

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 (see General Instruction A.2. below):

 

☐    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))

 

 

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement

 

On February 8, 2016, MyDx, Inc. (the “Company”) entered into an Equity Purchase Agreement (the “EPA”), Registration Rights Agreement (“RRA”) and Convertible Promissory Note in the original principal amount of $50,000 (the “Note”) with Kodiak Capital Group, LLC (“Kodiak”).

 

The EPA provides that the Company may, in its discretion, sell up to $1,000,000 of shares of Company common stock to Kodiak. The sale of shares of Company common stock is subject to the conditions set forth in the EPA, which include, but are not limited to, the Company filing a Registration Statement on Form S-1 to register the shares to be sold to Kodiak and the Registration Statement becoming effective. The purchase price to be paid for the shares will be 70% of the market price for such shares as determined pursuant to the terms set forth in the EPA. The RRA provides that the Company will file a Registration Statement to register up to 4,000,000 shares to be sold to Kodiak pursuant to the EPA, or issued to Kodiak upon conversion of the Note, and that the Company shall use commercially reasonable efforts to file the Registration Statement before March 31, 2016. Pursuant to the terms of the EPA, the Company agreed to issue Kodiak the Note as a commitment fee. The Note must be repaid on or before February 2, 2017. The Note may be prepaid by the Company at any time without penalty. The Note may be converted by Kodiak at any time after August 2, 2016 of the date of issuance into shares of Company common stock at a conversion price equal to 50% of the market price (as determined in the Note). Any financing pursuant to the EPA is subject to the Company’s fulfilling the conditions to sell shares to Kodiak, including the effectiveness of the Registration Statement. The Company cannot provide any assurances that any shares will be sold under the EPA or the prices at which such shares may be sold.

 

The EPA, RRA and Note also contain certain representations, warranties, covenants and events of default, and increases in the amount of the principal under the Note in the event of such defaults. The foregoing is only a brief description of the material terms of the EPA, RRA and Note, and does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are qualified in their entirety by reference to the agreements and their exhibits which are filed as an exhibit to this Current Report.

 

The issuance of the Note was made in reliance on the exemption provided by Section 4(2) of the Securities Act for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act. The Company’s reliance upon Section 4(2) of the Securities Act in issuing the securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there was only one recipient; (c) there were no subsequent or contemporaneous public offerings of the securities by the Company; (d) the securities were not broken down into smaller denominations; (e) the negotiations for the issuance of the securities took place directly between the individual and the Company; and (f) the recipient of the Note was an accredited investor.

 

Item 3.02 Unregistered Sales of Equity Securities

 

The descriptions of the equity securities described in Item 1.01 issued by the Company are incorporated herein.

 

Item 7.01. Regulation FD Disclosure.

 

On February 6, 2016, the Company conducted a Shareholder Update and Q&Q via a webcast and conference call. A copy of the slide presentation used in the webcast is attached in the form attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. The information contained in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing by the Company under the Securities Act. This Form 8-K and the exhibit are being filed solely for the purposes of the Company’s compliance with Regulation FD.

 

A replay of the conference call will be available through February 11, 2016, by dialing 877-660-6853 (U.S. and Canada) or 201-612-7415 (international) and entering Conference ID 13629710.

 

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This Current Report and exhibit on Form 8-K contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. In some cases, it is possible to identify forward-looking statements because they contain words such as “anticipates,” believes,” “contemplates,” “continue,” “could,” “estimates,” “expects,” “future,” “intends,” “likely,” “may,” “plans,” “potential,” “predicts,” “projects,” “seek,” “should,” “target” or “will,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Many factors could cause our actual operations or results to differ materially from the operations and results anticipated in forward-looking statements. These factors include, but are not limited to, our ability to successfully develop and commercialize our products and the other factors contained in the section entitled “Risk Factors” contained in our Form 10-Q filed with the Securities and Exchange Commission on November 23, 2015. We have based these forward-looking statements primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions, and other factors. You should not rely on forward-looking statements as predictions of future events. Except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements, and we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)     Exhibits

 

The exhibits listed in the following Exhibit Index are filed as part of this Current Report on Form 8-K.

 

Exhibit No.

 

Description

10.30   Equity Purchase Agreement dated February 2, 2016 with Kodiak Capital Group, LLC
10.31   Registration Rights Agreement dated February 2, 2016 with Kodiak Capital Group, LLC
10.32   Convertible Promissory Note in the principal amount of $50,000 dated February 2, 2016 with Kodiak Capital Group, LLC
99.1   Copy of MyDx Shareholder Update and Q&A Presentation

 

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SIGNATURES

 

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.

 

  MyDx, Inc.
     
Date: February 9, 2016 By: /s/ Daniel Yazbeck
    Daniel Yazbeck, Chief Executive Officer

 

 

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Exhibit 10.30

 

EQUITY PURCHASE AGREEMENT

 

THIS EQUITY PURCHASE AGREEMENT entered into as of the 2nd day of February, 2016 (this "AGREEMENT"), by and between KODIAK CAPITAL GROUP, LLC, a Delaware limited liability company ("INVESTOR"), and MYDX, INC., a Nevada corporation (the "COMPANY").

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to Investor, from time to time as provided herein, and Investor shall purchase up to One Million Dollars ($1,000,000) of the Company’s Common Stock (as defined below).

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

CERTAIN DEFINITIONS

 

Section 1.1 DEFINED TERMS as used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined)

 

"AGREEMENT" shall have the meaning specified in the preamble hereof.

 

"BY-LAWS" shall have the meaning specified in Section 4.7.

 

"CLAIM NOTICE" shall have the meaning specified in Section 9.3(a).

 

“CLEARING DATE” shall be the date in which the Put Shares have been deposited into the Investor’s brokerage account.

 

"CLOSING" shall mean one of the closings of a purchase and sale of shares of Common Stock pursuant to Section 2.3.

 

"CLOSING CERTIFICATE" shall mean the closing certificate of the Company in the form of Exhibit B hereto.

 

"CLOSING PRICE" shall mean the closing bid price for the Company’s common stock on the Principal Market on a Trading Day as reported by Bloomberg Finance L.P.

 

"COMMITMENT NOTE" shall have the meaning specified in Section 2.1(b).

 

"COMMITMENT PERIOD" shall mean the period commencing on the Execution Date, and ending on the earlier of (i) the date on which Investor shall have purchased Put Shares pursuant to this Agreement for an aggregate Purchase Price of the Maximum Commitment Amount or (ii) the one-year anniversary of the Execution Date.

 

"COMMON STOCK" shall mean the Company's common stock, $0.0001 par value per share, and any shares of any other class of common stock whether now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and assets (upon liquidation of the Company).

  

"COMPANY" shall have the meaning specified in the preamble to this Agreement.

 

"DAMAGES" shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys' fees and disbursements and costs and expenses of expert witnesses and investigation).

  

"DISPUTE PERIOD" shall have the meaning specified in Section 9.3(a).

 

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"DTC" shall have the meaning specified in Section 2.3.

 

"DWAC" shall have the meaning specified in Section 2.3.

 

"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

"EXECUTION DATE" shall mean the date on which this Agreement is executed and delivered by the Company and Investor.

 

"FINRA" shall mean the Financial Industry Regulatory Authority, Inc.

 

"INVESTMENT AMOUNT" shall mean the Put Shares referenced in the Put Notice multiplied by the Purchase Price.

 

"INDEMNIFIED PARTY" shall have the meaning specified in Section 9.3(a).

 

"INDEMNIFYING PARTY" shall have the meaning specified in Section 9.3(a).

 

"INDEMNITY NOTICE" shall have the meaning specified in Section 9.3(b).

 

"INVESTOR" shall have the meaning specified in the preamble to this Agreement.

 

"MARKET PRICE" shall mean the lowest closing bid price on the Principal Market for any Trading Day during the Valuation Period, as reported by Bloomberg Finance L.P.

 

"MATERIAL ADVERSE EFFECT" shall mean any effect on the business, operations, properties, or financial condition of the Company that is material and adverse to the Company and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to enter into and perform its obligations under any of this Agreement.

 

"MAXIMUM COMMITMENT AMOUNT" shall mean One Million Dollars ($1,000,000).

 

"NOTE SHARES" shall mean the shares of Common Stock issuable upon conversion of the Commitment Note.

 

"PERSON" shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

  

"PRINCIPAL MARKET" shall mean any of the national exchanges (i.e. NYSE, NYSE AMEX, Nasdaq), or principal quotation systems (i.e. OTCQX, OTCQB, OTCPink), or other principal exchange or recognized quotation system which is at the time the principal trading platform or market for the Common Stock.

 

"PURCHASE PRICE" shall mean 70% of the Market Price on such date on which the Purchase Price is calculated in accordance with the terms and conditions of this Agreement.

 

"PUT" shall mean the right of the Company to require the Investor to purchase shares of Common Stock, subject to the terms and conditions of this Agreement.

 

"PUT DATE" shall mean any Trading Day during the Commitment Period that a Put Notice is deemed delivered pursuant to Section 2.2(b).

 

"PUT NOTICE" shall mean a written notice, substantially in the form of Exhibit A hereto, to Investor setting forth the Put Shares with respect to which the Company intends to require Investor to purchase pursuant to the terms of this Agreement.

 

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"PUT SHARES" shall mean all shares of Common Stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in accordance with the terms and conditions of this Agreement.

 

"REGISTERED SECURITIES" shall mean the (a) Put Shares, (b) the Note Shares and (c) any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registered Securities, once issued such securities shall cease to be Registered Securities when (i) a Registration Statement has been declared effective by the SEC and such Registered Securities have been disposed of pursuant to a Registration Statement, (ii) such Registered Securities have been sold under circumstances under which all of the applicable conditions of Rule 144 are met, (iii) such time as such Registered Securities have been otherwise transferred to holders who may trade such shares without restriction under the Securities Act or (iv) in the opinion of counsel to the Company, which counsel shall be reasonably acceptable to Investor (for which purposes it is agreed that the Company’s counsel as of the Execution Date shall be deemed acceptable), such Registered Securities may be sold without registration under the Securities Act or the need for an exemption from any such registration requirements and without any time, volume or manner limitations pursuant to Rule 144(b)(i) (or any similar provision then in effect) under the Securities Act.

 

"REGISTRATION STATEMENT" shall mean the Company’s effective registration statement on file with the SEC registering the resale of the Registered Securities, and any follow up registration statement or amendment thereto.         

 

"REGULATION D" shall mean Regulation D promulgated under the Securities Act.

 

"RULE 144" shall mean Rule 144 promulgated under the Securities Act or any similar provision then in force under the Securities Act.

 

"SEC" shall mean the United States Securities and Exchange Commission.

 

"SECURITIES ACT" shall have the meaning specified in the recitals of this Agreement.

 

"SEC DOCUMENTS" shall mean, as of a particular date, all reports and other documents filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the Company's then most recently completed and reported fiscal year as of the time in question (provided that if the date in question is within ninety days of the beginning of the Company's fiscal year, the term shall include all documents filed since the beginning of the preceding fiscal year).

 

“SHORT SALES” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.

  

"THIRD PARTY CLAIM" shall have the meaning specified in Section 9.3(a).

 

“TRADING DAY” shall mean a day on which the Principal Market shall be open for business.

 

“TRANSACTION DOCUMENTS” shall mean this Agreement and the Registration Rights Agreement.

  

"VALUATION PERIOD" shall mean the period of five (5) Trading Days immediately following the Clearing Date associated with the applicable Put Notice during which the Purchase Price of the Common Stock is valued. Investor shall notify the Company in writing of the occurrence of the Clearing Date associated with a Put Notice. The Valuation Period shall begin the first Trading Day following such written notice from Investor.

 

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ARTICLE II

PURCHASE AND SALE OF COMMON STOCK

 

Section 2.1           INVESTMENTS.

 

(a)          PUTS. Upon the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), on any Put Date the Company may exercise a Put by the delivery of a Put Notice.

 

(b)         COMMITMENT NOTE. As a condition for the execution of this Agreement by the Investor, the Company shall issue to the Investor a convertible note in the principal amount equal to $50,000 (the “Note”) on the Execution Date.

 

Section 2.2           MECHANICS.

 

(a)          PUT NOTICE. At any time and from time to time during the Commitment Period, the Company may deliver a Put Notice to Investor, subject to the conditions set forth in Section 7.2. On the Put Date the Company shall deliver to Investor’s brokerage account the Put Shares referenced in the Put Notice.

 

(b)          DATE OF DELIVERY OF PUT NOTICE. A Put Notice shall be deemed delivered on (i) the Trading Day it is received by email by Investor if such notice is received on or prior to 09:00 New York time, or (ii) the immediately succeeding Trading Day if it is received by email after 09:00 New York time on a Trading Day or at any time on a day which is not a Trading Day. The Valuation Period will commence on the Clearing Date.

 

Section 2.3          CLOSINGS. At the end of the Valuation Period the Purchase Price shall be established; if the value of the Put Shares initially delivered to Investor is greater than the Maximum Commitment Amount then immediately after the Valuation Period the Investor shall deliver to Company the Put Shares surplus associated with such Put. The Closing of a Put shall occur upon the first Trading Day following the completion of the Valuation Period, whereby Investor shall deliver the Investment Amount, by wire transfer of immediately available funds to an account designated by the Company. In addition, on or prior to such Closing Date, each of the Company and Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

  

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF INVESTOR

 

Investor represents and warrants to the Company that:

 

Section 3.1           INTENT. Investor is entering into this Agreement for its own account and Investor has no present arrangement (whether or not legally binding) at any time to sell the Registered Securities to or through any person or entity; provided, however, that Investor reserves the right to dispose of the Registered Securities at any time in accordance with federal and state securities laws applicable to such disposition.

 

Section 3.2           NO LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

 

Section 3.3           SOPHISTICATED INVESTOR. Investor is a sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in Rule 501 of Regulation D), and Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Registered Securities. Investor acknowledges that an investment in the Registered Securities is speculative and involves a high degree of risk.

 

Section 3.4          AUTHORITY. (a) Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and the transactions contemplated hereby in accordance with its terms; (b) the execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization of Investor or its partners is required; and (c) this Agreement has been duly authorized and validly executed and delivered by Investor and constitutes a valid and binding obligation of Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

  

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Section 3.5           NOT AN AFFILIATE. Investor is not an officer, director or "affiliate" (as that term is defined in Rule 405 of the Securities Act) of the Company.

 

Section 3.6           ORGANIZATION AND STANDING. Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Investor is duly qualified and in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, other than those in which the failure so to qualify would not have a material adverse effect on Investor.

 

Section 3.7           ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and any other document or instrument contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, and compliance with the requirements hereof and thereof, will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Investor, (b) violate any provision of any indenture, instrument or agreement to which Investor is a party or is subject, or by which Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by Investor to any third party, or (d) require the approval of any third-party (that has not been obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation to which Investor is subject or to which any of its assets, operations or management may be subject.

 

Section 3.8           DISCLOSURE; ACCESS TO INFORMATION. Investor had an opportunity to review copies of the SEC Documents filed on behalf of the Company and has had access to all publicly available information with respect to the Company.

 

Section 3.9           MANNER OF SALE. At no time was Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertising.

 

Section 3.10          Estimates; Forward-Looking Statements . The Investor acknowledges that any and all estimates or forward-looking statements or projections with which it may have been provided (collectively, the “Information”) were prepared by the Company in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed, will not be updated by the Company and should not be relied upon.  The Investor further acknowledges that any and all Information regarding the historical performance of the Company is not necessarily indicative of future performance.

 

Section 3.11          Trading Activities; No Short Sales .   Neither the Investor nor any of its affiliates currently has an open short position in the Common Stock.  Since the earlier of (a) such time when such Investor was first contacted by the Company or any other person acting on behalf of the Company regarding the transactions contemplated hereby or (b) thirty (30) days prior to the date hereof, neither such Investor nor any affiliate of such Investor which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to such Investor’s investments or trading or information concerning such Investor’s investments, including in respect of the Registered Securities, or (z) is subject to such Investor’s review or input concerning such affiliate’s investments or trading (collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to effect any Short Sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to the Common Stock, granted any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derived any significant part of its value from the Common Stock or otherwise sought to hedge its position in the Registered Securities.

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Investor that, except as disclosed in the SEC Documents:

 

Section 4.1          ORGANIZATION OF THE COMPANY. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, other than those in which the failure so to qualify would not have a Material Adverse Effect.

 

Section 4.2          AUTHORITY. (a) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Put Shares; (b) the execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or stockholders is required; and (c) this Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.

 

Section 4.3          CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 75,000,000 shares of Common Stock, $0.001 par value per share, of which 21,845,932 shares were issued and outstanding as of November 20, 2015 and no shares of preferred stock, of which no shares were issued and outstanding as of November 20, 2015. Except as set forth on Schedule 4.3 and as disclosed in the SEC Documents, there are no outstanding securities which are convertible into shares of Common Stock, whether such conversion is currently exercisable or exercisable only upon some future date or the occurrence of some event in the future. All of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable.

 

Section 4.4          COMMON STOCK. To the best of its knowledge, the Company is in full compliance with all reporting requirements of the Exchange Act, and the Company has maintained all requirements for the continued listing or quotation of the Common Stock, and such Common Stock is currently listed or quoted on the Principal Market which is presently the OTCQB.

 

Section 4.5          SEC DOCUMENTS. The Company may make available to Investor true and complete copies of the SEC Documents (including, without limitation, proxy information and solicitation materials). To the Company’s knowledge, the Company has not provided to Investor any information that, according to applicable law, rule or regulation, should have been disclosed publicly prior to the date hereof by the Company, but which has not been so disclosed. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

 

Section 4.6          VALID ISSUANCES. When issued and paid for as herein provided, the Put Shares shall be duly and validly issued, fully paid, and non-assessable. The sales of the Put Shares pursuant to this Agreement, and the Company's performance of its obligations hereunder, shall not (a) result in the creation or imposition of any liens, charges, claims or other encumbrances upon the Put Shares, or any of the assets of the Company, or (b) entitle the holders of outstanding shares of Common Stock to preemptive or other rights to subscribe to or acquire the Common Stock or other securities of the Company. The Put Shares shall not subject Investor to personal liability, in excess of the subscription price by reason of the ownership thereof.

 

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Section 4.7           NO CONFLICTS. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including without limitation the issuance of the Put Shares, do not and will not (a) result in a violation of the Company’s Certificate of Incorporation or By-Laws or (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture, instrument or any "lock-up" or similar provision of any underwriting or similar agreement to which the Company is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect) nor is the Company otherwise materially in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or issue and sell the Common Stock in accordance with the terms hereof (other than any SEC, FINRA or state securities filings that may be required to be made by the Company subsequent to any Closing, or any registration statement that may be filed pursuant hereto); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of Investor herein.

 

Section 4.8           NO MATERIAL ADVERSE CHANGE. Since December 31, 2015 no event has occurred that would have a Material Adverse Effect on the Company.

 

Section 4.9           LITIGATION AND OTHER PROCEEDINGS. Except as disclosed in the Company’s SEC Documents, there are no lawsuits or proceedings pending or to the knowledge of the Company threatened, against the Company, nor has the Company received any written or oral notice of any such action, suit, proceeding or investigation, which would have a Material Adverse Effect. No judgment, order, writ, injunction or decree or award has been issued by or, so far as is known by the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect.

 

Section 4.10         DILUTION. The number of shares of Common Stock issuable as Put Shares may increase substantially in certain circumstances, including, but not necessarily limited to, the circumstance wherein the trading price of the Common Stock declines during the period between the Execution Date and the end of the Commitment Period. The Company’s executive officers and directors have studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential dilutive effect. The board of directors of the Company has concluded in its good faith business judgment that such issuance is in the best interests of the Company. The Company specifically acknowledges that its obligation to issue the Put Shares is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company.

 

ARTICLE V

COVENANTS OF INVESTOR

 

Section 5.1           COMPLIANCE WITH LAW; TRADING IN SECURITIES. Investor's trading activities with respect to shares of the Common Stock will be in compliance with all applicable state and federal securities laws, rules and regulations and the rules and regulations of FINRA and the Principal Market on which the Common Stock is listed or quoted.

 

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Section 5.2           SHORT SALES AND CONFIDENTIALITY. Neither Investor nor any trading affiliate will execute any Short Sales during the period from the date hereof to the end of the Commitment Period. For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put Notice of such number of shares of Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short Sale.

 

Other than to other Persons party to this Agreement, Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

  

ARTICLE VI

COVENANTS OF THE COMPANY

 

Section 6.1           RESERVATION OF COMMON STOCK. The Company will, from time to time as needed in advance of a Closing Date, reserve and keep available until the consummation of such Closing, free of preemptive rights sufficient shares of Common Stock for the purpose of enabling the Company to satisfy its obligation to issue the Put Shares to be issued in connection therewith. The number of shares so reserved from time to time, as theretofore increased or reduced as hereinafter provided, may be reduced by the number of shares actually delivered hereunder.

 

Section 6.2           LISTING OF COMMON STOCK. If the Company applies to have the Common Stock traded on any other Principal Market, it shall include in such application the Put Shares, and shall take such other action as is necessary or desirable in the reasonable opinion of Investor to cause the Common Stock to be listed on such other Principal Market as promptly as possible. The Company shall use its commercially reasonable efforts to continue the listing and trading of the Common Stock on the Principal Market (including, without limitation, maintaining sufficient net tangible assets) and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the FINRA and the Principal Market.

  

ARTICLE VII

CONDITIONS TO DELIVERY OF

PUT NOTICES AND CONDITIONS TO CLOSING

 

Section 7.1          CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND SELL COMMON STOCK. The obligation hereunder of the Company to issue and sell the Put Shares to Investor is subject to the satisfaction of each of the conditions set forth below.

 

(a)         ACCURACY OF INVESTOR'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of Investor shall be true and correct in all material respects as of the date of this Agreement and as of the date of each such Closing as though made at each such time.

 

(b)          PERFORMANCE BY INVESTOR. Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Investor at or prior to such Closing.

  

Section 7.2           CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A PUT NOTICE AND THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The right of the Company to deliver a Put Notice and the obligation of Investor hereunder to acquire and pay for the Put Shares is subject to the satisfaction of each of the following conditions:

 

(a)          EFFECTIVE REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall remain effective for the sale by Investor of the Registered Securities subject to such Put Notice, and (i) neither the Company nor Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so and (ii) no other suspension of the use or withdrawal of the effectiveness of such Registration Statement or related prospectus shall exist. 

 

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(b)          ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in all material respects (except for representations and warranties specifically made as of a particular date), except for any conditions which have temporarily caused any representations or warranties herein to be incorrect and which have been corrected with no continuing impairment to the Company or Investor.

 

(c)          PERFORMANCE BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company.

 

(d)          NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by this Agreement.

 

(e)          ADVERSE CHANGES. Since the date of filing of the Company's most recent SEC Document, no event that had or is reasonably likely to have a Material Adverse Effect has occurred.

 

(f)          NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC, the Principal Market or the FINRA and the Common Stock shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market.

 

(g)          TEN PERCENT LIMITATION. On each Closing Date, the number of Put Shares then to be purchased by Investor shall not exceed the number of such shares that, when aggregated with all other shares of Common Stock then owned by Investor beneficially or deemed beneficially owned by Investor, would result in Investor owning more than 9.99% of all of such Common Stock as would be outstanding on such Closing Date, as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder. For purposes of this Section, in the event that the amount of Common Stock outstanding as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder is greater on a Closing Date than on the date upon which the Put Notice associated with such Closing Date is given, the amount of Common Stock outstanding on such Closing Date shall govern for purposes of determining whether Investor, when aggregating all purchases of Common Stock made pursuant to this Agreement, would own more than 9.99% of the Common Stock following such Closing Date.

 

(h)          NO KNOWLEDGE. The Company shall have no knowledge of any event more likely than not to have the effect of causing such Registration Statement to be suspended or otherwise ineffective (which event is more likely than not to occur within the fifteen (15) Trading Days following the Trading Day on which such Put Notice is deemed delivered).

   

(i)           OTHER. On the date of delivery of each Put Notice, Investor shall have received a certificate in substantially the form and substance of Exhibit B hereto, executed by an executive officer of the Company and to the effect that all the conditions to such Closing shall have been satisfied as at the date of each such certificate.

 

ARTICLE VIII

LEGENDS

 

Section 8.1          PUT SHARES. No legend shall be placed on the share certificates representing the Put Shares.

 

Section 8.2         NOTE SHARES. Certificates evidencing the Note Shares shall not contain a legend (i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Note Shares pursuant to Rule 144, or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC).

 

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Section 8.3         INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall affect in any way Investor's obligations under any agreement to comply with all applicable securities laws upon the sale of the Common Stock.

 

ARTICLE IX

NOTICES; INDEMNIFICATION

 

Section 9.1         NOTICES. Any and all notices or other communications or deliveries to be provided by the Investor hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth below, or such other facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 9.1. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to the Investor at the facsimile number or email address or address of the Investor set forth below. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be:

 

If to the Company:

MyDx, Inc.

6335 Ferris Square

Suite B

San Diego, CA 92121

 

If to the Investor:

Kodiak Capital Group, LLC

260 Newport Center Drive

Newport Beach, CA 92660

info@kodiakfunds.com

 

Either party hereto may from time to time change its address or email for notices under this Section 9.1 by giving at least ten (10) days' prior written notice of such changed address to the other party hereto.

 

Section 9.2         INDEMNIFICATION. Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”) from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of Indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result primarily from Indemnified Party's failure to perform any covenant or agreement contained in this Agreement or Indemnified Party's negligence, recklessness or bad faith in performing its obligations under this Agreement; provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the Indemnified Party expressly for use in the Registration Statement, any post-effective amendment thereof or supplement thereto, or any preliminary prospectus or final prospectus (as amended or supplemented). 

 

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Section 9.3          METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party (as defined below) under Section 9.2 shall be asserted and resolved as follows:

 

(a)          In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against or sought to be collected from such Indemnified Party by a person other than a party hereto or an affiliate thereof (a "THIRD PARTY CLAIM"), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party's claim for indemnification that is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a "CLAIM NOTICE") with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party's ability to defend has been prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period ending thirty (30) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the "DISPUTE PERIOD") whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.

 

(i)          If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full pursuant to Section 9.2). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party's delivery of the notice referred to in the first sentence of this clause (i), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and provided further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation. Notwithstanding the foregoing, the Indemnified Party may takeover the control of the defense or settlement of a Third Party Claim at any time if it irrevocably waives its right to indemnity under Section 9.2 with respect to such Third Party Claim.

 

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(ii)         If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party(with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party's defense pursuant to this clause (ii) or of the Indemnifying Party's participation therein at the Indemnified Party's request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this clause (ii), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

 

(iii)        If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

(b)          In the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such claim (an "INDEMNITY NOTICE") with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party's rights hereunder except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

(c)          The Indemnifying Party agrees to pay the Indemnified Party, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.

 

(d)          The indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.

 

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ARTICLE X

MISCELLANEOUS

 

Section 10.1         GOVERNING LAW; JURISDICTION. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the Company and the Investor shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. Each of the Company and Investor hereby submit to the exclusive jurisdiction of the United States Federal and state courts located in California with respect to the the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein.

 

Section 10.2         JURY TRIAL WAIVER. The Company and the Investor hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with the Transaction Documents.

 

Section 10.3         ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and Investor and their respective successors. Neither this Agreement nor any rights of Investor or the Company hereunder may be assigned by either party to any other person.

 

Section 10.4         THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and Investor and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section 10.5         TERMINATION. The Company may terminate this Agreement at any time by written notice to the Investor. Additionally, this Agreement shall terminate at the end of Commitment Period or as otherwise provided herein; provided, however, that the provisions of Articles IX, and Sections 10.1 and 10.2 shall survive the termination of this Agreement for a period of twenty four (24) months.

 

Section 10.6         ENTIRE AGREEMENT, AMENDMENT; NO WAIVER. This Agreement and the instruments referenced herein contain the entire understanding of the Company and Investor with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

 

Section 10.7         FEES AND EXPENSES. The Company agrees to pay its own expenses in connection with the preparation of this Agreement and performance of its obligations hereunder. The Company shall pay all stamp or other similar taxes and duties levied in connection with issuance of the Put Shares pursuant hereto.

 

Section 10.8         COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one and the same instrument. This Agreement may be delivered to the other parties hereto by email of a copy of this Agreement bearing the signature of the parties so delivering this Agreement.

 

Section 10.9         SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.

 

Section 10.10       FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 10.11      NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

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Section 10.12      EQUITABLE RELIEF. Each party recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the other party. Each party therefore agrees that the other party shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

 

Section 10.13      TITLE AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are not to be considered in construing or interpreting this Agreement.

 

Section 10.14      REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity relied upon for the determination of the Closing Price for the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg Finance L.P. or any successor thereto. The written mutual consent of Investor and the Company shall be required to employ any other reporting entity.

 

Section 10.15      PUBLICITY. The Company and Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing party shall provide the other parties with prior notice of such public statement. Notwithstanding the foregoing, the Company shall not publicly disclose the name of Investor without the prior written consent of such Investor, except to the extent required by law. Investor acknowledges that this Agreement and all or part of the Transaction Documents may be deemed to be "material contracts" as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities Act or the Exchange Act. Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.

 

Section 10.16     SPECIAL, INDIRECT AND OTHER LOSSES . NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR PUNITIVE DAMAGES OR FOR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER SECTION 9.2.

  

[-Signature page follows-]

  

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

COMPANY:  
     
MYDX, INC.  
   
By: /s/ Daniel Yazbeck  
  Daniel Yazbeck, CEO  
     
INVESTOR:  
     
KODIAK CAPITAL GROUP, LLC  
   
By: /s/ Ryan Hodson  
Name: Ryan Hodson  
Title: Managing Director  

  

 

 

[-Signature page to Equity Purchase Agreement-]

 

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EXHIBIT A

 

FORM OF PUT NOTICE

 

TO: KODIAK CAPITAL GROUP, LLC

 

We refer to the Equity Purchase Agreement dated February 2, 2016 (the “Agreement”) entered into by MyDx, Inc. (the “Company”) and you. Capitalized terms defined in the Agreement shall, unless otherwise defined, have the same meaning when used herein.

 

We hereby:

 

1) Give you notice that we require you to purchase ______________ Put Shares;

 

2) Certify that, as of the date hereof, to the best of our knowledge, the conditions set forth in Section 7.2 of the Agreement are satisfied.

 

Date: _____________, 2016

  

By:    
Name:    
Title:    

 

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EXHIBIT B

 

FORM OF CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER OF MYDX, INC.

 

Pursuant to Section 7.2(j) of that certain Equity Purchase Agreement dated February 2, 2016 (the “Agreement”) by and between the Company and KODIAK CAPITAL GROUP, LLC (the “Investor”), the undersigned, in his capacity as the Chief Executive Officer of MYDX, INC. (the “Company”), and not in his individual capacity, hereby certifies, as of the date hereof (such date, the “Condition Satisfaction Date”), the following:

 

1.          The representations and warranties of the Company are true and correct in all material respects as of the Condition Satisfaction Date as though made on the Condition Satisfaction Date (except for representations and warranties specifically made as of a particular date) with respect to all periods, and as to all events and circumstances occurring or existing to and including the Condition Satisfaction Date, except for any conditions which have temporarily caused any representations or warranties of the Company set forth in the Agreement to be incorrect and which have been corrected with no continuing impairment to the Company or Investor; and

 

2.          All of the Company’s conditions to Closing set forth in Section 7.2 of the Agreement have been satisfied as of the Condition Satisfaction Date.

 

Capitalized terms used herein shall have the meanings set forth in the Agreement unless otherwise defined herein.

 

IN WITNESS WHEREOF, the undersigned has hereunto affixed his hand as of the __________ day of ____________, 2016.

 

By:    
Name:    
Title:    

 

 

17

 

 

Exhibit 10.31

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement ("Agreement"), dated February 2, 2016, is made by and between MYDX, INC., Nevada corporation ("Company"), and KODIAK CAPITAL GROUP, LLC a Delaware limited liability company (the "Investor").

 

RECITALS

 

WHEREAS, upon the terms and subject to the conditions of the Equity Purchase Agreement ("Purchase Agreement"), between the Investor and the Company, the Company has agreed to issue and sell to the Investor shares (the "Put Shares") of its common stock, $0.0001 par value per share (the "Common Stock") from time to time for an aggregate investment price of up to One Million Dollars ($1,000,000) (the "EPA Securities");

 

WHEREAS, as a condition for the execution of the Purchase Agreement by the Investor, the Company has agreed to issue to the Investor a convertible note in the principal amount equal to Fifty Thousand Dollars ($50,000) (the “Note "); and

 

WHEREAS, to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "Securities Act"), and applicable state securities laws with respect to the EPA Securities, the shares of Common Stock underlying the Note (the “Note Securities”) and any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise (together with the EPA Securities and the Note Securities, the “Registered Securities”).

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

 

1.             Definitions.

 

(a)            As used in this Agreement, the following terms shall have the following meaning:

 

(i)            "Execution Date" means the date of this Agreement.

 

(ii)           "Investor" has the meaning set forth in the preamble to this Agreement.

 

(iii)          "Register," "registered" and "registration" refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a delayed or continuous basis ("Rule 415"), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the "SEC").

 

(iv)          "Registered Securities" will have the same meaning as set forth in the Purchase Agreement.

 

(v)          "Registration Statement" means the Company ’s registration statement on Form S-1, or any similar registration statement of the Company filed with SEC under the Securities Act with respect to the Registered Securities.

 

(vi)       "EDGAR" means the SEC's Electronic Data Gathering, Analysis and Retrieval System.

 

(vii)       “ Exchange Act means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the SEC thereunder, all as the same will then be in effect.

 

   
 

 

(b)             Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.

  

2.              Obligation of the Company. In connection with the registration of the Registered Securities, the Company shall do each of the following:

 

(a)            Prepare promptly and file with the SEC by June 30, 2016, a Registration Statement with respect to not less than the maximum allowable under Rule 415 of Registered Securities (and the parties have agreed to register a maximum of 4,000,000 shares of common stock as Registered Securities), and thereafter use all commercially reasonable efforts to cause such Registration Statement relating to the Registered Securities to become effective within five (5) business days after notice from the Securities and Exchange Commission that such Registration Statement may be declared effective, and keep the Registration Statement effective at all times prior to the termination of the Purchase Agreement until the earliest of (i) the date that is three months after the completion of the last Closing Date under the Purchase Agreement, (ii) the date when the Investor may sell all Registered Securities under Rule 144 without volume limitations, or (iii) the date the Investor no longer owns any of the Registered Securities (collectively, the "Registration Period"), which Registration Statement (including any amendments or supplements, thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(b)          Prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and to comply with the provisions of the Securities Act with respect to the disposition of all Registered Securities of the Company covered by the Registration Statement until the expiration of the Registration Period.

 

(c)          With respect to the Registered Securities, upon written request by the Investor, permit counsel designated by Investor to review the Registration Statement and all amendments and supplements thereto a reasonable period of time (but not less than two (2) business days) prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects.

 

(d)          As promptly as practicable after becoming aware of the following facts, the Company shall notify Investor and Investor s legal counsel identified to the Company and (if requested by any such person) confirm such notice in writing no later than one (1) business day thereafter (i): (A) when a prospectus or any prospectus supplement or post-effective amendment to the Registration Statement is filed; (B) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registered Securities or the initiation of any proceedings for that purpose; and (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registered Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose.

 

(e)         Unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, furnish to Investor, promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of the Registration Statement, each preliminary prospectus and the prospectus, and each amendment or supplement thereto;

 

(f)           Use all commercially reasonable efforts to (i) register and/or qualify the Registered Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Investor may reasonably request and in which significant volumes of shares of Common Stock are traded, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof at all times during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualification in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registered Securities for sale in such jurisdictions: provided, however , that the Company shall not be required in connection therewith or as a condition thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (B) subject itself to general taxation in any such jurisdiction, (C) file a general consent to service of process in any such jurisdiction, (D) provide any undertakings that cause more than nominal expense or burden to the Company or (E) make any change in its charter or by-laws or any then existing contracts, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders;

 

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(g)            As promptly as practicable after becoming aware of such event, notify the Investor of the happening of any event of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading ("Registration Default"), and promptly prepare a supplement or amendment to the Registration Statement or other appropriate filing with the SEC to correct such untrue statement or omission, and take any other commercially reasonable steps to cure the Registration Default, and, unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, deliver a number of copies of such supplement or amendment to the Investor as the Investor may reasonably request.

 

(h)          Use its commercially reasonable efforts to secure quotation for such Registered Securities on the OTCQB, OTCQX or OTCPink markets;

 

(i)            Provide a transfer agent for the Registered Securities (the “Transfer Agent”) not later than the Execution Date under the Purchase Agreement;

 

(j)            Cooperate with the Investor to facilitate the timely preparation and delivery of certificates for the Registered Securities to be offered pursuant to the Registration Statement and enable such certificates for the Registered Securities to be in such denominations or amounts as the case may be, as the Investor may reasonably request and registration in such names as the Investor may request; and, within five (5) business days after a Registration Statement which includes Registered Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the Transfer Agent (with copies to the Investor) an appropriate instruction and opinion of such counsel, if so required by the Transfer Agent; and

 

(k)            Take all other commercially reasonable actions necessary to expedite and facilitate distribution to the Investor of the Registered Securities pursuant to the Registration Statement.

  

3.            Obligations of the Investor. In connection with the registration of the Registered Securities, the Investor shall have the following obligations;

 

(a)            It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registered Securities of the Investor that the Investor shall timely furnish to the Company such information regarding itself, the Registered Securities held by it, and the intended method of disposition of the Registered Securities held by it, as shall be reasonably required to effect the registration of such Registered Securities and shall timely execute such documents in connection with such registration as the Company may reasonably request.

 

(b)            The Investor by such Investor s acceptance of the Registered Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder; and

 

(c)            The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2(d)(ii) or (iii) or 2(g) above, the Investor will immediately discontinue disposition of Registered Securities pursuant to the Registration Statement covering such Registered Securities until the Investor receives the copies of the supplemented or amended prospectus contemplated by Section 2(d)(ii) or (iii) or 2(g) and, if so directed by the Company, the Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Investor s possession, of the prospectus covering such Registered Securities current at the time of receipt of such notice.

 

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(d)          The Investor acknowledges and agrees that the maximum amount of shares which may be registered as Registered Securities is not within the control of the Company and the Company does not make any assurances or guarantees that such amount of shares may become registered.

 

4.             Expenses of Registration.   All reasonable expenses incurred in connection with registrations, filings or qualifications pursuant to Section 2 , including, without limitation, all registration, listing, and qualifications fees, printers and accounting fees, the fees and disbursements of counsel for the Company shall be borne by the Company.

 

5.              Indemnification.   After Registered Securities are included in a Registration Statement under this Agreement:

 

(a)            To the extent permitted by law, the Company will indemnify and hold harmless, the Investor, the directors, if any, of such Investor, the officers, if any, of such Investor, each person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act (each, an "Indemnified Person"), against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, "Claims") to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law (the matters in the foregoing clauses (i) through (iii) being collectively referred to as "Violations"). Subject to Section 5(b) hereof, the Company shall reimburse the Investor, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 5(a) shall not (i) apply to any Claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 2(b) hereof; (ii) with respect to any preliminary prospectus, inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registered Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 2(b) hereof; (iii) be available to the extent such Claim is based on a failure of the Investor to deliver or cause to be delivered the prospectus made available by the Company; or (iv) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. The Investor will indemnify the Company, its officers, directors and agents (including legal counsel) against any claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company, by or on behalf of the Investor, expressly for use in connection with the preparation of the Registration Statement, subject to such limitations and conditions set forth in the previous sentence.

 

(b)            Promptly after receipt by an Indemnified Person under this Section 5 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 5, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person, as the case may be; provided , however , that an Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding. In such event, the Company shall pay for only one separate legal counsel for the Investor selected by the Investor. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person under this Section 5, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. The indemnification required by this Section 5 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.

  

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6.               Contribution.   To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 5 to the fullest extent permitted by law; provided , however , that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 5 and; (b) no seller of Registered Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registered Securities who was not guilty of such fraudulent misrepresentation.

 

7.              Reports under Exchange Act. With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees to use its commercially reasonable efforts to:

 

(a)            make and keep public information available, as those terms are understood and defined in Rule 144;

 

(b)            file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act for so long as the Company remains subject to such requirements, and the filing of such reports is required for sales under Rule 144;

 

(c)            furnish to the Investor so long as the Investor owns Registered Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration; and

 

 

(d)          at the request of any Investor of Registered Securities, give its Transfer Agent instructions (supported by an opinion of Company counsel, if required or requested by the Transfer Agent) to the effect that, upon the Transfer Agent s receipt from such Investor of:

 

(i) a certificate (a Rule 144 Certificate ) certifying (A) that such Investor has held the shares of Registered Securities which the Investor proposes to sell (the Securities Being Sold ) for a period of not less than (6) months and (B) as to such other matters as may be appropriate in accordance with Rule 144 under the Securities Act, and

 

(ii) an opinion of counsel acceptable to the Company (for which purposes it is agreed that the initial Investor s counsel shall be deemed acceptable if such opinion is not given by Company counsel) that, based on the Rule 144 Certificate, Securities Being Sold may be sold pursuant to the provisions of Rule 144, even in the absence of an effective Registration Statement, the Transfer Agent is to effect the transfer of the Securities Being Sold and issue to the buyer(s) or transferee(s) thereof one or more stock certificates representing the transferred Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such shares on the Transfer Agent s books and records (except to the extent any such legend or restriction results from facts other than the identity of the Investor, as the seller or transferor thereof, or the status, including any relevant legends or restrictions, of the shares of the Securities Being Sold while held by the Investor). If the Transfer Agent requires any additional documentation at the time of the transfer, the Company shall deliver or cause to be delivered all such reasonable additional documentation as may be necessary to effectuate the issuance of an unlegended certificate.  

 

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8.             Miscellaneous.

 

(a)            Registered Owners. A person or entity is deemed to be a holder of Registered Securities whenever such person or entity owns of record such Registered Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registered Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registered Securities.

  

(b)            Rights Cumulative; Waivers. The rights of each of the parties under this Agreement are cumulative. The rights of each of the parties hereunder shall not be capable of being waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right. Any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right. No act or course of conduct or negotiation on the part of any party shall in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right. Investor acknowledges and agrees that Investor’s sole remedy under this Agreement shall be the Company’s obligations to use commercially reasonable efforts to file the Registration Statement and cause such Registration Statement to become effective as provided herein, and further acknowledges that the Company has not provided any assurances or guarantees that the Registration Statement will become effective.

 

(c)            Benefit; Successors Bound. This Agreement and the terms, covenants, conditions, provisions, obligations, undertakings, rights, and benefits hereof, shall be binding upon, and shall inure to the benefit of, the undersigned parties and their successors.

 

(d)            Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof. There are no promises, agreements, conditions, undertakings, understandings, warranties, covenants or representations, oral or written, express or implied, between them with respect to this Agreement or the matters described in this Agreement, except as set forth in this Agreement and in the other documentation relating to the transactions contemplated by this Agreement. Any such negotiations, promises, or understandings shall not be used to interpret or constitute this Agreement.

 

(e)            Amendment. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investor. Any amendment or waiver affected in accordance with this Section 9 shall be binding upon the Company.

 

(f)            Severability. Each part of this Agreement is intended to be severable. In the event that any provision of this Agreement is found by any court or other authority of competent jurisdiction to be illegal or unenforceable, such provision shall be severed or modified to the extent necessary to render it enforceable and as so severed or modified, this Agreement shall continue in full force and effect.

  

(g)            Notices. Any and all notices or other communications or deliveries to be provided by the Investor hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth below, or such other facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 8(g). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to the Investor at the facsimile number or email address or address of the Investor set forth below. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be:

 

If to the Company:

MyDx, Inc.

6335 Ferris Square

Suite B

San Diego, CA 92121

 

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If to the Investor:

Kodiak Capital Group, LLC

260 Newport Center Drive

Newport Beach, CA 92660

infor@kodiakfunds.com

 

Either party hereto may from time to time change its address or email for notices under this Section 8(g) by giving at least ten (10) days' prior written notice of such changed address to the other party hereto.

 

(h)            Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the Company and the Investor shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. Each of the Company and Investor hereby submit to the exclusive jurisdiction of the United States Federal and state courts located in California with respect to the the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein.

 

(i)            Consents. The person signing this Agreement on behalf of each party hereby represents and warrants that he has the necessary power, consent and authority to execute and deliver this Agreement on behalf of that party.

 

(j)            Further Assurances. In addition to the instruments and documents to be made, executed and delivered pursuant to this Agreement, the parties hereto agree to make, execute and deliver or cause to be made, executed and delivered, to the requesting party such other instruments and to take such other actions as the requesting party may reasonably require to carry out the terms of this Agreement and the transactions contemplated hereby.

 

(k)            Section Headings. The Section headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

(l)            Construction. Unless the context otherwise requires, when used herein, the singular shall be deemed to include the plural, the plural shall be deemed to include each of the singular, and pronouns of one or no gender shall be deemed to include the equivalent pronoun of the other or no gender.

 

(m)            Execution in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by email of a .pdf or telephone line facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. A facsimile transmission or email of a .pdf of this signed Agreement shall be legal and binding on all parties hereto.

 

(n)           Special, Indirect and Other Losses . NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR PUNITIVE DAMAGES OR FOR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER SECTION 5.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

COMPANY:

 

MYDX, INC.

 

By : /s/ Daniel Yazbeck  
  Daniel Yazbeck, CEO  

 

INVESTOR:

 

KODIAK CAPITAL GROUP, LLC

 

By: /s/ Ryan Hodson  
Name: Ryan Hodson  
Title: Managing Director  

 

[-Signature page to Registration Rights Agreement-]

 

 

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Exhibit 10.32

 

NEITHER THIS SECURITY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.

 

ISSUE DATE: February 2, 2016

PRINCIPAL AMOUNT: $50,000

 

MYDX, INC.

 

CONVERTIBLE PROMISSORY NOTE DUE February 2, 2017

 

THIS Note is a duly authorized issuance of $50,000 of MYDX, INC., a Nevada corporation (the "Company") designated as its Note.

 

FOR VALUE RECEIVED, the Company promises to pay to KODIAK CAPITAL GROUP, LLC, the registered holder hereof (the "Holder"), the principal sum of Fifty Thousand Dollars ($50,000) on February 2, 2017 (the “Maturity Date”).  The principal of this Note is payable in United States dollars, at the address last appearing on the Note Register of the Company as designated in writing by the Holder. The Company will pay the outstanding principal amount of this Note in cash on the Maturity Date to the registered holder of this Note.  The forwarding of such wire transfer shall constitute a payment hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer plus any amounts so deducted.

 

This Note is subject to the following additional provisions:

 

1.          The Note is exchangeable for an equal aggregate principal amount of Note of different authorized denominations, as requested by the Holder surrendering the same.  No service charge will be made for such registration or transfer or exchange. This Note may be repaid at any time without any prepayment penalty.

 

2.          The Holder of this Note is entitled any time after August 2, 2016, subject to the following provisions, to convert all or a portion of the principal amount of this Note into shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) at a conversion price for each share of Common Stock equal to the Current Market Price multiplied by fifty percent (50%) (the “Conversion Price”). “Current Market Price” means the average of the three (3) lowest Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.  “Trading Price” means, for any security as of any date, the closing price on the OTC Markets, or applicable trading market (the “OTC Markets”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTCQB is not the principal trading market for such security, the closing price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing price of such security is available in any of the foregoing manners, the average of the closing prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc.  If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the Holder.  “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC Markets, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.   

 

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Conversion shall be effectuated by surrendering the Note to the Company, accompanied by or preceded by email or other delivery to the Company of the form of conversion notice attached hereto as Exhibit A, executed by the Holder evidencing such Holder's intention to convert a specified portion hereof.  No fractional shares of Common Stock or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share.  The date on which notice of conversion is given (the "Conversion Date") shall be deemed to be the date on which the Holder emails or otherwise delivers the conversion notice ("Notice of Conversion"), substantially in the form annexed hereto as Exhibit A , duly executed, to the Company. Certificates representing Common Stock upon conversion will be delivered within one (1) business days from the Conversion Date (“Delivery Date”).

 

The Company shall pay any payments incurred under this Section in immediately available funds upon demand as the Holder’s remedy for such delay.  Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Shares by close of business on the Delivery Date, unless such failure is due to causes beyond the Company’s reasonable control or that of its Transfer Agent, the Holder will be entitled to revoke the relevant Notice of Conversion by delivering a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion; provided, however, that an amount equal to any payments contemplated by this Section which have accrued through the date of such revocation notice shall remain due and owing to the Converting Holder notwithstanding such revocation.  

 

In lieu of delivering physical certificates representing the Shares issuable upon conversion, provided the Company’s Transfer Agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, upon request of the Holder and its compliance with the provisions contained in this paragraph, so long as the certificates therefore do not bear a legend and the Holder thereof is not obligated to return such certificate for the placement of a legend thereon, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.

 

The Holder of the Note shall be entitled to exercise its conversion privilege with respect to the Note notwithstanding the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”).  In the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of such holder’s conversion privilege.  The Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of the conversion of the Note. This Note has been issued subject to investment representations of the original purchaser hereof and may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (the "Act"), and other applicable state and foreign securities laws. In the event of any proposed transfer of this Note, the Company may require, prior to issuance of a new Note in the name of such other person, that it receive reasonable transfer documentation including legal opinions that the issuance of the Note in such other name does not and will not cause a violation of the Act or any applicable state or foreign securities laws. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

  2  

 

  

4.          No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct obligation of the Company.

 

5.          The Holder of the Note, by acceptance hereof, agrees that this Note is being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Note or the shares of Common Stock issuable upon conversion thereof except under circumstances which will not result in a violation of the Act or any applicable state Blue Sky or foreign laws or similar laws relating to the sale of securities.

 

6.          This Note shall be governed by and construed in accordance with the laws of the State of California. Each of the parties consents to the jurisdiction of the federal courts whose districts encompass any part of the City of Newport Beach or the state courts of the State of California sitting in the City of Newport Beach in connection with any dispute arising under this Note and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non coveniens, to the bringing of any such proceeding in such jurisdictions. Each of the parties hereby waives the right to a trial by jury in connection with any dispute arising under this Note.

 

7.          The following shall constitute an "Event of Default":

 

a.          The Company shall default in the payment of principal on this Note and same shall continue for a period of five (5) days; or

 

b.          Any of the representations or warranties made by the Company herein, in any certificate or financial or other written statements heretofore or hereafter furnished by the Company in connection with the execution and delivery of this Note shall be false or misleading in any material respect at the time made; or

 

c.          The Company shall fail to perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or obligation of any Note and such failure shall continue uncured for a period of five (5) days after written notice from the Holder of such failure; or

 

d.          The Company fails to authorize or to cause its Transfer Agent to issue the Shares upon exercise by the Holder through a Notice of conversion in accordance with the terms of this Note, fails to transfer or to cause its Transfer Agent to transfer any certificate for Shares issued to the Holder upon conversion of this Note and when required by this Note, and such transfer is otherwise lawful, or fails to remove any restrictive legend on any certificate or fails to cause its Transfer Agent to remove such restricted legend, in each case where such removal is lawful, as and when required by this Note, and any such failure shall continue uncured for five (5) business days; or

 

e.          The Company shall (1) make an assignment for the benefit of creditors or commence proceedings for its dissolution; or (2) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or

 

f.          A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or

 

g.          Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or

 

  3  

 

  

h.          Any money judgment, writ or warrant of attachment, or similar process in excess of Fifty Thousand ($50,000) Dollars in the aggregate shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of thirty (30) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or

 

i.          Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding; or

 

j.          The Company shall have its Common Stock suspended or delisted from an exchange from trading for in excess of fifteen trading days.

 

Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider all obligations under this Note immediately due and payable within five (5) days of notice, without presentment, demand, protest or notice of any kinds, all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event of Default, the Conversion Price will become the Current Market Price multiplied by twenty percent (20%) (“Default Conversion Price”).

 

8.        The Holder may not convert this Note to the extent such conversion would result in the Holder, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 9.99% of the then issued and outstanding shares of Common Stock held by such Holder after application of this Section.  Since the Holder will not be obligated to report to the Company the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock in excess of 9.99% of the then outstanding shares of Common Stock without regard to any other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the principal amount of Note are convertible shall be the responsibility and obligation of the Holder.  If the Holder has delivered a Conversion Notice for a principal amount of Note that would result in the issuance of in excess of the permitted amount hereunder, without regard to any other shares that the Holder or its affiliates may beneficially own, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion Date and, at the option of the Holder, either retain any principal amount tendered for conversion in excess of the permitted amount hereunder for future conversions or return such excess principal amount to the Holder.  The provisions of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than thirty (30) days prior notice to the Company. Other Holders shall be unaffected by any such waiver.

 

9.        Nothing contained in this Note shall be construed as conferring upon the Holder the right to vote or to receive dividends or to consent or receive notice as a shareholder in respect of any meeting of shareholders or any rights whatsoever as a shareholder of the Company, unless and to the extent converted in accordance with the terms hereof.

 

  4  

 

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized.

 

Dated: February 6, 2016

 

MyDx, Inc.

 

By: /s/ Daniel Yazbeck  
  Daniel Yazbeck, CEO  

 

  5  

 

 

EXHIBIT A - NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal under the Note due February 2, 2017 of MYDX, INC., a Nevada corporation (the “ Company ”), into shares of common stock (the “ Common Stock ”), of the Company according to the conditions hereof, as of the date written below.  If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith.  No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 8 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.

 

Conversion calculations:

Date to Effect Conversion:

Principal Amount of Debenture to be Converted:

Signature:

Name:

Shares to be issued to:

EIN:

Address for Delivery of Common Stock Certificates:

 

Or

 

DWAC Instructions:

Broker No:

Account No:

 

  6  

 

 

February 8, 2016

 

Nevada Agency and Transfer Company

50 W. Liberty Street, Suite 880

Reno, Nevada 89501

 

Re: Irrevocable Transfer Agent Instructions

 

Ladies and Gentlemen:

 

MyDx, Inc., a Nevada corporation (the "Company") and Kodiak Capital Group, LLC (the "Investor") have entered into a Convertible Promissory Note dated as of January 30, 2016 (the "Agreement") in the principal amount of $50,000 (the "Note").

 

You are hereby irrevocably authorized and instructed to reserve 750,000 shares of common stock (“Common Stock”) of the Company for issuance upon full conversion of the Note in accordance with the terms thereof. The amount of Common Stock so reserved may be increased, from time to time, by written instructions of the Company and the Investor. Once the reserve shares have been issued Nevada Agency and Transfer Company shall have no further duty or obligation to issue shares until the reserve has been increased by the Company and the Investor. You are hereby further irrevocably authorized and directed to issue the shares of Common Stock so reserved upon your receipt from the Investor of: (A)(i) a notice of conversion ("Notice of Conversion") executed by the Investor; and (ii) an opinion of counsel of the Investor, in form, substance and scope customary for opinions of counsel in comparable transactions (and satisfactory to the transfer agent), to the effect that the share of Common Stock of the Company issued to the Investor pursuant to the Conversion Notice are not “restricted securities” as defined in Rule 144 and should be issued to the Investor without any restrictive legend; and (B) the number of shares to be issued or position held is less than 9.99% of the total issued common stock of the Company. If the number of shares to be issued to the investor is greater than 4.99% of the total issued common stock of the Company the Transfer Agent will notify the investor via email at info@kodiakfunds.com. You shall have no duty or obligation to confirm the accuracy or the information set forth on the Notice of Conversion. In the event of a stock split (forward or reverse) the reserve should remain unchanged unless instructed otherwise by the Investor and the Company.

 

  7  

 

 

The Company must be participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program in order for the shares to be delivered electronically. The shares to be issued are to be registered in the names of the registered holder of the securities submitted for conversion or exercise. The Transfer Agent shall not be liable for any delay in delivery of shares caused by the Holder’s broker failing to initiate the electronic request in the FAST system.

 

The shares will be issued within three (3) business day upon receipt of the Notice of Conversion and legal opinion. If the Company’s account is at least 30 days past due, the Investor is responsible for the prepaid Transfer Agent transfer and shipping fees. In no event shall the Transfer Agent be required to issue and deliver share certificates without the prior payment of all its fees.

 

The Company and the Investor intend that these instructions require the placement of a restrictive legend on all applicable share certificates unless the requirements listed below are met and the Investor provides the Transfer agent with an acceptable legal opinion stating that share certificates can be issued without a legend. If the instructions or position held exceed 9.99% of the total issued and outstanding the Transfer Agent shall have no duty or obligation to issue shares. So long as you have previously received confirmation from the Company (or Investor counsel) that the shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144 without any restriction and the number of shares to be issued or position held are less than 9.99% of the total issued and outstanding common stock of the Company, such shares should be transferred, at the option of the holder of the Notes as specified in the Notice of Conversion, either (i) electronically by crediting the account of a Prime Broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission system if the Company is a participant or (ii) in certificated form without any legend which would restrict the transfer of the shares, and you should remove all stop-transfer instructions relating to such shares. Until such time as you are advised by Investor counsel that the shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144 without any restriction and the number of shares to be issued or positions held are less than 9.99% of the total issued and outstanding common stock of the Company, you are hereby instructed to place the following legends on the certificates:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF INVESTOR COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

  8  

 

 

The legend set forth above shall be removed and you are instructed to issue a certificate without such legend to the holder of any shares upon which it is stamped, if: (a) such shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 without any restriction and the number of shares to be issued or position held is less than 9.99% of the total issued common stock of the Company, (b) such holder provides the Company and the transfer agent with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions (and satisfactory to the transfer agent), to the effect that a public sale or transfer of such security may be made without registration under the 1933 Act and such sale or transfer is effected. Nothing herein shall be construed to require the Transfer Agent to take any action which would violate state or federal rules, regulations or law. If an instruction herein would require such a violation, such instructions, but not any other term herein, shall be void and unenforceable.

 

The Company shall indemnify and defend you and your officers, directors, principals, partners, agents and representatives, and hold each of them harmless from and against any and all loss, liability, damage, claim or expense (including the reasonable fees and disbursements of its and Transfer Agent’s attorney) incurred by or asserted against you or any of them arising out of or in connection the instructions set forth herein, the performance of your duties hereunderand otherwise in respect hereof, including the costs and expenses of defending yourself or themselves against any claim or liability hereunder, except that the Company shall not be liable hereunder as to matters in respect of which it is judicially determined that you have acted with gross negligence or in bad faith. You shall have no liability to the Company or the Investor in respect to any action taken or any failure to act in respect of this if such action was taken or omitted to be taken in good faith, and you shall be entitled to rely in this regard on the advice of counsel.

 

The Company agrees that in the event that the Transfer Agent resigns, is terminated or removed as the Company's transfer agent, the Company shall engage a suitable replacement transfer agent that will agree to serve as transfer agent for the Company and be bound by the terms and conditions of these Irrevocable Instructions within five (5) business days. The Company and the Investor agree that any action which names the Transfer Agent as a party shall be brought in a court of general jurisdiction in Washoe County, Nevada and no other court.

 

The Investor is intended to be a party to these instructions and are third party beneficiaries hereof, and no amendment or modification to the instructions set forth herein may be made without the consent of the Investor.

 

  9  

 

 

Very truly yours,  
   
MyDx, Inc.  
   
Daniel Yazbeck  
President  
   
Acknowledged and Agreed:  
   
Nevada Agency and Transfer Company  
   
Amanda Cardinalli  
President  
   
Kodiak Capital Group, LLC  
   
Ryan Hodson  
Managing Director  

 

 

10

 

 

Exhibit 99.1

 

MyDx , Inc. Shareholder Update & QA Webcast (Feb 4, 2016) OTCQB:MYDX

 

 

© 201 6 My Dx , Inc. – All Rights Reserved 2 Statements in this presentation that are not descriptions of historical facts are " forward - looking statements " relating to future events , as that term is defined in Section 27 (a) of the Securities Act of 1933 , as amended, and Section 21 (e) of the Securities Exchange Act of 1934 , as amended . Statements may contain certain forward - looking statements pertaining to future anticipated or projected plans, performance and developments, as well as other statements relating to future operations and results . Any statements in this presentation that are not statements of historical fact may be considered to be forward - looking statements . Words such as "may," "will,“ "expect," "believe," "anticipate," "estimate," "intends," "goal," "objective," "seek," "attempt," or variations of these or similar words, identify forward - looking statements . These forward - looking statements by their nature are estimates of future results only and involve substantial risks and uncertainties, including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, successful commercialization of the Company’s products , development of new products, the impact of competitive products or pricing, technological changes, the uncertainty regarding the laws and regulations governing the use and sale of cannabis, the effect of economic conditions , and other uncertainties detailed from time to time in our reports filed with the Securities and Exchange Commission . Except as required by Federal securities law, the Company does not undertake any obligation to release publicly any revisions to any forward - looking statements . This presentation is for informational purposes only . This presentation does not constitute an offer to sell, or a solicitation to purchase, any securities of the Company . Forward - Looking Statements

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Today, there is no quick, easy and affordable way for consumers to test the safety & composition of what they eat, drink and inhale . The Challenge

 

 

© 201 6 My Dx , Inc. – All Rights Reserved © 201 6 My Dx , Inc. – All Rights Reserved ▪ CDx, Inc. is a Science & Technology Company f ounded 2013, Headquarters in San Diego, CA ▪ Mission: Empower consumers to Trust & Verify TM what we put into our minds & bodies . ▪ Developed MyDx ™ (My Diagnostic), the first handheld chemical analyzer for consumers. ▪ Q uick, easy & affordable way for consumers to test the safety & composition of what they eat, drink & inhale . ▪ Raised $7.6m in private equity (Seed, Series A, Series B) over 3 years. ▪ Successfully Developed and Tested 220 Beta Units in the Field for the Cannabis Industry (Feb - Jun 2015) ▪ Completed merger with MyDx , Inc. [OTCQB:MYDX] (May 2015) ▪ CannaDx Product Released (July 2015) ▪ MyDx Named Official Marijuana Analyzer of the Cannabis Community by MassRoots [MSRT], a leading social platform for the cannabis industry – who has over 750,000 grassroots followers (Aug 2015) ▪ MyDx , Inc. Reported First Quarterly Revenues in Q315: $219,180.00 ▪ MyDx Named the Coolest New Product for Cannabis Enthusiasts in the 2016 Cannabis Guide by CannaInsider (Jan 2016) The Solution

 

 

© 201 6 My Dx , Inc. – All Rights Reserved ▪ Our learning algorithms are able to track chemical profiles that work for each patients and leverage that data to predict how an unknown strain will make them feel. ▪ The more you test, the smarter the MyDx algorithm becomes for you.

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Team & Values

 

 

© 201 6 My Dx , Inc. – All Rights Reserved ▪ Daniel Yazbeck is the founder, seed investor and creator of the MyDx Analyzer. ▪ Daniel founded the Yazbeck Consulting & Investment Group in 2007 and is a seasoned entrepreneur and cashflow investor for over 10 years. ▪ Daniel leverages nearly 15 years of experience with Fortune 500, as a Scientist for Pfizer Pharmaceuticals specializing in Chemical R&D technologies, and as a Strategic Market Developer for Panasonic, engineering new products and partnerships for the consumer electronics healthcare industry. ▪ Daniel holds a Master's Degree in Medicinal Chemistry from McGill University with a minor in Marketing, and has co - authored several world patents and research publications . To learn more, please visit: www.yazbeckinvestments.com http ://www.marijuanainvestorsummit.com/speaker/daniel - yazbeck / CEO Profile

 

 

© 201 6 My Dx , Inc. – All Rights Reserved MyDx Solution Components MyDx Sensors Each Sensor is interchangeable and specifically designed for each targeted application. MyDx Analyzer Package The MyDx Analyzer is portable, wireless, and operates quietly to analyze . Includes 1 CannaDx Sensor , 15 Samples Inserts, 1 Year Warranty MyDx Cloud Massive Knowledge Base of MyDx Fingerprints, Total Chemical Profile data, associated with feeling and ailment relief. MyDx Sensor Inserts Replaceable MyDx Sensor Inserts ensure each test is clean with vacuum air connection. MyDx App Available for iOS or Android phones to help operate and track MyDx samples. FREE $699 MyDx Care Package Comprehensive Warranty Extension for 1 - 3 years including unlimited replacement sensors $69 $1.29 - $1.49 $69.99 - $129.99

 

 

© 201 6 My Dx , Inc. – All Rights Reserved © 201 6 My Dx , Inc. – All Rights Reserved ▪ Acting as an Electronic Nose, MyDx is engineered to mimic Nature’s Designs to detect chemicals ▪ MyDx can smell chemicals in the parts per billion level (more sensitive than our nose). ▪ MyDx Leverages technology that has been developed and used for over 15 years ▪ NASA to test air quality for astronauts ▪ Funded by the Bill and Melinda Gates Foundation for TB in Breath ▪ The sample that is placed in the MyDx device is analyzed by an array of sensors exposing chemicals that are present ▪ The MyDx Analyzer Process the Signal ▪ Our Software and Algorithms mimick the human brain to match patterns generated by our sensors with chemicals in our reference database Technology Sampling chemical vapors Human Sense of Smell Conversion to electrical impulse Processing & interpretation Electronic Sense of Smell

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Concentration Dependence Example for Exposure to α - pinene on Channel 16 R 2 = 0.96

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Reproducibility to Limonene at 100 ppm for Channel 4 σ = 4%

 

 

© 201 6 My Dx , Inc. – All Rights Reserved The Untapped Science of Cannabis ▪ There are 400 + chemicals in Cannabis, it's not just about THC . ▪ Most of them fall into three categories : cannabinoids , terpenoids , & flavonoids . ▪ Each of these compounds can modify the therapeutic effects of the plant . ▪ There are hundreds of different chemical combinations, each producing a different effect on different people . ▪ Our CannaDx ™ Application tests cannabis flower for 25 important chemicals of interest, including Cannabinoids and Terpenes and associates them with feelings and ailment relief .

 

 

© 201 6 My Dx , Inc. – All Rights Reserved CannaDx ™ Application

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Cannabis Legalization Status Medical cannabis legalized Cannabis legalized for recreational use No laws legalizing cannabis 14 CannaDx ™ Market Find a Cannabis STRAIN that works for you ▪ The federal government does not yet mandate medical cannabis testing , yet. ▪ Consumers don’t have a standardized universal & practical testing solution today. ▪ Projected market forecasts are increasing: • 27 medical compassionate states • 5, including DC, adult use states • Grew 74% to 2.7 Bn 2014. $10.8Bn by ‘18 State Cannabis Laws Map 1 $2B $3 $5 $7 $8 $10B 2013 2014E 2015E 2016E 2017E 2018E Series 1 1) Governing The States and Localities, Nov 2014 2) ArcView Market Research; Nov 2013 3) http ://www.canorml.org/RingTestOShaughnessys_Aut11. pdf 4) Marijuana Business Factbook 2015 U.S. Medical Cannabis Market2

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Get Information Seek Recommendation Capture Experience Analyze Strains 10 Key Features for CannaDx

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Analyze Strains + Capture Experience

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Seek Recommendation

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Get Information & Personalize Experience

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Email & Print Certificate of Analysis Recalibrate Results View Nearest Chemical Profiles MyDx Latest Features

 

 

© 201 6 My Dx , Inc. – All Rights Reserved EXPERIMENT 1. One strain of Cannabis Flower (Girl Scout Cookies) was purchased from a local dispensary in San Diego. 2. 500 mg of the same sample was provided to our local testing lab for analysis via Gas Chromatography. 3. Approximately 40 - 50 mg of flower sample was ground against the rim of a MyDx Sample Insert and filled to the Brim. 4. Step 3 was repeated 10 times with 10 Sample Inserts. 5. The MyDx Software was used to measure 10 Samples across 10 Different Devices and Sensors 6. The MyDx Total Canna Profile Signatures generated were processed via our signal processing and algorithm software. Consistency and Accuracy Data CannaDx Sensor Target Relative Accuracy : 80 % or more Target Consistency: 20 % or less GC Lab Reference Population Data Average MyDx Consistency Average MyDx Relative Accuracy Min Range Max Range # Tests within 80% Accuracy Total Tests THC 7.79% 83.70% 11.74 23.78 985 1571 CBD 107.73% 42.26% 0.039 2.263 201 1571 CBN 33.55% 60.10% 0.045 0.324 321 1571 Beta Caryophelene 25.33% 63.77% 0.239 1.216 458 1932

 

 

© 201 6 My Dx , Inc. – All Rights Reserved The MyDx Data Portal www.mydxprofile.com

 

 

© 201 6 My Dx , Inc. – All Rights Reserved ▪ MyDx Team is currently analyzing Crowdsourced Data for possible chemical profiles that can be formulated into product. ▪ Goal is to share findings with Scientific Community ▪ Goal is to find a partner to validate and license data for product formulations

 

 

© 201 6 My Dx , Inc. – All Rights Reserved 23 CannaDx – Empowering an Industry Manufacturers • Know what you’re growing • Optimize plant growth conditions • Enjoy more profits from better quality product Distributers • Know what you are buying and selling • Capture real - time quality control at the POS • Track buying/selling history and sources Consumers • Know what you are putting in your body • Test the safety and Potency (%THC, CBD, etc) • Find the best strain that works for you Regulators • Know what you’re tracking • Track production lots with “chemical fingerprint” • Consumer Grade (Mothers)

 

 

© 201 6 My Dx , Inc. – All Rights Reserved 24 Sales Model Overview Web Sales Conferences & Tradeshows Distribution Channel Partners ▪ Over 60 distribution prospects ▪ Chosen Distributors (TBA) Recent: ▪ New West Summit ▪ MMJ Investor Summit ▪ Emerald Scientific Conference ▪ Emerald Cup ▪ Blazer’s Cup Upcoming: ▪ High Times Cannabis Cup (This Weekend) ▪ CannaTech Israel (March) ▪ MyDx Affilate Marketing Portal ( www.mydxstore.com/affiliate ) ▪ Google SEO #1 Ranked for Cannabis Tester . ▪ MassRoots (29,000 Followers) ▪ Leafly ▪ Social Media Engagement (167,000+ Followers)

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Leafly Advertising Example

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Recent Media Mentions

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Headquarter Facilities Update

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Manufacturing Update MyDx has graduated from a New Product Introduction (NPI) Manufacturing Line to a Full Production Line at our contract manufacturing facilities in Fremont, CA. We have streamlined our fulfillment capabilities and are ready to scale.

 

 

© 201 6 My Dx , Inc. – All Rights Reserved ▪ MyDx, Inc . Intellectual Property : CDx IP Covers the rights to a family of 4 pending application patents to detect chemicals in solids liquids , and gases and outline a novel method for drug development, preparation & administration that bypass es preclinical validation by going directly to the consumer . ▪ Licensed IP : Ongoing Exclusive Worldwide License (Cannabis field of use) from Next Dimension Technologies, Inc . to over 30 issued patents that cover all aspects of their commercial conducting polymer based sensor array technology . The company’s key patents protect the composition of the sensors, the sensor manufacturing processes, sensor substrate design, data analysis routines, and use of the sensors in a broad range of applications . ▪ Trade Secret : Development partner will manufacture disposable sensors in California and maintain it as a trade secret and will provide option for Can n aDx to outsource if they cannot deliver on price/quality requirements outlined in our agreement . IP Protection

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Proof of Concept Development Commercialization (Product & Market) Seed Financing Product Proof of Concept Market Proof of Concept x 2013: FOUNDATION ESTABLISHED  Seed Funding Secured from Yazbeck Group ($210,000)  Prepared product and market for crowdfunding campaign  Strategic Partners secured for both R&D and Market  Intellectual property portfolio established Series A Financing MyDx Product Development CannaDx Market Development Next Generation International Market & Sales Expansion New Core T echnology D evelopment New Applications Development Next Gen Products x 2014: PRODUCT DEVELOPED  Crowdfunding Launched Jan 2014 (220+ Pre - Orders)  Series A Preferred: Closed April 2014 ($600,000)  Convertible Notes: Closed September 2014 ($2M)  Developed MyDx Canna Beta Product  Manufactured MyDx Canna Beta Product  Expand IP Portfolio Manufacturing Supply Chain Sales and Marketing Distribution Channels Next Gen Sensor Development ( Organa / Canna+) STAGE FOCUS RESULTS x 2015: PRODUCT RELEASED  2/15 – Shipped 220 MyDx Beta Pre - Paid Units  3/15 - Series B Preferred ($4.8M)  5/15 - Completed Reverse Merger [OTCQB:MYDX]  7/15 - MyDx Canna Product Released  8/15 – Organa Preliminary R&D Completed  9 /15 – Company Reorganization (R&D To Revenue)  11/15 – Reported $219K+ in Revenues for Q315 2016+: GROWTH □ Global Market Footprint □ Spinout Verticals 30 4 Year Business Plan Status

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Reduction in Burn Analysis (As of Dec 31, 2015) - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 1 2 3 4 5 6 7 8 9 10 11 12 Total Revenue & Expense Total Expense Total Revenue Month in 2015 x Successfully decreased our monthly expenses by over 50% over the last 6 months. ▪ 9/30 Balance Sheet (per Q3 Financials): $124,075 Cash Remaining

 

 

© 201 6 My Dx , Inc. – All Rights Reserved MyDx Capital Options 1. 9/2015 - Launched $2M Equity Financing Round  Terms: $1.10 + 1:1 Warrant Coverage  Current stock Price does not support this pricing. 2. 9/2015 - Yazbeck Investments Credit Line  MyDx Issued $250,000 Credit Line from Yazbeck Investments. 3. 12/2015 - Convertible Debt (“Hard Money”)  $50K Kodiak Capital  $100K Adar Bay  $100K Union Capital  Access to similar notes from various sources 4. 2/2016 – Kodiak Registered Offering Equity Term Sheet Signed  $1M of Company Securities to be Purchased, at the discretion of MyDx , at a 30% d iscount to 5 day trading Price  Accessible approximately March 2016 (requires registering of shares in an S1/A) 5. 2/2016 - Manufacturing Line of Credit (To B e Announced)  Fund MyDx 2 Development and Future Supply C hain 6. Analysis Phase: Warrant Discount Exercise  Series B holders may be given the right to exercise their warrants at a discounted rate within a limited time  Reduce overall c ost basis  Secures non - dilutive cash to the company  Email Jotti@cdxlife.com if you are interested.

 

 

© 201 6 My Dx , Inc. – All Rights Reserved S1 Effectiveness ▪ Natural Amendment Process ▪ Down to a few comments ▪ Expect to be on file with an amendment within a week ▪ Expect to be effective shortly thereafter ▪ Includes the registration of shares underlying the warrants ▪ Shareholders  Find a brokerage firm to deposit your shares from NATCO

 

 

© 201 6 My Dx , Inc. – All Rights Reserved $80B $97 $113 $129 $145 $162B 2013 2014E 2015E 2016E 2017E 2018E Global Organic Food & Beverage Market 1 The OrganaDx ™ sensor will initially test for the most common pesticides linked to Cancer A booming industry: The global organic food & beverage market is expected to grow from $80B in 2013 to $162B by 2018 – 15% Compounded Annual Growth Rate (CAGR) 1 Over 10% of fruits & vegetables in the U.S. are sold as “O rganic ” 2 1) Reportlinker.com; June 2014 2) Organic Trade Association - OTA’s 2014 Organic Industry Survey Test what you EAT for organic properties OrganaDx™

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Diazinon 333-41-5 Apple (0.5 PPM); Celery (0.7 PPM); Spinach (0.7 PPM); Potato (0.1 PPM); Peach (0.2 PPM); Nectarine (0.2 PPM); Pepper (0.5 PPM); Cucumber (0.75 PPM); Tomato (0.75 PPM) Cannabis March 2015 WHO REPORT: Diazinon , Glyphosate and Malathion Classified as Carcinogenic linked to Cancer Diazinon (Insecticide) • Estimated upper limit of detection is ~100 ppb in the vapor phase • EPA tolerance levels in produce range from 0.2 – 0.75 ppm x Estimated MyDx upper limit of detection is ~100 ppb in the vapor phase • EPA tolerance levels in produce range from 0.2 – 0.75 ppm OrganaDx™

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Canna+ Sensor Development Residual Solvents Testing in Cannabis Oil

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Test what you DRINK for harmful chemicals The AquaDx ™ sensor will test for contaminants found in your water Example: Bisphenol - A (BPA), used in the construction of water delivery pipes, are not even on the list of those regulated by the Safe Drinking Water Act 1 New York Times reported that the water for 49M + U.S. citizens contained illegal concentrations of arsenic , uranium , and bacteria . 1) Drinking Dirty Water: Is America’s Water Safety In Jeopardy?; Mar 2013 AquaDx™ Do you know what’s in your Water?

 

 

© 201 6 My Dx , Inc. – All Rights Reserved AeroDx™ Test what you INHALE for air quality The AeroDx ™ sensor will measure elements of th e E.P.A. air quality index by monitoring certain chemicals in the air Indoor & outdoor air quality testing U.S. indoor air quality equipment market is expected to grow from to $5.8B by 2019 (7% CAGR) 2 1) U.S. Consumer Product Safety Commission 2) BCC Research, Sept 2014 $4B $4 $5 $5 $5 $6B 2014E 2015E 2016E 2017E 2018E 2019E U.S. Indoor Air Quality Equipment Market2

 

 

© 201 6 My Dx , Inc. – All Rights Reserved Key Takeaway We are here to empower people to live a healthier life by creating a practical way for consumers to test & understand the chemicals & effects of what they eat, drink & inhale .

 

 

© 201 6 My Dx , Inc. – All Rights Reserved MyDx , Inc. Daniel Yazbeck 6335 Ferris Square, Suite B San Diego, CA 92121 Tel (800) 814 - 4550 daniel@ cdxlife.com www.cdxlife.com For more Investor Related Information, including SEC Filings, please visit ir.cdxlife.com Thank you.