UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 22, 2019

 

IIOT-OXYS, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   000-50773   56-2415252
(State or Other Jurisdiction   (Commission File   (I.R.S. Employer
of Incorporation)   Number)   Identification Number)

 

705 Cambridge Street

Cambridge, MA 02141

(Address of principal executive offices, including zip code)

 

(617) 500-5101

(Registrant’s telephone number,

including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒       

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

     

 

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

On January 22, 2019, IIOT-OXYS, Inc., a Nevada corporation (the “ Company ”), entered into a Securities Purchase Agreement (the “ SPA ”) with Cambridge MedSpace, LLC, a Massachusetts limited liability company (the “ Lender ”), for the purchase of a 5% Secured Convertible Note in the principal amount of $55,000 (the “ Note ”). The Note is convertible, in whole or in part, into shares of the Company’s Common Stock, at any time at a rate of $0.65 per share with fractions rounded up to the nearest whole share, unless paid in cash at the Company’s election. The Note bears interest at a rate of 5% per annum and interest payments will be made on an annual basis. The Note matures January 22, 2020.

 

The Note is governed by the SPA and is secured by all the assets of the Company (but is not a senior secured note) pursuant to the Security Agreement. In addition to the issuance of the Note, the Company issued to the Lender warrants to purchase one share of the Company’s Common Stock for 50% of the number of shares of Common Stock issuable upon conversion of the Note (the “ Warrants ”). Each Warrant is immediately exercisable at $0.75 per share and expires on January 22, 2024.

 

The Note, SPA, Security Agreement, and the Warrant Agreement are attached hereto as Exhibits 99.1, 99.2, 99.3, and 99.4, respectively.

 

The Lender is owned by shareholders of the Company, or their affiliates, including Cliff Emmons, the Company’s Chief Executive Officer.

 

Item 7.01 Regulation FD Disclosure.

 

On January 23, 2019, the Company issued a shareholder letter which provides updates to shareholders on prior and future operations. A copy of the shareholder letter is attached hereto as Exhibit 99.5 and is incorporated herein by reference. Pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), the information in this Item 7.01 disclosure, including Exhibit 99.5 and the information set forth therein, is deemed to have been furnished to, and shall not be deemed to be “filed” with, the SEC.
 
The shareholder letter may contain forward-looking statements. Such forward-looking statements are based on information presently available to the Company’s management and are current only as of the date made. Actual results could also differ materially from those anticipated as a result of a number of factors, including, but not limited to, those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, and subsequent reports filed by the Company with the Securities and Exchange Commission (the “Commission”). For those reasons, undue reliance should not be placed on any forward-looking statement. The Company assumes no duty or obligation to update or revise any forward-looking statement, although it may do so from time to time as management believes is warranted or as may be required by applicable securities law. Any such updates or revisions may be made by the registrant by filing reports with the Commission, through the issuance of press releases or by other methods of public disclosure.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits.

 

Exhibit No. Description
99.1 Securities Purchase Agreement with Cambridge MedSpace, LLC dated January 22, 2019
99.2 5% Convertible Secured Note with Cambridge MedSpace, LLC dated January 22, 2019
99.3 Security Agreement with Cambridge MedSpace, LLC dated January 22, 2019
99.4 Warrant Agreement with Cambridge MedSpace, LLC dated January 22, 2019
99.5 Shareholder Letter dated January 23, 2019

 

 

 

 

 

 

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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 hereunto duly authorized.

 

  IIOT-OXYS, Inc.
   
Date: January 23, 2019 By: /s/ Cliff L. Emmons
    Cliff L. Emmons, Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 99.1

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (the “ Agreement ”) is made as of January 22, 2019 (the “ Effective Date ”) by and among IIOT-OXYS, Inc., a Nevada corporation (the “ Company ”), and Cambridge MedSpace, LLC, a Massachusetts limited liability company (the “ Purchaser ”). Any capitalized term not otherwise defined herein shall have the meaning set forth for such term in the Note or Warrant (defined below).

 

RECITALS

 

WHEREAS , the Purchaser desires to purchase from the Company and the Company desires to sell the Note and Warrant to the Purchaser on the terms and conditions described herein.

 

AGREEMENT

 

NOW, THEREFORE , in consideration of the foregoing, and the representations, warranties, covenants and conditions set forth below, the Company and the Purchaser, intending to be legally bound, hereby agree as follows:

 

1.               AMOUNT AND TERMS OF THE NOTE . Subject to the terms of this Agreement, at the Closing (as defined below) the Company agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company, a secured convertible promissory note in the form attached to this Agreement as Exhibit A (the “ Note ”) in the principal amount set forth on the Purchaser’s signature page hereto (the “ Loan Amount ”). The principal amount of all Note shall be Fifty-Five Thousand Dollars ($55,000).

 

2.               WARRANTS . Subject to the terms of this Agreement, at Closing (as defined below) the Company agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company, a Warrant registered in the name of the Purchaser with an exercise price per share of $0.75, and to purchase up to a number of Common Shares of the Company equal to 50% of the number of shares of the Company’s Common Stock issuable upon conversion of the Note in the form attached to this Agreement as Exhibit C (the “ Warrant ”); provided, however, if the Event of Default (as defined in the Note) occurs and is not cured, the Warrant coverage shall increase from 50% to 100%.

 

3.                COLLATERAL . Pursuant to the Security Agreement in the form attached hereto as Exhibit B (the “ Security Agreement ”), the Company shall grant to the Purchaser a security interest in all Collateral (as defined in the Security Agreement) to secure all the Company’s obligations under the Note.

 

4.                USE OF PROCEEDS . The Company shall use the net proceeds from the sale of the Notes and Warrants solely for operations.

 

5.               THE CLOSING .

 

5.1              Closing Date. The closing of the sale and purchase of the Note and Warrants (the “ Closing ”) shall be held on the Effective Date or upon such later date when all of the deliveries required by Section 5.2 below have been made by the applicable parties hereto.

 

5.2              Delivery. At the Closing, (i) the Purchaser will deliver to the Company a wire transfer of funds in the amount of the Loan Amount according to the wire instructions attached hereto as Exhibit D , along with the Purchaser’s execution of the Security Agreement and the Warrant; and (ii) the Company will issue and deliver to the Purchaser (a) a Note executed by the Company in favor of the Purchaser payable in the amount of the Loan Amount, and (b) the Company’s execution of the Security Agreement and Warrant.

 

6.               REPRESENTATIONS AND WARRANTIES OF THE COMPANY . The Company hereby represents and warrants to the Purchaser, as of the date of Closing, as follows:

 

6.1              Organization, Good Standing and Qualification . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.

 

 

 

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6.2              Corporate Company Power . The Company has all requisite corporate power to execute and deliver this Agreement, the Note, the Warrant, the Security Agreement and any other related documentation (collectively, the “ Loan Documents ”) and to carry out and perform its obligations under the Loan Documents.

 

6.3              Authorization. All corporate action on the part of the Company necessary for the authorization, execution, delivery and performance of the Loan Documents by the Company and the performance of the Company’s obligations thereunder has been properly taken. The Loan Documents, when executed and delivered by the Company, will constitute valid and binding obligations of the Company enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws.

 

6.4              Consents and Approvals . The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other third party in connection with the execution, delivery and performance by the Company of the Loan Documents, other than the filing of Form D with the Securities and Exchange Commission (the “ Commission ”) and such filings as are required to be made under applicable state securities laws.

 

6.5              Offering. Assuming the accuracy of the representations and warranties of the Purchaser contained in Section 7 hereof, the offer, issue, and sale of the Note are and will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit, or qualification requirements of all applicable state securities laws.

 

7.               REPRESENTATIONS AND WARRANTIES OF THE PURCHASER .

 

7.1              Acceptance by the Company . The Purchaser acknowledges that the Loan Amount may be accepted or rejected, in whole or in part, by the Company in its sole discretion. The Company shall have no obligation to sell the Note and the Warrant to the Purchaser unless and until this Agreement is executed and delivered by the Purchaser and accepted by the Company and the Company has received the Loan Amount.

 

7.2              Purchase for Own Account . The Purchaser represents that it is acquiring the Note and Warrant solely for the Purchaser’s own account and beneficial interest for investment and not for sale or with a view to distribution of the Note, the Warrant, or any part thereof, has no present intention of selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the same, and does not presently have reason to anticipate a change in such intention. The Purchaser understands and acknowledges that the Note, the Warrant, and the shares underlying the Warrant (the “ Warrant Shares ”) are not registered under the Securities Act or any state securities laws. The Purchaser understands that the offering and sale of the Note and Warrant is intended to be exempt from registration under the Securities Act, by virtue of Rule 506(b) of Regulation D as promulgated by the Commission thereunder, based, in part, upon the representations, warranties and agreements of the Purchaser contained in this Agreement and neither the Commission nor any state securities commission or other regulatory authority has approved the Note or the Warrant or passed upon or endorsed the merits of the offering of the Note and the Warrant.

 

7.3              Information and Sophistication . The Purchaser hereby: (i) acknowledges that the Purchaser has received and carefully reviewed all the information the Purchaser has requested from the Company and considers necessary or appropriate for deciding whether to acquire the Note and the Warrant, (ii) represents that the Purchaser’s representatives and advisors have had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Note and the Warrant and to obtain any additional information necessary to verify the accuracy of the information given the Purchaser, (iii) represents that the Purchaser is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, including, except for representations contained in this Agreement and statements expressly authorized by the Company to be made to the Purchaser under an obligation of confidentiality on the part of the Purchaser, and (iv) further represents that the Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risk of this investment.

 

 

 

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7.4              Ability to Bear Economic Risk . The Purchaser acknowledges that an investment in the Note and Warrant involves a high degree of risk, and represents that the Purchaser is able, without materially impairing the Purchaser’s financial condition, to hold the Note and Warrant for an indefinite period of time and to suffer a complete loss of the Purchaser’s investment.

 

7.5              Accredited Investor Status. The Purchaser represents and warrants that such Purchaser is an “accredited investor” as such term is defined in Rule 501 under the Securities Act as of the Effective Date.

 

7.6              General Solicitation . The Purchaser represents that the Purchaser is not purchasing the Note and Warrant as a result of any advertisement, article, notice or other communication regarding the Note and Warrant published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

7.7              Not Senior Secured . The Purchaser acknowledges and understands that, as of the Effective Date, the Company has debt that is in a senior secured position and, in the event of a liquidation of the Company’s assets, the senior secured lender would be in a first position ahead of that of the Purchaser.

 

8.               MISCELLANEOUS .

 

8.1              Binding Agreement . The terms and conditions of this Agreement will inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

8.2              Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THE COMPANY AND THE PURCHASER HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF MASSACHUSETTS SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE PURCHASER, ON THE ONE HAND, AND COMPANY, ON THE OTHER HAND, PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT.

 

8.3              Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

8.4              Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

8.5              Further Actions. The Company will execute and deliver such other agreements, conveyances, and other documents, and take such other action, as may be reasonably requested by the Purchaser in order to give effect to the transactions contemplated by this Agreement and the other Loan Documents.

 

8.6              Notices . All notices required or permitted hereunder will be in writing and will be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by electronic mail or facsimile with confirmation of receipt or transmission if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications will be sent to the Company at 705 Cambridge Street, Cambridge, Massachusetts 02141, Attn: Cliff Emmons and to Purchaser at the address(es) set forth on the Purchaser’s signature page or at such other address(es) as the Company or Purchaser may designate by ten (10) days advance written notice to the other parties to this Agreement.

 

 

 

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8.7              Modification; Waiver . No modification or waiver of any provision of this Agreement or consent to departure therefrom will be effective unless in writing and approved by the Purchaser and the Company.

 

8.8              Expenses. The Company and the Purchaser will each bear its respective expenses and legal fees incurred with respect to the Loan Documents and the transactions contemplated thereby. If any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated under the Loan Documents, the prevailing party shall recover all such party’s costs and attorneys’ fees incurred in each such action, suit, or other proceeding, including any and all appeals or petitions from such action, suit or other proceeding.

 

8.9              Delays or Omissions. The parties agree that no delay or omission to exercise any right, power or remedy accruing to the Purchaser, upon any breach or default of the Company under this Agreement will impair any such right, power or remedy, nor will it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of or in any similar breach or default thereafter occurring; nor will any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by the Purchaser of any breach or default under this Agreement, or any waiver by the Purchaser of any provisions or conditions of this Agreement must be in writing and will be effective only to the extent specifically set forth in writing and that all remedies, either under this Agreement, or by law or otherwise afforded to the Purchaser will be cumulative and not alternative.

 

8.10           Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

 

8.11           Entire Agreement. This Agreement, the exhibits to this Agreement and the other Loan Documents constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party will be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements except as specifically set forth in this Agreement.

 

8.12           Reliance on Counsel and Advisors . The Purchaser acknowledges that counsel of the Company is only counsel to the Company and shall not be deemed to be counsel to the Purchaser in this transaction. The Purchaser acknowledges that the Purchaser has had the opportunity to review this Agreement, including all attachments hereto, and the transactions contemplated by this Agreement with the Purchaser’s own legal counsel, tax advisors and other advisors. The Purchaser is relying solely on the Purchaser’s own counsel and advisors and not on any statements or representations of the Company’s counsel for legal or other advice with respect to this investment or the transactions contemplated by this Agreement.

 

7.13.         No Commitment for Additional Investment. The Company acknowledges and agrees that the Purchaser has not made any representation, undertaking, commitment or agreement to provide or assist the Company in obtaining any financing, investment or other assistance, other than the purchase of the Note and Warrant as set forth herein and subject to the conditions set forth in herein. In addition, the Company acknowledges and agrees that, except as set forth in this Agreement, (a) no statements, whether written or oral, made by the Purchaser or its representatives on or after the date of this Agreement shall create an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment, (b) the Company shall not rely on any such statement by the Purchaser or the Purchaser’s representatives and (c) an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment may only be created by a written agreement, signed by the Purchaser and the Company, setting forth the terms and conditions of such financing or investment and stating that the parties intend for such writing to be a binding obligation or agreement.

 

The Purchaser shall have the right, in the Purchaser’s sole and absolute discretion, to refuse or decline to participate in any other financing of or investment in the Company and shall have no obligation to assist or cooperate with the Company in obtaining any financing, investment or other assistance.

 

7.14.         Signatures. It is hereby agreed that the execution by the Purchaser of this Agreement, in the place set forth herein, will constitute the agreement by the Purchaser to be bound by the terms of the Agreement.

 

[SIGNATURE PAGE FOLLOWS.]

 

 

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IN WITNESS WHEREOF, the parties have executed this SECURITIES PURCHASE AGREEMENT as of the date first written above.

 

  COMPANY:
   
  IIOT-OXYS, INC.
   
   
   
  By: /s/ Karen McNemar
             Karen McNemar, Chief Operating Officer
   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SECURITIES PURCHASE AGREEMENT PURCHASER SIGNATURE PAGE

 

IN WITNESS WHEREOF, the parties have executed this SECURITIES PURCHASE AGREEMENT as of the date first written above.

 

  PURCHASER:
   
  CAMBRIDGE MEDSPACE, LLC
   
   
   
  By: /s/ Giro DiBiase
         Giro DiBiase, Managing Member

 

Dated as of: January 22, 2019

 

Loan Amount: $55,000

 

Address for Notice:

 

________________________

________________________

________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

FORM OF CONVERTIBLE PROMISSORY NOTE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT B

 

FORM OF SECURITY AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT C

 

FORM OF WARRANT AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT D

 

WIRE INSTRUCTIONS

 

[NAME OF BANK]  
[BANK ADDRESS]  
PHONE NUMBER: ____
ABA NUMBER: ____
ACCT. NUMBER: ____
BENEFICIARY: ____

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 99.2

 

 

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, ENCUMBERED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IIOT-OXYS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED OR SUCH TRANSACTION COMPLIES WITH RULES PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE ACT.

 

IIOT-OXYS, INC.

5% SECURED CONVERTIBLE PROMISSORY NOTE

 

Issue Date: January 22, 2019   $55,000

 

FOR VALUE RECEIVED, IIOT-OXYS, INC., a Nevada corporation (the “ Borrower ”), hereby promises to pay to Cambridge MedSpace, LLC, a Massachusetts limited liability company (the “ Holder ”), or the Holder’s assigns or successors in interest, the principal amount of Fifty-Five Thousand Dollars ($55,000) (the “ Principal Amount ”), together with interest thereon. This note is issued as of the “ Issue Date ” set forth above (the “ Note ”) issued pursuant to the same form of the Securities Purchase Agreement to which this form of Note is attached as Exhibit A (the “ Purchase Agreement ”) to the person executing such Agreement or their assigns (the “ Holder ”).

 

1. INTEREST AND PAYMENT .

 

1.1               Interest Rate . Interest payable on this Note shall accrue from the Issue Date at a rate of five percent (5%) per annum (the “ Interest Rate ”), calculated on the basis of a 365-day year.

 

1.2               Maturity Date . The outstanding principal of this Note (the “ Outstanding Principal ”) together with any accrued and unpaid interest thereon (the “ Outstanding Interest ”), shall all be due and payable on January 22, 2020 (the “ Maturity Date ”).

 

1.3               Interest Payments . Interest payments shall be due and payable annually on each one-year anniversary of the Issue Date.

 

1.4               Optional Prepayment in Cash . The Borrower may prepay this Note at any time without penalty. The Borrower shall provide the Holder with ten (10) days’ prior written notice of its intention to prepay this Note, and the Holder shall have such ten (10) day period in which to exercise its right to convert this Note pursuant to Section 2 hereof. In the event the Holder does not convert this Note within such ten (10) day period, then the Borrower shall have the option of prepaying any Outstanding Principal and Outstanding Interest, without premium or penalty.

 

1.5               Maximum Payments . Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

 

 

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1.6               Payment on Non-Business Days . Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of Nevada, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of Outstanding Interest payable on such date.

 

1.7               Replacement . Upon receipt of a duly executed, notarized and unsecured written statement from the Holder with respect to the loss, theft or destruction of this Note (or any replacement hereof) and a standard indemnity, or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Borrower shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

 

2. CONVERSION .

 

2.1               Voluntary Conversion . Subject to and in compliance with, the provisions contained herein, the Holder is entitled, at its option, at any time prior to the Maturity Date, to convert the Outstanding Principal of this Note plus all unpaid and accrued Outstanding Interest payable under this Note from the Issuance Date, into fully paid and nonassessable shares of Common Stock of the Borrower (the “ Shares ”). Such conversion shall be effected at the rate equal to the lesser of (i) $0.65 per Share; or (ii) the lowest price of any convertible debt or equity funding commenced by the Borrower after the Issue Date. No fractions of Shares will be issued upon conversion.

 

2.2               Mechanics and Effect of Conversion . In order to exercise the voluntary conversion provided by Section 2.1 above, the Holder shall submit a complete and executed copy of the Notice of Conversion to the Borrower. The Note the Holder shall also deliver to the Borrower the original executed Note as a condition to receiving a certificate or certificates evidencing the securities issued to the Holder pursuant to the voluntary conversion provided by Section 2.1 above.

 

3.            Security Agreement . This Note is secured in accordance with the terms of the Security Agreement attached to the Purchase Agreement as Exhibit B (the “ Security Agreement ”) and, in accordance therewith, is junior to the Borrower’s senior secured indebtedness (the “ Senior Secured Debt ”), including, without limitation, any currently outstanding indebtedness to Sergey Gogin or his assigns. The Holder hereby expressly and unconditionally agrees that upon conversion of this Note pursuant to Sections 2.1 and 2.2 herein, the Holder’s security interest under the Security Agreement shall terminate in its entirety and the Holder shall then file, without any action on the part of Borrower required, a UCC-3 termination statement in such jurisdiction(s) as the Borrower shall deem necessary or appropriate.

 

4. EVENTS OF DEFAULT .

 

The occurrence of any of the following events is an “ Event of Default ”:

 

(a)                Failure to Pay Principal, Interest or other Fees . The Borrower fails to pay the Outstanding Interest when it comes due or the Outstanding Principal on the Maturity Date and such failure shall continue for a period of thirty (30) days following the date upon which any such payment was due.

 

(b)                Breach of Covenant . The Borrower breaches any covenant or other term or condition of this Note, and such breach continues for a period of thirty (30) days after the occurrence thereof.

 

(c)                Receiver or Trustee . The Borrower shall make an assignment for the benefit of creditors or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

 

(d)                Bankruptcy . Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower.

 

 

 

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Upon the occurrence and continuance of an Event of Default beyond any applicable grace period, the Holder may make all sums of Outstanding Principal, Outstanding Interest and other fees then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable. If, with respect to any Event of Default, the Borrower cures the Event of Default, the Event of Default will be deemed to no longer exist and any rights and remedies of the Holder pertaining to such Event of Default will be of no further force or effect. Payments shall be applied first to Outstanding Interest and then to any Outstanding Principal balance of this Note.

 

5.             Maximum Rate of Interest . Notwithstanding any provision of this Note or the Purchase Agreement to the contrary, the Borrower shall not be obligated to pay Outstanding Interest pursuant to this Note in excess of the maximum rate of interest permitted by the laws of any state determined to govern this Note or the laws of the United States applicable to loans in such state. If any provisions of this Note shall ever be construed to require the payment of any amount of Outstanding Interest in excess of that permitted by applicable law, then the Outstanding Interest to be paid pursuant to this Note shall be held subject to reduction to the amount allowed under applicable law and any sums paid in excess of the interest rate allowed by law shall be applied in reduction of the principal balance outstanding pursuant to this Note. The Holder acknowledges that the laws of the State of Nevada will govern the maximum rate of interest that it is permissible for Holder to charge the Borrower pursuant to this Note.

 

6.            ADJUSTMENTS FOR REORGANIZATION, MERGER, CONSOLIDATION OR SALES OF ASSETS . If at any time or from time to time after the issuance date of the Note there shall be a capital reorganization of the Borrower (other than by way of a stock split or combination of shares or stock dividends or distributions, or a reclassification, exchange or substitution of shares), or a merger or consolidation of the Borrower with or into another corporation where the holders of the Borrower’s outstanding voting securities prior to such merger or consolidation do not own over 50% of the outstanding voting securities of the merged or consolidated entity, immediately after such merger or consolidation, or the sale of all or substantially all of the Borrower’s properties or assets to any other person (an “ Organic Change ”), then as a part of such Organic Change an appropriate revision to the conversion price shall be made if necessary and provision shall be made if necessary (by adjustments of the conversion price or otherwise) so that, upon any subsequent conversion of the Note, the Holder shall have the right to receive, in lieu of Shares, the kind and amount of shares of stock and other securities or property of the Borrower or any successor corporation resulting from the Organic Change. In any such case, appropriate adjustment shall be made in the application of the provisions of Section 2 with respect to the rights of the Holder after the Organic Change to the end that the provisions of Section 2 (including any adjustment in the conversion price then in effect and the number of shares of stock or other securities deliverable upon conversion of this Note) shall be applied after that event in as nearly an equivalent manner as may be practicable.

 

7. MISCELLANEOUS.

 

7.1               Failure or Indulgence Not Waiver . No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

7.2               Notices . Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Borrower at the address provided in the Purchase Agreement, and to the Holder at the address(es) provided in the Purchase Agreement for the Holder, or at such other address as the Borrower or the Holder may designate by ten (10) days advance written notice to the other parties hereto.

 

 

 

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7.3               Assignability . This Note shall be binding upon the Borrower and its successors and assigns and shall inure to the benefit of the Holder and the Holder’s successors and assigns. This Note shall not be assigned by the Holder without the prior written consent of the Borrower. Borrower may assign this Note to a successor in a merger or sale of assets by Borrower without Holder’s consent.

 

7.4               Amendment . This Note may only be amended, modified or terminated by a writing executed by the Borrower and the Holder.

 

7.5               Governing Law . This Note shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts or federal courts located in the State of Massachusetts. All parties and the individual signing this Note on behalf of the Borrower agree to submit to the jurisdiction of such courts. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision that may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court in favor of the Holder.

 

[ The remainder of this page intentionally left blank .]

 

 

 

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IN WITNESS WHEREOF , the Borrower has caused this Secured Convertible Promissory Note to be signed in its name effective as of the date first written above.

 

 

IIOT-OXYS, INC.

 

 

By: /s/ Karen McNemar ______________________________

Karen McNemar, Chief Operating Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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NOTICE OF CONVERSION

 

IIOT-OXYS, Inc.

 

Re: Conversion of Note

 

Gentlemen:

 

The undersigned owner of this Note hereby irrevocably exercises the option to convert this Note into shares of common stock of IIOT-OXYS, Inc., in accordance with the terms of this Note, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for fractional shares, be issued in the name of and delivered to the undersigned unless a different name has been indicated below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay any transfer taxes payable with respect thereto.

 

Date:                               , 201___

 

 

     
     
    (Signature)
     
COMPLETE FOR REGISTRATION OF SHARES    
     
     
(Printed Name)   (Social Security or other identifying number)
     
     
(Street Address)    
     
     

(City, State, and ZIP Code)

   

 

 

 

 

 

 

 

 

 

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Exhibit 99.3

 

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (as amended, modified or otherwise supplemented from time to time, this “ Agreement ”), dated and effective as of January 22, 2019 made by IIOT-OXYS, Inc., a Nevada corporation (“ Debtor ”), in favor of Cambridge MedSpace, LLC, a Massachusetts limited liability company (the “ Secured Party ”).

 

RECITALS

 

A.                  The Secured Party has agreed to make available to Debtor a loan in the principal amount of Fifty-Five Thousand Dollars ($55,000) (the “ Loan ”) pursuant to the terms and conditions of that certain Securities Purchase Agreement, of even date herewith, by and between the Secured Party and the Debtor (the “ Purchase Agreement ”), as evidenced by that certain Secured Convertible Promissory Note, of even date herewith, in the principal amount of the Loan issued in favor of the Secured Party (the “ Note ” and, together with the Purchase Agreement and this Agreement, collectively, the “ Loan Documents ”).

 

B.                   As a condition to making the Loan to the Debtor, the Secured Party requires that it be granted, and the Debtor has agreed to grant to Secured Party, based on the outstanding amount of the Obligation, a security interest in the property described in Exhibit A attached hereto of the Debtor, whether now existing or hereafter from time to time acquired (collectively, the “ Collateral ”), which security interest is junior to certain Senior Security Interests (as defined below).

 

NOW, THEREFORE , in order to induce the Secured Party to make the Loan to the Debtor, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Debtor hereby represents, warrants, covenants, grants and agrees as follows:

 

AGREEMENT

 

1.                    Incorporation of Recitals; Capitalized Terms . The recitals set forth hereinabove are incorporated herein by this reference. All capitalized terms not otherwise defined herein have the meanings ascribed to them in the Purchase Agreement. Unless otherwise defined herein, all terms defined in the Uniform Commercial Code (the “ UCC ”) have the respective meanings given to those terms in the UCC.

 

2.                    Definitions .

 

(a)                 Collateral ” has the meaning given to that term in the Recital B hereof.

 

(b)                 Lien ” means any mortgage, deed of trust, lien, pledge, and security interest or other charge or encumbrance, of any kind whatsoever, including but not limited to the interest of the lessor or titleholder under any capitalized lease, title retention contract or similar agreement.

 

(c)                 Obligation ” means the outstanding amount of the Loan plus all accrued unpaid interest thereon.

 

(d)                 UCC ” means the Uniform Commercial Code as in effect in the State of Nevada from time to time.

 

(e)                 Senior Security Interests ” means the existing senior secured indebtedness by Debtor to Sergey Gogin outstanding as of the date hereof or that may accrue hereafter.

 

 

 

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3.                    Security Interest .

 

(a)                 Debtor hereby grants to the Secured Party a security interest: (a) in all of the Collateral, whether now owned or hereafter acquired, wherever located, whether or not such Collateral is or has been purchased, financed or otherwise acquired by the use of the Loan proceeds, whether such Collateral is related to the business conducted by Debtor under any fictitious business name referred to herein or under any other name, and whether or not the creation of a security interest therein is subject to the UCC or the Uniform Commercial Code as in effect in any other jurisdiction; and (b) in all proceeds and products thereof.

 

(b)                 Debtor hereby authorizes the Secured Party to file appropriate UCC or other financing statements, all continuation, amendments and modification filings related thereto and any other filings or recordings the Secured Party deem necessary or appropriate with respect to the Collateral and the Secured Party’ interest therein. The Secured Party may, in their discretion, describe the Collateral as “all assets” or “all personal property.”

 

(c)                 The security interest granted to the Secured Party hereunder shall secure the Obligation.

 

4.                    Debtor’s Representations, Warranties, Covenants and Agreements . Debtor hereby represent and warrants to the Secured Party, and covenants and agrees, that:

 

(a)                 Debtor is the owner of (or, in the case of after-acquired Collateral, at the time Debtor acquires rights in the Collateral, will be the owner thereof) and that no other Person has (or, in the case of after-acquired Collateral, at the time Debtor acquires rights therein, will have) any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral that is senior to the interest granted to the Secured Party except for the Senior Security Interests.

 

(b)                 Upon the filing of UCC-l financing statements in the appropriate filing offices, the Secured Party has (or in the case of after-acquired Collateral, at the time Debtor acquires rights therein, will have) a perfected security interest in the Collateral to the extent that a security interest in the Collateral can be perfected by such filing.

 

(c)                 This Agreement (i) has been duly authorized by all necessary corporate action of Debtor, (ii) has been duly executed by Debtor, and (iii) constitutes the legal, valid and binding obligation of Debtor, enforceable against Debtor in accordance with its terms.

 

(d)                 Debtor’s place of business is located at 705 Cambridge Street, Cambridge, MA 02141. Debtor’s true legal name is as set forth in the preamble to this Agreement. Debtor does not do business under any trade name or fictitious business name and has never used any other trade name or fictitious business name. Debtor will notify the Secured Party, in writing, at least thirty (30) days prior to any change in its place of business or jurisdiction of formation or the adoption or change of its legal name, any trade name or fictitious business name, and will, upon request of the Secured Party, execute or authenticate any additional financing statements or other certificates or records necessary to reflect any change in its place of business or jurisdiction of formation or the adoption or change in its legal name, trade names or fictitious business name.

 

5.                    Protection of Collateral by Debtor .

 

(a)                 Debtor will not, without the prior written consent of the Secured Party, sell, transfer or dispose of any Collateral except for in the ordinary course of Debtor’s business. Debtor shall keep the Collateral free from any and all liens, except by Mr. Gogin (whose interest is senior to that of the Secured Party). Debtor shall, at its own expense, appear in and defend any and all actions and proceedings which purport to affect title to the Collateral, or any part thereof, or which purport to affect the security interest of the Secured Party therein under this Agreement.

 

 

 

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(b)                 Debtor will keep the Collateral current, collected and/or in good condition and repair, and will not misuse, abuse, allow to deteriorate, waste or destroy the Collateral or any part thereof, except for ordinary wear and tear resulting from its normal and expected use in Debtor’s business and will not use or permit any Collateral to be used in violation in any material respect of any applicable law, rule or regulation, or in violation of any policy of insurance covering the Collateral. The Secured Party may examine and inspect the Collateral at any reasonable time, wherever located. Debtor shall perform, observe, and comply in all material respects with all of the material terms and provisions to be performed, observed or complied with by it under each contract, agreement or obligation relating to the Collateral.

 

(c)                 Debtor, in a timely manner, will execute or otherwise authenticate, or obtain, any document or other record, give any notices, do all other acts, and pay all costs associated with the foregoing, that the Secured Party determines is reasonably necessary to protect the Collateral against rights, claims or interests of third parties, or otherwise to preserve the Collateral as security hereunder.

 

(d)                 Debtor shall immediately notify the Secured Party of any claim against the Collateral adverse to the interest of Secured Party therein.

 

(e)                 Debtor shall, at its own expense, maintain insurance with respect to the Collateral in such amounts, against such risks, in such form and with such insurers, as is commonly maintained by prudent persons engaged in businesses similar to the business engaged in by Debtor. Each policy of liability insurance shall provide for all losses to be paid on behalf of the Secured Party, Debtor as its respective interests may appear; and each policy of property damage insurance shall provide for all losses to be paid directly to the Secured Party. Each such policy shall name the Secured Party as an insured party thereunder (without any representation or warranty by or obligation upon the Secured Party) as its interest may appear.

 

(f)                  Debtor shall promptly pay when due all taxes and other governmental charges, all Liens and all other charges now or hereafter imposed upon or affecting any Collateral.

 

6.                    Further Acts of Debtor . Debtor shall, at the request of the Secured Party, execute or otherwise authenticate and deliver to the Secured Party any financing statements, financing statement changes and any and all additional instruments, documents and other records, and Debtor shall perform all actions, that from time to time the Secured Party may reasonably deem necessary or desirable to carry into effect the provisions of this Agreement or to establish or maintain a perfected security interest in the Collateral having the priority provided for herein or otherwise to protect the Secured Party’s interest in the Collateral.

 

7.                    Effect of Additional Security . If the performance of all or any portion of the Obligation shall at any time be secured by any other collateral, the exercise by the Secured Party, in the event of a default in the performance of any such obligation, of any right or remedy under any agreement or other record granting a lien on or security interest in such collateral shall not be construed as or deemed to be a waiver of, or limitation upon, the right of the Secured Party to exercise, at any time and from time to time thereafter, any right or remedy under this Agreement or under any other such agreement or record.

 

8.                    Default . Upon the occurrence of a Default or Event of Default under any Loan Document and the continuance thereof beyond any applicable cure periods under the Loan Documents (a “ Default ”), the Secured Party shall have all the rights and remedies of a the Secured Party on default under the UCC (whether or not the UCC applies to the affected Collateral) or, to the extent required by applicable law, the Uniform Commercial Code as in effect in the jurisdiction where Secured Party enforces such rights and remedies.

 

9.                 No Implied Waivers . No delay or omission on the part of the Secured Party in exercising any right or remedy created by, connected with or provided for in this Agreement or arising from any default by Debtor, shall be construed as or be deemed to be an acquiescence in or a waiver of such default or a waiver of or limitation upon the right of the Secured Party to exercise, at any time and from time to time thereafter, any right or remedy under this Agreement. No waiver of any breach of any of the covenants or conditions in this Agreement shall be deemed to be a waiver of or acquiescence in or consent to any previous or subsequent breach of the same or any other covenant or condition.

 

 

 

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10.                Entire Agreement . This Agreement, together with each of the Loan Documents, contains the entire understanding and agreement of Debtor and the Secured Party with respect to the subject matter hereof and may not be altered or amended in any way except by a written agreement signed by the parties. No provision of this Agreement or right of Secured Party hereunder can be waived, nor shall Debtor be released from its obligations hereunder, except by a writing duly executed by the Secured Party.

 

11.                Transfer of Indebtedness . Upon the transfer by the Secured Party of all or any portion of the indebtedness secured hereby, the Secured Party may transfer therewith all or any portion of the security interest created hereunder, but the Secured Party shall retain all of their rights hereunder with respect to any part of such indebtedness and any part of its security interest hereunder not so transferred.

 

12.                Term; Binding Effect . This Agreement shall be and remain in full force and effect until the Obligation has been fully performed and paid. Upon expiration and payment or conversion in full of the Obligation, this Agreement shall automatically terminate, and Debtor shall be permitted to file or cause the Secured Party to file one (1) or more UCC termination statements with respect to the Collateral. Each of the provisions hereof shall be binding upon Debtor and its respective legal representatives, successors and assigns and shall inure to the benefit of the Secured Party and its legal representatives, successors and assigns.

 

13.                Rules of Construction . Terms used in the singular shall apply to the plural, and vice versa, as the context requires; likewise masculine, feminine and neuter genders shall be interchangeable as the context requires. The use of the disjunctive term “or” does not imply an exclusion of the conjunctive, i.e., “or” shall have the same meaning as the expression “and/or.” “Including” shall not be limiting. Headings and section titles are for convenience of reference only and are not substantive parts of this Agreement, and shall not be given effect in construing the provisions of this Agreement. Each reference to a Loan Document shall mean such Loan Document as from time to time extended, modified, renewed, restated, reaffirmed, supplemented or amended.

 

14.                Severability . If any provision of this Agreement, or the application thereof to any person or circumstance, shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

15.                Counterparts . This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one (1) and the same instrument.

 

16.                Governing Law and Jurisdiction . This Agreement shall be deemed to be executed and delivered in the State of Nevada. The Debtor and the Secured Party: (i) agree that this Agreement shall be construed according to and governed by the laws of the State of Nevada, without regard to principles of conflicts of law (except to the extent governed by the UCC); (ii) consents to personal jurisdiction in the State of Massachusetts in the state and United States courts in Massachusetts; and (iii) consents to venue in the State of Massachusetts, for all actions and proceedings with respect to this Agreement and the Loan Documents, and waives any right it may have to assert the doctrine of forum non conveniens or to object to venue to the extent any proceeding is brought in accordance with this Section 16.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

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IN WITNESS WHEREOF , the undersigned has executed this Security Agreement as of the day and year first hereinabove written.

 

 

DEBTOR:

 

IIOT-OXYS, Inc.,

a Nevada corporation

 

 

 

By: /s/ Karen McNemar                                     

Karen McNemar, Chief Operating Officer

 

Accepted and Agreed:

 

SECURED PARTY:

 

Cambridge MedSpace, LLC,

a Massachusetts limited liability company

 

 

 

By: /s/ Giro DiBiase                                     

Giro DiBiase, Managing Member

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

COLLATERAL DESCRIPTION

 

All property of Debtor, whether now owned or hereafter acquired, wherever located, including, without limitation, all right, title and interest of Debtor in, to and under the following:

 

(a)                All Accounts;

 

(b)                All Chattel Paper;

 

(c)                All Commercial Tort Claims and other claims or causes of action;

 

(d)                All Deposit Accounts and cash;

 

(e)                All Documents;

 

(f)                 All Equipment;

 

(g)                All General Intangibles;

 

(h)                All Goods;

 

(i)                  All Instruments;

 

(j)                  All Intellectual Property;

 

(k)                All Inventory;

 

(l)                  All Investment Property;

 

(m)              All Letter-of-Credit Rights;

 

(n)                All contract rights;

 

(o)                All financial assets;

 

(p)                All payment intangibles;

 

To the extent not otherwise described above:

 

(i)                  All insurance policies, including the proceeds thereof, and water stock;

 

 

 

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(ii)                All architectural, structural, mechanical and engineering plans and specifications prepared for construction of improvements or extraction of minerals from any real property now or hereafter owned or leased by Debtor and all studies, data and drawings related thereto; and also all contracts and agreements of the Debtor relating to the foregoing plans and specifications or to the foregoing studies, data and drawings or to the construction of improvements on or extraction of minerals or gravel from any real property now or hereafter owned or leased by Debtor;

 

(iii)             All refunds, rebates, reimbursements, reserves, deferred payments, deposits, cost savings, governmental subsidy payments, governmentally registered credits (such as, by way of example and not as limitation, emissions reduction credits), other credits, waivers and payments, whether in cash or kind, due from or payable by any governmental authority or any insurance or utility company relating to any or all of the personal property or real property now or hereafter owned or leased by Debtor or to any improvements thereon or any of the other collateral described herein or arising out of the satisfaction of any condition imposed upon or the obtaining of any approvals for the development of the any real property now or hereafter owned by Debtor or the improvements thereon;

 

(iv)              All refunds, rebates, reimbursements, credits and payments of any kind due from or payable by any governmental authority or other entity for any taxes, special taxes, assessments, or similar governmental or quasi-governmental charges or levies imposed upon Debtor with respect to any personal property or real property now or hereafter owned or leased by Debtor and with respect to any improvements thereon or to any of the other collateral described herein, or arising out of the satisfaction of any condition imposed upon or the obtaining of any approvals for the development of any real property now or hereafter owned or leased by Debtor or the improvements thereon;

 

(v)                All supporting obligations with respect to any other Collateral; and

 

(vi)              All proceeds and products of any of the foregoing (and proceeds and products of proceeds and products).

 

The term “Intellectual Property” means all intellectual and similar property of every kind and nature now owned or hereafter acquired by Debtor, including inventions, designs, patents (whether registered or unregistered), copyrights (whether registered or unregistered), trademarks (whether registered or unregistered), trade secrets, domain names, confidential or proprietary technical and business information, know-how, methods, processes, drawings, specifications or other data or information and all memoranda, notes and records with respect to any research and development, software and databases and all embodiments or fixations thereof whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.

 

All terms used herein which are defined in the UCC shall have the same meanings when used herein, unless the context requires otherwise and except that (i) for purposes of this Agreement, the meaning of such terms will not be limited by reason of any limitation on the scope of the UCC, whether under Section 9-109 of the UCC, by reason of federal preemption or otherwise, and (ii) to the extent the definition of any category or type of Collateral is expanded by any amendment, modification or revision to the UCC, such expanded definition will apply automatically as of the date of such amendment, modification or revision.

 

 

 

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Exhibit 99.4

 

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF CORPORATE COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

COMMON STOCK PURCHASE WARRANT

IIOT-OXYS, INC.

 

Warrant Shares: 36,667   Original Issue Date: January 22, 2019

 

THIS COMMON STOCK PURCHASE WARRANT (the “ Warrant ”) certifies that, for value received Cambridge MedSpace, LLC , a Massachusetts limited liability company, or its assigns (the “ Holder ”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth and in the Securities Purchase Agreement between the Company and the Holder (the “ Purchase Agreement ”), at any time on or after the Original Issue Date and on or prior to the close of business on the fifth anniversary of the Original Issue Date (the “ Termination Date ”) but not thereafter, to subscribe for and purchase from IIOT-OXYS, INC, a Nevada corporation (the “ Company ”), up to 36,667 Common Shares (as subject to adjustment hereunder, the “ Warrant Shares ”); provided, however, the number of Warrant Shares exercisable pursuant to this Warrant shall increase from 50% to 100% in the Event of Default (as defined in the Note) has occurred and has not been cured. The purchase price of one (1) Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1. Definitions . Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Secured Convertible Note (the “ Note ”), dated January 22, 2019, issued by the Company to the purchaser pursuant to the Purchase Agreement.

 

Section 2. Exercise .

 

a)                    Exercise of Warrant . Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as the Company may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise form annexed hereto and within three (3) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the Common Shares thereby purchased by wire transfer to an account designated by the Company or cashier’s check drawn on a United States bank or, if available, pursuant to the cashless exercise procedure specified in Section 2(c) below. If the amount of payment received by the Company is less than the aggregate Exercise Price of the Common Shares being purchased, the Holder shall make payment of the deficiency within three (3) Trading Days following notice thereof. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall automatically reduce the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

 

 

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b)                   Exercise Price . The exercise price per Common Share under this Warrant shall be $0.75 (the “ Exercise Price ”).

 

c)                    Cashless Exercise . In connection with a Cashless Exercise, this Warrant shall represent the right to subscribe for and acquire the number of Warrant Shares equal to (i) the number of Warrant Shares specified by the Holder in its Notice of Exercise (the “ Total Number ”) less (ii) the number of Warrant Shares equal to the quotient obtained by dividing (A) the product of the Total Number and the applicable existing Exercise Price by (B) the Fair Market Value. “ Fair Market Value ” shall mean: (1) if the Warrant Shares are listed on the NYSE MKT (formerly NYSE AMEX), the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Markets (or any successors to any of the foregoing), the last reported sale price of the Warrant Shares on such exchange or Nasdaq on the date for which the determination is being made; or (2) if the Warrant Shares are not so listed, “ Fair Market Value ” shall be determined in good faith by the Board of Directors of the Company.

 

d)                   Mechanics of Exercise .

 

i.                                          Delivery of Certificates Upon Exercise . When Holder exercises this Warrant, certificates for Common Shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“ DWAC ”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder and such Warrant Shares have been sold or (B) the Common Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is five (5) Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required), and (C) payment of the aggregate Exercise Price as set forth above (including by cashless exercise, if permitted) (such date, the “ Warrant Share Delivery Date ”). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised in accordance with the requirements of the preceding sentence and with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such Common Shares, having been paid.

 

ii.                                      Delivery of New Warrants Upon Exercise . If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.                                  Rescission Rights . If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.                                   Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise at IPO . In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “ Buy-In ”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder subject to payment of the Exercise Price therefor. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Common Shares upon exercise of the Warrant as required pursuant to the terms hereof.

 

 

 

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v.                                      No Fractional Common Shares . No fractional Common Shares shall be issued upon the exercise of this Warrant. As to any fraction of a Common Share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round to the nearest whole Common Share.

 

Section 3. Certain Adjustments .

 

a)                    Issuance of Additional Common Shares .

 

i.                      In the event the Company shall issue any Additional Common Shares (as defined below), at a price per share less than the Exercise Price then in effect or without consideration, then the Exercise Price upon each such issuance shall be adjusted to that price determined by multiplying the Exercise Price then in effect by a fraction:

 

(A)               the numerator of which shall be equal to the sum of (x) the number of outstanding Common Shares (assuming full exercise, conversion or exchange of all warrants and other securities which are convertible into or exercisable or exchangeable for, and any right to subscribe for, Common Shares) immediately prior to the issuance of such Additional Common Shares plus (y) the number of Common Shares (rounded to the nearest whole Common Share) which the aggregate consideration for the total number of such Additional Common Shares so issued would purchase at a price per share equal to the Exercise Price then in effect, and

 

(B)               the denominator of which shall be equal to the number of outstanding Common Shares (assuming full exercise, conversion or exchange of all warrants and other securities which are convertible into or exercisable or exchangeable for, and any right to subscribe for, Common Shares) immediately after the issuance of such Additional Common Shares.

 

ii.                    Additional Common Shares ” means all Common Shares issued by the Company after the date hereof, except: (i) securities issued (other than for cash) in connection with a merger, acquisition, or consolidation, (ii) securities issued pursuant to the conversion or exercise of convertible or exercisable securities issued or outstanding on or prior to the date of the Purchase Agreement or issued pursuant to the Purchase Agreement (so long as the conversion or exercise price in such securities are not amended to lower such price and/or adversely affect the Holders), (iii) the Warrant Shares, (iv) securities issued in connection with bona fide strategic license agreements or other partnering arrangements so long as such issuances are not for the purpose of raising capital, (v) Common Shares issued to the Company’s employees, directors or advisors, and (vi) any warrants issued to any placement agent and its designees for the transactions contemplated by the Purchase Agreement.

 

b)                   Calculations . All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a Common Share, as the case may be. For purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Shares issued and outstanding.

 

c)                    Notice to Holder .

 

i.                                          Adjustment to Exercise Price . Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

 

 

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ii.                                      Notice to Allow Exercise by Holder . If (A) the Company shall declare a dividend on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any Common Shares of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 10 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Shares of record to be entitled to such dividend, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or Common Share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or Common Share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously publicly disclose such notice. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

d)                   Voluntary Adjustment By Company . The Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

Section 4. Transfer of Warrant .

 

a)                    Transferability . Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer, but only after such transferee agrees to be bound by the provisions of this Agreement. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)                   New Warrants . This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)                    Warrant Register . The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “ Warrant Register ”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

 

 

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d)                   Transfer Restrictions . The Warrant may only be disposed of in compliance with state and federal securities laws and shall not transferred unless the Warrant is (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue-sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144.

 

e)                    Representation by the Holder . The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5. Miscellaneous .

 

a)                    No Rights as Shareholder Until Exercise . This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

 

b)                   Loss, Theft, Destruction or Mutilation of Warrant . The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)                    Saturdays, Sundays, Holidays, etc . If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken, or such right may be exercised on the next succeeding Business Day.

 

d)                   Authorized Common Shares . The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its Certificate of Incorporation or Bylaws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body having jurisdiction thereof.

 

 

 

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e)                    Jurisdiction . All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflicts of law thereof.

 

f)                    Restrictions . The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

 

g)                   Nonwaiver and Expenses . No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder or Company shall operate as a waiver of such right or otherwise prejudice the Holder’s or Company’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If either party willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the other, the first party shall pay to the other party such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the affected party in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h)                   Notices . Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via email or facsimile at the email address or facsimile number set forth on the signature pages attached to the Purchase Agreement at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of email or facsimile transmission, if such notice or communication is delivered via email or facsimile at the email address or facsimile number set forth on the signature pages attached to the Purchase Agreement on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature page attached to the Purchase Agreement.

 

i)                     Limitation of Liability . No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)                     Remedies . The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)                   Successors and Assigns . Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)                     Amendment . This Warrant may be modified or amended, or the provisions hereof waived in accordance with the Purchase Agreement.

 

m)                 Severability . Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n)                   Headings . The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

 

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

IIOT-OXYS, INC

 

 

/s/ Karen McNemar

By: Name: Karen McNemar

Title: Chief Operating Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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NOTICE OF EXERCISE

 

TO:            IIOT-OXYS, INC.

 

(1)                                               The undersigned hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)                                              Payment shall take the form of (check applicable box): [ ] lawful money of the United States; or [ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

 

__________________________________________

 

 

__________________________________________

 

 

__________________________________________

 

(3)                                               Accredited Investor . The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended, and that the aforesaid Common Shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no present intention of distributing or reselling such Common Shares.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:                                          

 

Signature of Authorized Signatory of Investing Entity:                                          

 

Name of Authorized Signatory:                                          

 

Title of Authorized Signatory:                                          

 

Date:                                          

 

 

 

 

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ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute this form and supply required information. Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [           ] all of or [           ] Common Shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

                                                                                                                                                                                                           whose address is

 

                                                                                                                                                                                                                                           .

.

Dated:                                  ,                               

 

Holder’s Signature:                                                        

 

Holder’s Address:                                                           

 

                                                                                           

 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of limited liability companies and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

 

 

 

 

 

 

 

 

 

 

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Exhibit 99.5

 

 

 

A Communication from our CEO

 

 

On behalf of our entire team and the Board of Directors, it is my pleasure to take a few moments of your time to review 2018 accomplishments as well as our 2019 trajectory. Since our founding we have made significant progress, and the tremendous acceleration of the rate of accomplishments and exciting developments I noted in my October 2018 letter has positively impacted our Q4 2018 results, and the momentum is continuing into 2019.

 

Significant Accomplishments of 2018

 

After joining the company mid-2018 and getting a solid Leadership Team in place, our trajectory and rate of accomplishments have significantly accelerated. In the last half of 2018, we were proud to have accomplished the following:

 

· 6/2018 --- Cliff Emmons appointed as CEO bringing decades of operational expertise in med device and a proven track record of revenue generation
· 7/2018 --- machine learning engineer and other technical personnel added to team
· 8/2018 --- delivery of system to automotive customer
· 9/2018 --- S1 registration statement declared effective
· 9/2018 --- appointment of Karen McNemar as our COO bringing significant operational experience from the medical device industry
· 10/2018 --- application of our technology to 3D printing of metal components
· 10/2018 --- Master Service Agreement signed with key Pharmaceutical customer
· 10/2018 --- installation of equipment for automotive customer complete
· 11/2018 --- additional work scope awarded on structural health monitoring system to enable remote operations off grid
· 11/2018 --- additional work at automotive supplier leads to request for proposal to expand services into data analytics
· 11/2018 --- successful delivery of first phase of work for large Pharmaceutical client; work successfully executed onsite in Asia
· 11/2018 --- IIOT-OXYS, Inc. joins the Industrial Internet Consortium, the premier International Industry Organization that is shaping the future course of the Industrial Internet
· 11/2018 --- IIOT-OXYS, Inc. attends IIC Quarterly Meeting in Beijing and initiates discussions with strategic partner in Asia
· 12/2018 --- IIOT-OXYS, Inc. is asked to submit a second phase of proposed work under the Master Service Agreement with large Pharmaceutical customer
· 12/2018 --- IIOT-OXYS, Inc. in discussions with next three Biotech and Pharma customers with initial discussions on proposed activities well underway

 

As can be seen, we are making rapid progress towards our stated goal of becoming a leading supplier of Edge Computing, Machine Learning, and Algorithmic Insights.

 

 

 

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Sharpening the 2019 Focus

 

In addition to the work we continue to do for structural health monitoring and industrial applications, we are committed to expanding our offerings and customer base in Biotech, Medtech, and Pharma. Our goal is to help Biotech, Pharma, and Medical Device companies' operations leaders realize the next wave of productivity & quality assurance gains for their organizations, and become Industry 4.0 compliant. IIOT-OXYS, Inc. edge computing open-source hardware and proprietary ML algorithms employ our Minimally-Invasive Load Monitoring (MILM) technology to simply gather data and gain insights to monitor, scope, move from preventive to predictive maintenance, and even optimize development and manufacturing processes. IIOT-OXYS, Inc. has a unique value proposition in a fast growing worldwide multi-billion USD market, and has positioned itself with strategic partners for accelerated growth. Again, it is useful to review our strengths in these specific market segments:

 

· Our leadership team has significant depth and breadth in these markets spanning decades;
· Our Cambridge, MA location affords us access to virtually every major multinational firm in these markets with a low cost of sales (in our “backyard”)
· We have already proven our ability to add value by signing agreements with major firms in this space, with the next three expected soon, and targeting our first ten by the end of 2019

 

Therefore, we have begun our next great phase of growth as a company to serve these needs at the intersection of AI, Machine Learning, and Healthcare Operations and Production.

 

Gaining Momentum on the Financial Front

 

I am pleased to announce we expect 2018 revenues will represent a 3.5 times increase over 2017. This is due to our new Leadership Team focusing on delivery, results, and gaining momentum. We expect the first half of 2019 to be better in terms of revenue growth than the last half of 2018, and significant new contract wins are expected in 2019 within our target market segments of Biotech, Pharma, and Medtech. We continue to expand our efforts in Industrial and structural health monitoring applications as well, thereby providing a diverse and well-balanced customer base but with significant focus areas as well. Overall, we expect 2019 year on year revenue to increase by a greater factor than 2018 year on year revenue, and we are committed to continuing this geometric progression of revenue growth into the future as we rapidly expand.

 

We are also pleased to announce that we have secured an interim funding in the amount of $55,000 from me and two other founders, through Cambridge MedSpace LLC, a medical industry focused incubator located in Cambridge MA with deep connections to the Biotech, Pharma, and Medtech markets and investor networks. We will continue fundraising activities in 2019 that will enable additional technical and sales staff for expanded revenue growth and to increase our customer base.

 

Towards a Successful 2019 and Beyond

 

We are poised for strong growth and performance in 2019. We are setting our sights on adding our next three customers, on our way to our first 10 Biotech, Pharma & MedTech customers by year end, accelerating our business development efforts, starting and sustaining operations in Asia, and of course additional future fund raising activities to fuel and propel this significant growth. We are taking an aggressive approach of nurturing strong organic growth, identifying opportunities for growth through acquisition, and other joint ventures or mergers that could make sense for our business and the value to our shareholders. In closing I would like to thank our investors, customers, and employees for continuing to believe in this vision. We are committed to this course of strong focus on execution, delivery, and growth.

 

 

 

Sincerely,

Cliff Emmons, CEO

 

 

 

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Safe Harbor Statement

 

The following is a Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Our future plans and other statements in this letter about expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts constitute forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “feel,” “expect,” “intend,” ”likely,” “may,” “plan,” “potential,” “should,” “see,” “hope,” “view” and “would” or the negative of these terms or other comparable terminology. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for the disclosure of forward-looking statements. Our forward-looking statements are subject to a number of risks and uncertainties, including without limitation, the risks and uncertainties related to IIOT-OXYS, Inc. that can be found under the heading “Risk Factors” in our most recent annual report on Form 10-K and other filings with the SEC. These forward-looking statements are based on information currently available to us and actual results may differ as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. These forward-looking statements are made only as of the date hereof and we undertake no obligation, and disclaim any duty, to update or revise any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. You should not place undue reliance on these forward-looking statements. As a public reporting entity, IIOT-OXYS, Inc. files periodic reports with the SEC. For additional financial and other important information pertaining to the Company, individuals can visit www.sec.gov.

 

Contact:

 

Clifford L. Emmons

CEO

IIOT-OXYS, Inc.

contact@oxyscorp.com

www.oxyscorp.com

www.herelab.io

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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