Item 1.01Entry Into a Material Definitive Agreement
I. TL-66 LLC Convertible Notes Modification and Default Waiver Agreement
On January 23, 2023, AXIM Biotechnologies, Inc. (the "Company") and TL-66 LLC
entered into a Convertible Notes Modification and Default Waiver Agreement
("Waiver Agreement") in order to modify and cure defaults on various notes
issued by the Company and its subsidiaries to TL-66 as summarized below.
(a) For five senior secured convertible notes, as amended, issued by the Company
to TL-66, aggregate face value of $934,478 (the "Secured Notes"), which are
currently in default, TL-66 agreed to waive and forfeit all interest accrued on
the Secured Notes through December 31, 2022, in the aggregate amount of
$216,572. In addition, all prior defaults on the Secured Notes were waived
through January 23, 2023, and the next interest payments due on each of the
Secured Notes was extended from April 1, 2023, to July 1, 2023. All of the
Secured Notes pays semi-annual interest at the rate of 3.5% per annum on each
October and April 1st until maturity of October 1, 2029. In addition, the
conversion price for each of the Secured Notes was reduced from $0.2201 to
$0.04.
(b) For a convertible note issued by the Company to TL-66, face value $365,931
(the "TL-66 Note"), TL-66 agreed to waive and forfeit all interest accrued on
the Convertible Notes through January 27, 2023, in the aggregate amount of
$11,190.96 and to waive all prior defaults on the TL-66 Note through January 23,
2023.The TL-66 Note pays annual interest at the rate of 3.0% per annum on each
January 27 until maturity on January 27, 2032 and is convertible into the
Company's common stock at a conversion price of $0.10.
(c) For a convertible note issued by the Company's wholly-owned subsidiary,
Sapphire Biotech, Inc, to TL-66, face value $190,000 (the "Sapphire Note"),
TL-66 agreed to waive and forfeit all interest accrued on the Sapphire Note
through December 31, 2022, in the amount of $17,115.84 and to waive all prior
defaults on the Sapphire Note through January 23, 2023. The Sapphire Note pays
annual interest each December 31st at the rate of 3.0% per annum until maturity
on December 31, 2034 and is convertible into the Company's common stock at a
conversion price of $0.03166667. In addition, TL-66 has the right to require the
Company to assume the Sapphire Note at any time upon demand.
II. John W. Huemoeller II Settlement Agreement
On January 23, 2023, the Company entered into a "Settlement Agreement" with its
Chief Executive Officer, John W. Huemoeller II (the "Executive") regarding
$512,500 of accrued and unpaid salary owed to the Executive through December 31,
2022 (the "Amount Due").
(a) $250,000 of the Amount Due will be paid by issuing to Executive a
convertible note, face value $250,000 (the "Executive Note"). The Executive Note
is unsecured, shall pay interest annually at the rate of 4% per annum with the
first interest payment beginning on January 1, 2024, and each January 1st
thereafter until maturity on January 1, 2033, and shall have a conversion price
of $0.01.
(b) Executive shall waive/forfeit $50,000 of the Amount Due. The remaining
balance of $212,500 of the Amount Due ($512,500 minus $250,000 for the Executive
Note = $262,500 minus $50,000 waiver = $212,500) shall not be payable at any
time prior to July 1, 2023, and Executive shall have no right prior to July 1,
2023 to seek payment of the remaining balance. If in the reasonable discretion
of the Board of Directors full payment of the remaining balance of the Amount
Due on July 1, 2023 ($212,500) is too burdensome for the Company's working
capital position at that time, then Executive will either grant an additional
3-month extension for the payment of the remaining Amount Due or engage in good
faith discussions with the Board in order to enter into a payment plan for the
remaining Amount Due, or a combination of both.
(c) Executive agreed to a $55,000 reduction in salary for the period of January
1, 2023 through June 30, 2023 (from $175,000 for the period reduced to
$120,000). After June 30, 2023, Executive's salary shall be reinstated to the
full amount prior to the reduction.
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III. MMI Convertible Note Modification and Default Waiver Agreement
On January 23, 2023, the Company and Medical Marijuana, Inc ("MMI") entered into
a Convertible Note Modification and Default Waiver Agreement ("MMI Modification
Agreement") in order to modify and cure the default of a convertible note, as
amended, face value $4 million, issued by the Company to MMI (the "MMI
Convertible Note") as set forth below.
(a) MMI agreed to waive and forfeit all interest accrued on the MMI Convertible
Note through December 31, 2022, in the amount of $261,536.96, and to waive all
prior defaults through January 23, 2023. The MMI Convertible Note was further
modified so that interest shall accrue at the original rate of 3.5% per annum
through June 30, 2023, and payable on that date. Thereafter interest will be
payable on a monthly basis beginning on August 1, 2023. In addition, the
conversion price for the MMI Convertible Note was reduced from $0.25 to $0.075.
The foregoing summaries of the agreements and notes do not purport to be
complete and are subject to, and qualified in their entirety by reference to the
agreements and attachments thereto, which are included as Exhibits 10.1, 10.2
and 10.3, and are incorporated herein by reference thereto.
Item 2.03Creation of a Direct Financial Obligation
On January 23, 2023, the Company issued a $250,000 unsecured convertible note as
more fully described in Item 1.01 II. (a) above, which is incorporated by
reference.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits.
Exhibit # Description
10.1 TL-66 Convertible Notes Modification and Default Waiver Agreement
dated January 23, 2023
10.2 Executive Settlement Agreement dated January 23, 2023, and $250,000
convertible Executive Note attached thereto
10.3 MMI Convertible Note Modification and Default Waiver Agreement dated
January 23, 2023
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