Item 1.01 Entry into a Material Definitive Agreement.
On June 19, 2023, NovAccess Global Inc. ("NovAccess," the "company" or "we")
entered into a letter agreement (the "letter agreement") with AJB Capital
Investments, LLC ("AJB"). On May 5, 2022, we issued a promissory note to AJB in
the principal amount of $1.0 million in connection with another loan from AJB.
On February 9, 2023, AJB loaned us an additional $265,000, which was added to
the May 2022 note. Pursuant to the letter agreement, AJB loaned us an additional
$75,000 on June 20, 2023, which was added to the May 2022 note. This $75,000
loan bears interest at 15% per annum and is due on July 16, 2023. We used
$56,575 of the proceeds of the loan to repay the amount remaining on a November
7, 2022 loan from 1800 Diagonal Lending LLC and will use the remainder for
general working capital purposes. Our chief executive officer Dwain K. Irvin
guaranteed repayment of the $75,000 loan from AJB.
Also pursuant to the letter agreement, in consideration for the $75,000 loan
NovAccess issued to AJB a "pre-funded" common stock purchase warrant to purchase
750,000 shares of the company's common stock for $$0.0001 a share. The warrant
expires after it has been exercised in full. If AJB is unable to sell the shares
issued upon exercise of the warrant for $750,000, then AJB may require NovAccess
to issue additional shares or pay cash in the amount of the shortfall. We are
also required to register the warrant and warrant shares for resale under the
Securities Act.
The AJB letter agreement and warrant are filed as exhibits to this Current
Report on Form 8-K. The descriptions above are qualified in their entirety by
reference to the full text of these documents.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure included under Item 1.01 above is incorporated by reference to
this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure included under Item 1.01 above is incorporated by reference to
this Item 3.02. The issuance of the warrant to AJB was exempt from registration
under Section 4(a)(2) of the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 Letter Agreement dated June 19, 2023 between NovAccess Global
Inc. and AJB Capital Investments, LLC
Exhibit 10.2 Common Stock Purchase Warrant dated June 19, 2023 for 750,000
shares issued by NovAccess Global Inc. to AJB Capital Investments, LLC
Exhibit 104 Cover Page Interactive Data File (formatted as Inline XBRL)
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