| Item
2.03 |
Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
GS
Capital Note
Omnia
Wellness Inc. (the “Company”) entered into a Securities Purchase Agreement (the “GS Purchase Agreement”) and
issued and sold to GS Capital Partners, LLC (the “GS Investor”), an 8% Convertible Redeemable Note (the “GS Note”)
in the principal amount of $55,000 (the “GS Loan”), less an original issue discount of $500. In addition, the Company paid
GS Investor expenses of $2,500. The Maturity date of the GS Note is May 17, 2023.
The
Company intends to use the net proceeds from the sale of the GS Note for general corporate purposes, subject to the limitations described
in the GS Purchase Agreement and the GS Note.
The
GS Note bears interest commencing on May 17, 2022 at a fixed rate of 8% per annum and shall be paid by the Company in common stock (“Interest
Shares”). The GS Investor may, at any time, send in a Notice of Conversion to the Company for Interest Shares based on the formula
provided in the GS Note. The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest calculated
on the unpaid principal balance of the GS Note to the date of such notice.
The
GS Investor is entitled, at its option, to convert all or any amount of the principal of the GS Note then outstanding into shares of
the Company’s common stock at a price for each share of common stock equal to 65% of the average of the two lowest trading prices
of the common stock, for the fifteen prior trading days including the day upon which a Notice of Conversion is received by the Company.
In the event the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 55% while that
“Chill” is in effect. The conversion of the GS Note is subject to a beneficial ownership limitation of 4.99% (or 9.99% upon
notice by the GS Investor) of the number of shares of common stock outstanding immediately after giving effect to such exercise.
The
conversion price, and any other economic terms under the GS Note, will be adjusted on a ratchet basis if the Company offers a more favorable
conversion price, prepayment rate, interest rate, additional securities, look back period or other more favorable term to another party
for any financings while the GS Note is in effect.
Prior
to the 180th day of the GS Note, the Company may prepay in whole or in part the amounts outstanding under the GS Note provided
it also pays certain penalties/premiums specified in the GS Note.
Upon
certain sale events as described in the GS Note, the Company shall, upon request of the GS Investor, redeem the GS Note in cash for 150%
of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the GS Investor, convert
the unpaid principal amount of the GS Note together with accrued but unpaid interest, into shares of common stock immediately prior to
such sale event at the then applicable conversion price.
The
GS Note contains customary events of default for a transaction such as the GS Loan which entitle the GS Investor, among other things,
to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the GS Note. Upon an Event of Default,
interest shall accrue at a default interest rate of 24%, among other remedies for specific events of default.
The
foregoing is a brief description of the purchase of the GS Note, and is qualified in its entirety by reference to the full text of the
GS Purchase Agreement and the GS Note, copies of which are included as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K, each
of which are incorporated herein by reference.
1800
Diagonal Lending Note
The
Company entered into a Securities Purchase Agreement (the “Diagonal Purchase Agreement”) and issued and sold to 1800 Diagonal
Lending LLC (the “Diagonal Investor”), a Convertible Note (the “Diagonal Note”) in the principal amount of $70,000
(the “Diagonal Loan”). In addition, the Company paid Diagonal Investor expenses of $3,750. The Maturity date of the Diagonal
Note is November 15, 2023.
The
Company intends to use the net proceeds from the sale of the Diagonal Note for general corporate purposes, subject to the limitations
described in the Diagonal Purchase Agreement and the Diagonal Note.
The
Diagonal Note bears interest commencing on May 16, 2022 at a fixed rate of 8% per annum. Any amount of principal or interest on the Diagonal
Note which is not paid when due shall bear interest at the rate of 22% per annum from the due date until paid.
The
Diagonal Investor is entitled, at its option at any time after the 180th day of the Diagonal Note, to convert all or any part
of the outstanding and unpaid amount of the Diagonal Note into shares of the Company’s common stock at a price for each share of
common stock equal to 65% of the lowest trading price (as defined in the Diagonal Note) for the ten prior trading days including the
day upon which a Notice of Conversion is received by the Company. The conversion of the Diagonal Note is subject to a beneficial ownership
limitation of 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise. Failure of
the Company to so convert the Diagonal Note and deliver the common stock when due shall result in the Company paying to the Diagonal
Investor $2,000 per day for each day beyond such deadline.
Prior
to the 180th day of the Diagonal Note, the Company may prepay in whole or in part the amounts outstanding under the Diagonal
Note provided it also pays certain penalties/premiums specified in the Diagonal Note.
The
Diagonal Note contains customary events of default for a transaction such as the Diagonal Loan which entitle the Diagonal Investor, among
other things, to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Diagonal Note.
Upon an Event of Default, interest shall accrue at a default interest rate of 22%, and the Company shall pay to the Diagonal Investor
an amount equal to the greater of (a) 150% of all amounts due and owing under the Diagonal Note and (b) the highest number of shares
of common stock issuable upon conversion of such amount at the highest closing price or the common stock during the default period, among
other remedies for specific events of default.
The
foregoing is a brief description of the purchase of the Diagonal Note, and is qualified in its entirety by reference to the full text
of the Diagonal Purchase Agreement and the Diagonal Note, copies of which are included as Exhibits 10.3 and 10.4 to this Current Report
on Form 8-K, each of which are incorporated herein by reference.