Attached files
| file | filename |
|---|---|
| EX-10.4 - AMERICAN INTERNATIONAL HOLDINGS CORP. | ex10-4.htm |
| EX-10.3 - AMERICAN INTERNATIONAL HOLDINGS CORP. | ex10-3.htm |
| EX-10.2 - AMERICAN INTERNATIONAL HOLDINGS CORP. | ex10-2.htm |
| EX-10.1 - AMERICAN INTERNATIONAL HOLDINGS CORP. | ex10-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 20, 2020
AMERICAN INTERNATIONAL HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
| Nevada | 000-50912 | 88-0225318 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
3990 Vitruvian Way, Suite 1152, Addison, Texas 75001
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (972) 803-5337
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:
| [ ] | 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)) |
Securities registered pursuant to Section 12(b) of the Act: None.
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 1.01 Entry into a Material Definitive Agreement.
Geneva Roth Convertible Note Transaction
On April 20, 2020, American International Holdings Corp. (the “Company”, “we” or “us”) entered into a Securities Purchase Agreement with Geneva Roth Remark Holdings, Inc., an accredited investor (“Geneva Roth”), pursuant to which the Company sold Geneva Roth a convertible promissory note in the principal amount of $88,000 (the “Geneva Roth Note”). The Geneva Roth Note accrues interest at a rate of 8% per annum (22% upon the occurrence of an event of default) and has a maturity date of April 20, 2021.
The Company has the right to prepay the Geneva Roth Note at any time during the first six months the note is outstanding at the rate of (a) 120% of the unpaid principal amount of the note plus interest, during the first 90 days the note is outstanding, (b) 125% of the unpaid principal amount of the note plus interest between days 91 and 120 after the issuance date of the note, (c) 130% of the unpaid principal amount of the note plus interest between days 121 and 150 after the issuance date of the note, and (d) 134% of the unpaid principal amount of the note plus interest between days 151 and 180 after the issuance date of the note. The Geneva Roth Note may not be prepaid after the 180th day following the issuance date.
Geneva Roth may in its option, at any time beginning 180 days after the date of the note, convert the outstanding principal and interest on the Geneva Roth Note into shares of our common stock at a conversion price per share equal to 61% of the lowest daily volume weighted average price (“VWAP”) of our common stock during the 10 days trading days prior to the date of conversion. We agreed to reserve a number of shares of our common stock equal to 6 times the number of shares of common stock which may be issuable upon conversion of the Geneva Roth Note at all times.
The Geneva Roth Note provides for standard and customary events of default such as failing to timely make payments under the Geneva Roth Note when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements and the failure to maintain a listing on the OTC Markets. The Geneva Roth Note also contains customary positive and negative covenants. The Geneva Roth Note includes penalties and damages payable to Geneva Roth in the event we do not comply with the terms of such note, including in the event we do not issue shares of common stock to Geneva Roth upon conversion of the note within the time periods set forth therein. Additionally, upon the occurrence of certain defaults, as described in the Geneva Roth Note, we are required to pay Geneva Roth liquidated damages in addition to the amount owed under the Geneva Roth Note (including in some cases up to 300% of the amount of the note and in other cases the value of the shares which Geneva Roth could have been issued upon the full conversion of the note after including default fees equal to 150% of the amount of such note).
The Geneva Roth Note includes a most favored nations provision which allows Geneva Roth the right to modify the Geneva Roth Note to provide for any more favorable terms offered in any future financing transaction, subject to certain limited exceptions.
At no time may the Geneva Roth Note be converted into shares of our common stock if such conversion would result in Geneva Roth and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock.
We hope to repay the Geneva Roth Note prior to any conversion. In the event that the Geneva Roth Note is not repaid in cash in its entirety, Company shareholders may suffer significant dilution if, and to the extent that, the balance of the Geneva Roth Note is converted into common stock.
The description of the Geneva Roth Note and Securities Purchase Agreement above is not complete and is qualified in its entirety by the full text of the Geneva Roth Note and Securities Purchase Agreement, filed herewith as Exhibits 10.2 and 10.1, respectively, which are incorporated by reference in this Item 1.01.
FirstFire Convertible Note Transaction
On April 30, 2020, we entered into a Securities Purchase Agreement with FirstFire Global Opportunities Fund, LLC, an accredited investor (“FirstFire”), pursuant to which the Company sold FirstFire a convertible promissory note in the principal amount of $105,000, representing a purchase price of $100,000 and an original issue discount of $5,000 (the “FirstFire Note”). The FirstFire Note accrues interest at a rate of 8% per annum (15% upon the occurrence of an event of default) and has a maturity date of April 30, 2021.
The Company has the right to prepay the FirstFire Note at any time during the first six months the note is outstanding with a prepayment penalty of between 15% and 35%, depending on when the prepayment is made following the issuance date.
FirstFire may in its option, at any time, convert the outstanding principal and interest on the FirstFire Note into shares of our common stock at a conversion price per share equal to $0.50 per share for the first 180 days that the FirstFire Note is outstanding and the lower of (a) $0.50 per share; and (b) 60% of the lowest VWAP of our common stock during the 10 days trading days prior to the date of conversion (the “Variable Conversion Rate”), thereafter, subject to adjustment in the case of certain fundamental transactions. In the event we have a DTC “Chill” on our shares, an additional discount of 10% will apply to the Variable Conversion Rate while that “Chill” is in effect. We agreed to reserve a number of shares of our common stock equal to 3.5 times the number of shares of common stock which may be issuable upon conversion of the FirstFire Note at all times. The FirstFire Note includes anti-dilution protection such that if we, at any time while the note is outstanding, issue any shares or are deemed to have issued any shares at a price per share less than the applicable conversion price of such FirstFire Note, then FirstFire has the option to reduce such conversion price to such lower price, subject to certain exceptions. The conversion discount of the Variable Conversion Rate of the FirstFire Note is adjustable upward by 15% (cumulative for the occurrence of each such event) upon the occurrence of certain events described in the FirstFire Note including in the event (a) our common stock cannot be delivered via DWAC; (b) we cease to report with the Securities and Exchange Commission; (c) we fail to maintain DTC eligibility; (d) the conversion price is below $0.01 per share; (e) we do not have sufficient authorized shares to allow for any conversion; and (f) certain other events described in the FirstFire Note occur. In addition, upon the occurrence of any events described in the immediately preceding sentence (and after each such event), FirstFire can increase the amount of the FirstFire Note by $10,000.
The FirstFire Note provides for standard and customary events of default such as failing to timely make payments under the FirstFire Note when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements and the failure to maintain a listing on the OTC Markets. The FirstFire Note also contains customary positive and negative covenants. The FirstFire Note includes penalties and damages payable to FirstFire in the event we do not comply with the terms of such note, including in the event we do not issue shares of common stock to FirstFire upon conversion of the note within the time periods set forth therein. Additionally, upon the occurrence of certain defaults, as described in the FirstFire Note, we are required to pay FirstFire liquidated damages in addition to the amount owed under the FirstFire Note equal to 150% of the amount of the FirstFire Note; and upon the occurrence of certain material defaults, the Variable Conversion Rate can be changed by FirstFire to equal the lowest closing bid price of our common stock during any period of default, less the applicable discount described above.
At no time may the FirstFire Note be converted into shares of our common stock if such conversion would result in FirstFire and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock, which amount may be increased to 9.9% upon 60 days’ prior written notice.
Pursuant to the FirstFire Securities Purchase Agreement we provided FirstFire a right of participation to purchase up to 100% of any debt or equity which we offer in the 12 months following the sale of the FirstFire Note.
We also granted FirstFire piggyback registration rights in connection with the sale of the FirstFire Note and granted FirstFire most favored nations rights which provide that the Company is required to offer FirstFire the right to modify the FirstFire Note to provide for any more favorable terms offered in any future financing transaction, subject to certain limited exceptions.
Pursuant to the FirstFire Securities Purchase Agreement we are required to obtain officer and director insurance within 60 calendar days of the sale of the FirstFire Note.
We hope to repay the FirstFire Note prior to any conversion. In the event that the FirstFire Note is not repaid in cash in its entirety, Company shareholders may suffer significant dilution if, and to the extent that, the balance of the FirstFire Note is converted into common stock.
The description of the FirstFire Note and Securities Purchase Agreement above is not complete and is qualified in its entirety by the full text of the FirstFire Note and Securities Purchase Agreement, filed herewith as Exhibits 10.3 and 10.4, respectively, which are incorporated by reference in this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K relating to the Geneva Roth Note and FirstFire Note is incorporated by reference in its entirety into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
As described above in Item 1.01, which disclosures are incorporated by reference in this Item 3.02 in their entirety, on April 20, 2020, we sold Geneva Roth the Geneva Roth Note in the principal amount of $88,000 and on April 30, 2020, we sold FirstFire the FirstFire Note in the amount of $105,000. The notes are convertible into our common stock at a discount to the trading price of our common stock as described in greater detail above. We claim an exemption from registration for the issuance of such convertible notes pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), since the foregoing issuances did not involve a public offering, the recipients were (i) “accredited investors”; and/or (ii) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act, and the recipients acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by us or our representatives. No underwriters or agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions. The securities sold are subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom.
Assuming no event of default occurs under the Geneva Roth Note, the principal amount, and accrued interest on the Geneva Roth Note through maturity, could, 180 days following the date of the note, convert into a maximum of 760,016 shares of our common stock, based on a conversion price equal to $0.125 per share (a 39% discount to the $0.205, lowest VWAP in the 10 trading days prior to the filing date of this Report), which amount is subject to change (and increase) based on the lowest VWAP during the 10 days trading days prior to, and including, the date of conversion and the other terms of the note.
Assuming no event of default occurs under the FirstFire Note, the principal amount, and accrued interest on the FirstFire Note through maturity, could, 180 days following the date of the note, convert into a maximum of 921,951 shares of our common stock, based on a conversion price equal to $0.125 per share (a 40% discount to the $0.205, lowest VWAP in the 10 trading days prior to the filing date of this Report), which amount is subject to change (and increase) based on the lowest VWAP during the 10 days trading days prior to, and including, the date of conversion and the other terms of the note.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMERICAN INTERNATIONAL HOLDINGS CORP. | ||
| Dated: May 18, 2020 | By: | /s/ Jacob D. Cohen |
| Name: | Jacob D. Cohen | |
| Chief Executive Officer | ||
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