AppYea, Inc. (OTC Pink: APYP) is engaged within the development and commercialization of mobile applications for the healthcare sector. Shares of the healthcare mobile app developer are gaining 28.57%, through afternoon trading on Thursday, October 26, 2017. Over the past month, AppYea, Inc. has seen average daily volume of 7.87 million shares on the day. However, volume of 12.51 million shares or dollar volume of $11,259, has already exchanged hands on the day.
Shares of AppYea, Inc. are rallying today, after the company announced that it has entered into a securities purchase agreement with Auctus Fund, LLC. Under the terms of the deal, the investment firm will receive a $85,000 convertible note in exchange in $85,000 in cash. Furthermore, Auctus Fund, LLC has also received a warrant to purchase an additional 42.5 million shares of common stock. The warrant expires in October 2022 and with an exercise price of $0.0005 per share. Here is the full press release detailing of the securities purchase agreement:
AppYea, Inc. Press Release:
Item 1.01 Entry into a Material Definitive Agreement.
On October 22, 2017, the Company entered into and closed a financing transaction with Auctus Fund, LLC, consisting of a Securities Purchase Agreement, a Convertible Promissory Note, and a Warrant.
The Securities Purchase Agreement provides that Auctus Fund, LLC would receive a Convertible Promissory Note in an amount of $85,000 in exchange for a funding amount of $85,000, and as additional consideration would also receive a Warrant for the purchase of an additional 42,500,000 shares of common stock. The Convertible Promissory Note will accrue interest at a rate of 12% per annum, default interest at a rate of 24% per annum, and will be convertible at a price equal to the lesser of (i) the lowest trading price during the previous twenty-five trading day period ending on the last complete trading day prior to the date of the note, and (ii) the variable conversion price, which is defined as 55% multiplied by the market price. The “market price” is defined as the lowest trading price for the common stock during the twenty-five trading day period ending on the last complete trading day prior to the conversion date. The “trading price” is defined as the lowest trade price on the OTC Pink, OTCQB or applicable trading market. Auctus Fund, LLC shall not be able to convert the promissory notes in an amount that would result in the beneficial ownership of greater than 4.99% of the outstanding shares of the Company, with the exception that the limitation may be waived by Auctus Fund, LLC with 61 days prior notice. If, at any time when the note is issued and outstanding, the Company sells or issues shares of common stock for no consideration or for a consideration price per share less than the conversion price in effect on the date of such issuance, the conversion price for the note would be reduced to the amount of the consideration per share received by the Company for such dilutive issuance. If the Company prepays the note on or before 90 days following the date of the note, the Company shall be required to pay 135%, multiplied by the sum of the outstanding principal of the note, plus all accrued and unpaid interest and default interest if any. If the Company prepays the note during the period beginning 91 days and ending 180 days from the issue date of the note, the Company shall be required to pay 150% multiplied by the sum of the then outstanding principal amount of the note, plus accrued and unpaid interest and default interest, if any.
The warrant issued to Auctus Fund, LLC allows for the purchase of up to 42,500,000 shares of the Company’s common stock for a five year period, expiring on October 12, 2022, with an exercise price of $0.0005 per share. The warrants also contain a cashless exercise feature, based on a cashless exercise formula.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 is incorporated herein by reference.
The Convertible Promissory Note and Warrant issued by the Company pursuant to the terms of the Securities Purchase Agreement were not registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(a)(2) and 4(a)(5) under the Securities Act and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. No general solicitation or general advertising was used in connection with the offering of the Convertible Promissory Note and Warrant. The investor an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The Company disclosed to the investor, and the investor acknowledged, that the shares underlying the Convertible Promissory Note and Warrant may not be sold unless they are registered under the Securities Act or unless an exemption from registration is available.
The material terms and conditions of the transaction are described in, and copies of the full text of those documents are filed with this Current Report on Form 8-K, which are incorporated herein by reference.
Here is the link to the full AppYea, Inc. 8-K filing: https://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=12340649
