Today's 8-K filing doesn't set well : - ( It
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Posted On: 01/08/2020 4:56:33 PM
Today's 8-K filing doesn't set well : - (
Item 3.02 Unregistered Sales of Equity Securities.
As previously disclosed, Health Discovery Corporation (the “Company”) issued a convertible promissory note (the “Promissory Note”) to George H. McGovern, III, the Chairman and CEO of the Company, and James Dengler, a Company shareholder (the “Note Holders”), for $300,000. The Promissory Note contains an 8% annual interest rate and the Note Holders have the right to convert the principal and unpaid accrued interest of the Promissory Note into Common Stock (“Common Stock”) of the Company at a conversion price of $.004.
Additionally, as previously disclosed, the Company issued a convertible promissory note (the “Additional Promissory Note”) in the amount of $200,000 to the Note Holders for funds advanced to the Company. The Additional Promissory Note contains an 8% annual interest rate and the Note Holders have the right to convert the principal and unpaid accrued interest of the Additional Promissory Note into Series D Preferred Stock (“Preferred Stock”) of the Company at a conversion price based upon the price of the Company’s common stock on the date of advancement of the loan amount (the “Conversion Price”). The right of conversion (“Optional Conversion”) is solely at the Note Holders’ discretion.
On December 31, 2019, the Note Holders notified the Company of their election to convert both the Promissory Note and Additional Promissory Note into Common Stock and Preferred Stock, respectfully. As a result, the Note Holders received 86,927,397 shares of Common Stock and 21,158,953 shares of Preferred Stock.
Additionally, the Note Holders retain two warrants to purchase common stock of the Company for each share of Preferred Stock held and the price of each warrant is equal to the Conversion Price. Each warrant shall expire on July 31, 2029.
The conversion of the debt automatically terminates the priority security interest granted to the note holders and any other covenants under the Promissory Notes.
Item 3.02 Unregistered Sales of Equity Securities.
As previously disclosed, Health Discovery Corporation (the “Company”) issued a convertible promissory note (the “Promissory Note”) to George H. McGovern, III, the Chairman and CEO of the Company, and James Dengler, a Company shareholder (the “Note Holders”), for $300,000. The Promissory Note contains an 8% annual interest rate and the Note Holders have the right to convert the principal and unpaid accrued interest of the Promissory Note into Common Stock (“Common Stock”) of the Company at a conversion price of $.004.
Additionally, as previously disclosed, the Company issued a convertible promissory note (the “Additional Promissory Note”) in the amount of $200,000 to the Note Holders for funds advanced to the Company. The Additional Promissory Note contains an 8% annual interest rate and the Note Holders have the right to convert the principal and unpaid accrued interest of the Additional Promissory Note into Series D Preferred Stock (“Preferred Stock”) of the Company at a conversion price based upon the price of the Company’s common stock on the date of advancement of the loan amount (the “Conversion Price”). The right of conversion (“Optional Conversion”) is solely at the Note Holders’ discretion.
On December 31, 2019, the Note Holders notified the Company of their election to convert both the Promissory Note and Additional Promissory Note into Common Stock and Preferred Stock, respectfully. As a result, the Note Holders received 86,927,397 shares of Common Stock and 21,158,953 shares of Preferred Stock.
Additionally, the Note Holders retain two warrants to purchase common stock of the Company for each share of Preferred Stock held and the price of each warrant is equal to the Conversion Price. Each warrant shall expire on July 31, 2029.
The conversion of the debt automatically terminates the priority security interest granted to the note holders and any other covenants under the Promissory Notes.
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