Item 1.01 Entry into a Material Definitive Agreement.
February 22 Funding
On February 20, 2019,
BioSolar, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”)
pursuant to which the Company agreed to issue and sell a convertible promissory note (the “Promissory Note”) in the
aggregate principal amount of $53,500 to an accredited investor (the “Investor”). The Promissory Note was funded on
February 22, 2019 (the “Effective Date”).
The principal and interest
under the Promissory Note is due and payable twelve (12) months from the Effective Date of the Promissory Note.
The Promissory Note
bears interest at a rate of 10% per annum and is convertible into shares of common stock of the Company 180 days following the
Effective Date of the Promissory Note at the “Variable Conversion Price” which shall mean 61% multiplied by the average
of the lowest two Trading Prices (as such term is defined in the Promissory Note) for the common stock during the fifteen (15)
Trading Day period ending on the latest complete trading day prior to the conversion date. Notwithstanding the foregoing, the Investor
shall be restricted from effecting a conversion, if such conversion, along with the other shares of the Company’s common
stock beneficially owned by the Investor and its affiliates, exceeds 4.99% of the outstanding shares of the Company’s common
stock.
The Company has the
right but not the obligation under the Promissory Note to prepay the outstanding note, wherein the Company would pay to the Investor
a percentage of the outstanding note (the “Prepayment Percentage”), such Prepayment Percentage dependent upon the period
of time during which the Company elects to prepay the outstanding Promissory Note.
The Agreement also
enumerates events of default, which include, but are not limited to, failure to pay principal and interest, breach of covenant,
bankruptcy and delisting of common stock.
In connection with
the sale of the Promissory Note, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities
Act of 1933, as amended, for transactions not involving a public offering.
The foregoing description
of the Promissory Note does not purport to be complete and is qualified in its entirety by reference to the complete text of the
Promissory Note filed as Exhibit 10.1 hereto, which is incorporated herein by reference, and further qualified in its entirety
by reference to the complete text of the Purchase Agreement filed as Exhibit 10.2 hereto, which is incorporated herein by reference.
February 28 Funding
On February 25, 2019,
the Company entered into a Securities Purchase Agreement (the “Second Purchase Agreement”) pursuant to which the Company
agreed to issue and sell a convertible promissory note (the “Second Promissory Note”) in the aggregate principal amount
of $53,000 to an accredited investor (the “Second Investor”). The Second Promissory Note was funded on February 28,
2019 (the “Second Note Effective Date”).
The principal and interest
under the Second Promissory Note is due and payable twelve (12) months from the Second Note Effective Date of the Second Promissory
Note.
The Second Promissory
Note bears interest at a rate of 10% per annum and is convertible into shares of common stock of the Company 180 days following
the Second Note Effective Date of the Second Promissory Note at the “Variable Conversion Price” which shall mean 61%
multiplied by the average of the lowest two Trading Prices (as such term is defined in the Second Promissory Note) for the common
stock during the fifteen (15) Trading Day period ending on the latest complete trading day prior to the conversion date. Notwithstanding
the foregoing, the Investor shall be restricted from effecting a conversion, if such conversion, along with the other shares of
the Company’s common stock beneficially owned by the Investor and its affiliates, exceeds 4.99% of the outstanding shares
of the Company’s common stock.
The Company has the
right but not the obligation under the Second Promissory Note to prepay the outstanding note, wherein the Company would pay to
the Investor a percentage of the outstanding note (the “Second Note Prepayment Percentage”), such Second Note Prepayment
Percentage dependent upon the period of time during which the Company elects to prepay the outstanding Second Promissory Note.
The Agreement also
enumerates events of default, which include, but are not limited to, failure to pay principal and interest, breach of covenant,
bankruptcy and delisting of common stock.
In connection with
the sale of the Second Promissory Note, the Company relied upon the exemption from registration provided by Section 4(a)(2) of
the Securities Act of 1933, as amended, for transactions not involving a public offering.
The foregoing description
of the Second Promissory Note does not purport to be complete and is qualified in its entirety by reference to the complete text
of the Second Promissory Note filed as Exhibit 10.3 hereto, which is incorporated herein by reference, and further qualified in
its entirety by reference to the complete text of the Second Purchase Agreement filed as Exhibit 10.4 hereto, which is incorporated
herein by reference.