UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
   
  For the quarterly period ended September 30, 2014
   
[  ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
   
  For the transition period from __________ to__________
   
  Commission File Number: 333-137160

 

 

 

NYXIO TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada 98-0501477
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

 

1330 S.W. 3rd Ave., Portland, Oregon  97201
(Address of principal executive offices)

 

800-398-4132
(Registrant’s telephone number)

 _________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X] Yes [] No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [ ] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

[ ] Large accelerated filer [ ] Accelerated filer
[ ] Non-accelerated filer [X] Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 4,830,909,232 as of November 18, 2014.

 

 

 

  TABLE OF CONTENTS  
    Page
 
PART I – FINANCIAL INFORMATION
 
Item 1: Financial Statements 3
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
Item 3: Quantitative and Qualitative Disclosures About Market Risk 11 
Item 4: Controls and Procedures 12
 
PART II – OTHER INFORMATION
 
Item 1: Legal Proceedings 13
Item 1A: Risk Factors 13
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 13
Item 3: Defaults Upon Senior Securities 13
Item 4: Mine Safety Disclosures 13
Item 5: Other Information 13
Item 6: Exhibits 13

 

2

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

  

F-1 Condensed Consolidated Balance Sheets as of September 30, 2014 (unaudited) and December 31, 2013;
F-2 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013 (unaudited);
F-3 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 (unaudited);
F-4 Notes to Condensed Consolidated Financial Statements (Unaudited).

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2014 are not necessarily indicative of the results that can be expected for the full year.

 

3

 

Nyxio Technologies Corporation

Condensed Consolidated Balance Sheets

(Unaudited) 

 

  September 30,  December 31,
   2014  2013
Current assets:          
Cash  $3,377   $27,082 
Accounts receivable   —      223 
Deposits on Inventory   16,004      
Total current assets   19,381    27,305 
Fixed assets, net of accumulated depreciation of $38,346 and $30,785, respectively   8,234    15,321 
Total assets  $27,615   $42,626 
Current liabilities          
Accounts payable and accrued expenses  $689,631   $567,598 
Accrued interest   145,506    131,741 
Deferred revenue   19,324    25,000 
Notes payable   171,630    171,630 
Notes payable - related party   10,458    8,458 
Convertible notes payable, net of discounts of $225,946 and $61,842, respectively   128,995    328,361 
Warrant liability   49,854      
Derivative liability   170,768    505,647 
Total current liabilities   1,386,166    1,738,435 
Shareholders' (deficit)          
Series A preferred stock; $0.01 par value; 1,100 shares authorized; no shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively   —      —   
Series B preferred stock; $0.01 par value; 100 shares authorized;  shares 100 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively   1    1 
Common stock; $0.001 par value; 5,000,000,000 shares authorized; 4,188,001,232 and 335,994,983 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively   4,188,002    335,995 
Common shares sold and unissued, 1,666 at September 30, 2014 and December 31, 2013, respectively   2    2 
Additional paid-in capital   16,582,887    19,322,140 
Common stock payable   50,000    50,000 
Deferred compensation   (3,020,833)   (6,770,833)
Other comprehensive (loss)   —      (85,502)
(Deficit) accumulated during the development stage   (19,158,610)   (14,547,612)
Total shareholders' (deficit)   (1,358,551)   (1,695,809)
Total liabilities and shareholders' (deficit)  $27,615   $42,626 

 

F-1

 

Nyxio Technologies Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

 

  Three Months Ended  Nine Months Ended
  September 30,  September 30,
   2014  2013  2014  2013
 Revenue  $5,676   $—     $5,676   $6,065 
 Cost of goods sold   2,829    —      2,829    1,445 
 Gross profit (loss)   2,847    —      2,847    4,620 
 Operating expenses                    
Consulting services   85,299    318,042    193,142    389,042 
Depreciation   2,333    2,637    7,561    8,481 
General and administrative   12,127    1,438    26,866    9,392 
Professional fees   72,950    81,438    177,465    108,957 
Promotional and marketing   11,483    —      14,114    45 
Research and development   —      —      —      —   
Rent expense   2,825    5,499    7,055    10,153 
Salaries and wages   60,504    62,500    187,500    94,987 
Officer compensation   1,250,000    1,250,000    3,750,000    3,979,167 
Travel and entertainment   11,099    947    16,474    4,541 
Impairment   —      —      —      —   
 Total operating expenses   1,508,620    1,722,501    4,380,177    4,604,765 
 Net loss from operations   (1,505,773)   (1,722,501)   (4,377,330)   (4,600,145)
 Other income (expense)                    
 Amortization of debt discounts   (125,375)   (44,070)   (384,901)   (219,116)
 Financing costs   (49,854)   (7,000)   (55,894)   (316,768)
 Interest expense   (13,306)   (63,657)   (56,048)   (85,289)
 Interest expense - related party   (243)   (439)   (666)   (649)
 Other income   1    —      3    —   
 Gain (loss) on derivatives   906,405    (171,266)   249,377    (254,951)
 Gain (loss) on debt settlement   —      —      14,461    —   
 Total other income (expense)   717,628    (286,432)   (233,668)   (876,773)
 Net loss  $(788,145)  $(2,008,933)  $(4,610,998)  $(5,476,918)
 Basic and fully diluted loss per common share  $(0.00)  $(0.03)  $(0.00)  $(0.15)
     Basic and fully diluted - weighted average common shares outstanding   3,634,702,298    74,770,313    2,034,307,114    35,969,456 

 

F-2

 

Nyxio Technologies Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

  Nine Months Ended
  September 30,
   2014  2013
Cash flows from operating activities:          
Net (loss)  $(4,610,998)  $(3,467,985)
Adjustments to reconcile net (loss) to net  cash used by operating activities:          
Depreciation   7,561    8,481 
Shares and options issued for services   3,883,500    4,486,207 
Shares issued for financing costs   —      306,770 
Amortization of beneficial conversion   384,901    219,116 
Penalty interest on default of convertible debt   15,243    51,550 
(Gain) loss on derivatives   (249,377)   254,951 
Warrants issued for finance charges   49,854      
Decrease (increase) in assets:          
Accounts receivable   223    —   
Deposits on inventory   (16,004)   —   
Increase (decrease) in liabilities:          
Accounts payable and accrued expenses   241,407    (68,112)
Accrued interest   27,010    44,785 
Deferred revenue   (5,676)   —   
Net cash used in operating activities   (272,356)   1,835,763 
Cash flows from investing activities:          
Change in due from related party, net   —      27,177 
Purchase of fixed assets   (474)   (300)
Net cash provided by (used in) investing activities   (474)   26,877 
Cash flows from financing activities:          
Proceeds from notes payable - related party   3,000    —   
Payments on notes payable - related party   (1,000)   —   
Proceeds from convertible debt   247,125    145,250 
Proceeds from the sale of common stock   —      —   
Net cash provided by financing activities   249,125    145,250 
Net increase (decrease) in cash   (23,705)   2,007,890 
Cash, beginning of period   27,082    2,658 
Cash, end of period  $3,377    2,010,548 
Supplemental disclosure of cash flow information:          
Cash paid for income taxes  $—     $—   
Cash paid for interest  $—     $—   

     

 

F-3

 

Nyxio Technologies Corporation

Notes to Consolidated Financial Statements

(Unaudited) 

 

NOTE 1 – Significant Accounting Policies and Procedures

 

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position of the Company as of September 30, 2014, and the results of its operations and cash flows for the three months and nine months ended September 30, 2014 and 2013. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission (“the Commission”). The Company believes that the disclosures in the unaudited condensed consolidated financial statements are adequate to ensure the information presented is not misleading. However, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 21, 2013 filed with the Commission on April 15, 2014.

 

The accompanying consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.

 

Principles of Consolidation

The financial statements as of September 30, 2014 and for the nine months then ended include Nyxio Technologies Corporation (“NTC”) and its wholly owned subsidiary, Nyxio Technologies, Inc. (“NTI”). All significant inter-company transactions and balances have been eliminated. NTC and its subsidiary are collectively referred to herein as the “Company”.

  

Cash and cash equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of nine months or less to be cash equivalents. At September 30, 2014 and December 31, 2013, the Company had no cash equivalents.

 

Accounts receivable

Accounts receivable is reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.

 

An allowance for doubtful accounts on accounts receivable is charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when collectability is determined to be permanently impaired.

 

Inventory

Inventories are stated at the lower of cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Market is determined based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. As of September 30, 2014 and December 31, 2013, respectively, there was no finished goods inventory.

 

Fixed Assets

Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:

 

Equipment 3-5 years

Furniture 7 years

 

The Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment there were no impairments needed as of September 30, 2014 or December 31, 2013. Depreciation expense for the nine months ended September 30, 2014 and 2013 was $7,561 and $8,481, respectively.

 

F-4

 

Revenue recognition

The Company recognizes revenue in accordance with ASC subtopic 605-10 (formerly SEC Staff Accounting Bulletin No. 104 and 13A, “Revenue Recognition”) net of expected cancellations and allowances. As of September 30, 2014 and 2013, the Company evaluated evidence of cancellation in order to make a reliable estimate and determined there were no material cancellations during the years and therefore no allowances has been made.

 

The Company's revenues, which do not require any significant production, modification or customization for the Company's targeted customers and do not have multiple elements, are recognized when (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the Company's fee is fixed and determinable; and (iv) collectability is probable.

 

Substantially all of the Company's revenues are derived from the sales of Smart TV and Tablet PC technology and products. The Company's clients are charged for these products on a per transaction basis. Pricing varies depending on the product sold.  Revenue is recognized in the period in which the products are sold.

 

Loss per share

The Company reports earnings (loss) per share in accordance with ASC Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed exercise or conversion of stock options, warrants, and debt to purchase common shares, would have an anti-dilutive effect. At September 30, 2014 and December 31, 2013 the Company had 250,000,000 and 10,090 potential common shares that have been excluded from the computation of diluted net loss per share.

 

Income taxes

The Company follows ASC subtopic 740-10 for recording the provision for income taxes. ASC 740-10 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

 

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

 

Fair Value of Financial Instruments

The Company has financial instruments whereby the fair value of the financial instruments could be different from that recorded on a historical basis in the accompanying balance sheets. The Company's financial instruments consist of cash, receivables, accounts payable, accrued liabilities, and notes payable. The carrying amounts of the Company's financial instruments approximate their fair values as of September 30, 2014 and December 31, 2013 due to their short-term nature.

 

Long-lived assets

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost or carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and its fair value or disposable value. For the nine months ended September 30, 2014 and 2013, the Company determined that none of its long-term assets were impaired.

 

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Advertising

The Company expenses advertising costs as incurred. The Company’s advertising expenses were $14,114 and $45 during the nine months ended September 30, 2014 and 2013, respectively.

 

F-5

 

Research and development

Research and development costs are expensed as incurred. During the nine months ended September 30, 2014 and 2012 research and development costs were $0 and $0, respectively.

 

Concentration of Business and Credit Risk

The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. The Company’s financial instruments that are exposed to concentration of credit risks consist primarily of cash. The Company maintains its cash in bank accounts which, may at times, exceed federally-insured limits.

 

Financial instruments which potentially subject the Company to concentrations of business risk consist principally of availability of suppliers. As of September 30, 2014, the Company was dependent on approximately two vendors for 85% of product supply.

 

Share-Based Compensation

The Company accounts for stock-based payments to employees in accordance with ASC 718, “Stock Compensation” (“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant.

 

The Company accounts for stock-based payments to non-employees in accordance with ASC 718 and Topic 505-50, “Equity-Based Payments to Non-Employees.” Stock-based payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as measured at its then-current fair value as of each financial reporting date.

 

The Company calculates the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing model. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as well as employee termination patterns.

 

The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight-line basis over the requisite service period of the award.

 

For the nine months ended September 30, 2014 and 2013 the Company recorded share-based compensation of $3,883,500 and $4,486,20, respectively.

 

Recent accounting pronouncements

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting statement that reduces some of disclosures and reporting requirements for development stage companies. The change will be in effect for the interim and annual reporting periods beginning after December 15, 2014. As of such date, among other things development stage entities will no longer be required to report inception-to-date information. The Company has elected early adoption of this pronouncement and will no longer be reporting inception-to-date information.

 

International Financial Reporting Standards

In November 2008, the Securities and Exchange Commission (“SEC”) issued for comment a proposed roadmap regarding potential use of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Under the proposed roadmap, the Company would be required to prepare financial statements in accordance with IFRS in fiscal year 2014, including comparative information also prepared under IFRS for fiscal 2013 and 2012. The Company is currently assessing the potential impact of IFRS on its financial statements and will continue to follow the proposed roadmap for future developments.

 

Year-end

The Company has adopted December 31, as its fiscal year end.

 

F-6

 

NOTE 2 - Going concern

 

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company has not yet achieved profitable operations and since its inception (July 8, 2010) through September 30, 2014 the Company had accumulated losses of $19,158,610 and a working capital deficit of $1,366,785. Management expects to incur further losses in the development of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

 

The Company expects to continue to incur substantial losses as it executes its business plan and does not expect to attain profitability in the near future. Since its inception, the Company has funded operations through short-term borrowings and equity investments in order to meet its strategic objectives. The Company's future operations are dependent upon external funding and its ability to execute its business plan, realize sales and control expenses. Management believes that sufficient funding will be available from additional borrowings and private placements to meet its business objectives, including anticipated cash needs for working capital, for a reasonable period of time. However, there can be no assurance that the Company will be able to obtain sufficient funds to continue the development of its business operation, or if obtained, upon terms favorable to the Company.

 

NOTE 3 - Accounts receivable

 

Accounts receivable consist of the following:

  September 30,  December 31,
   2014  2013
Trade accounts receivable  $223   $223 
Less: Allowance for doubtful accounts   (223)   —   
   $—     $223 

 

NOTE 4 - Property and equipment

The following is a summary of property and equipment:

  September 30,  December 31,
   2014  2013
Furniture and fixtures  $11,912   $11,612 
Software   11,945    11,945 
Computers and equipment   22,723    22,249 
Less: accumulated depreciation   (38,346)   (30,785)
   $8,234   $15,321 

 

Depreciation for the nine months ended September 30, 2014 and 2013 was $7,561 and $8,481, respectively.

 

F-7

 

NOTE 5 - Related party transactions

 

During the nine months ended September 30, 2014, the president and CEO donated additional services valued at $187,500, of which $66,467 has been recorded as a reduction in the officer;s receivable balance and $121,033 was recorded as accrued wages. The receivable balance as of September 30, 2014 and December 31, 2013 was $0.00 and $0.00, respectively.

 

Employment/Consulting commitments

One June 1, 2011, the Company entered into an Employment Agreement with its chief executive officer. The initial term of the agreement covers a three-year period commencing on June 1, 2011 and required annual compensation payment of $24,000. On January 1, 2012, the original agreement was amended to provide for an increase in annual compensation from the original $24,000 to $48,000 per year. On July 18, 2013, the Company and its CEO entered into an Amended and Restated Employment agreement which increased the CEO’s annual salary to $250,000 per annum, payable bimonthly effective July 1, 2013.

 

On June 1, 2011, the Company issued a Consulting Agreement to its chief financial officer. Pursuant to the agreement, annual consulting fees of $24,000 will be paid per annum for the term of the agreement which was to expire on March 1, 2014. In September 2011, the Company replaced the consulting agreement with an offer of employment with annual compensation of $30,041. Employment is considered “at-will” and therefore can be terminated at any time by either party.

 

During May 2013, the board of directors approved the issuance of 50,000,000 to the Company’s president and CEO. The shares were valued at $10,000,000, and vest over the period of two years. The Company amortized $3,229,167 for the year ended December 31, 2013. Additionally, as board of directors approved the issuance of 10,000,000 shares to the Company’s president and CEO. The shares were valued at $2,000,000 and expensed for the year ended December 31, 2013. During December 31, 2013, the CEO returned a net 50,000,000 shares in order to provide additional authorized shares to the Company. The Company is expected to reissue the shares at a future date and has accordingly recorded a common stock payable of $50,000 for the par value of the shares.

 

During June 2013, the Company’s CFO resigned. On June 12, 2013, this former CFO entered into a Business Consulting Agreement to provide consulting services at a rate of $10,000 per month, payable in bi-monthly installment of $5,000 on the 15th and last day of the month for the term of one year. During the year ended December 31, 2013 the Company issued 25,391,606 shares of common valued at $60,000 for the first six months of the agreement and accrued another $10,000. In addition, all prior payroll liabilities owing from the Company to this individual were released in exchange for 1,961,803 shares of the Company’s common stock. The stock was valued at $78,472 and satisfied $7,510 in accrued wages. The remaining value of $70,962 was recorded as additional compensation costs for the year ended December 31, 2013.

 

Note payable to a related party

During the year ended December 31, 2011, the Company’s chief financial officer paid certain liabilities totaling $10,578 on behalf of the Company. In October 2011, the Company issued a promissory note for the value of the payment which bears interest at a rate of 8% per annum and matures on September 30, 2012. On January 12, 2012, this same officer provided an additional $20,000 under the same terms, to the Company for operating expenses. During the nine months ended September 30, 2014, this former officer advanced an additional, $3,000 to the Company. As of September 30, 2014 and December 31, 2013 the note totaled $10,458 and $8,458, respectively.

 

F-8

 

NOTE 6 - Notes payable

 

Chamisa Technology, LLC

 On July 8, 2010, the Company’s chief executive officer and majority shareholder contributed a note payable in the amount of $83,627 which originated from his previously dissolved limited liability company. The note balance represented cash advances of $81,595 and previously accrued interest of $2,032. During the period from inception (July 8, 2010) through December 31, 2010, the Company received additional advances of $64,491 and $18,000 during the year ended December 31, 2011. No formal agreement pertaining to the advances had previously been documented, however pursuant to a verbal agreement between the parties, the balance was due on demand and bears interest at a rate of 12% per annum. March 5, 2012, the Company formalized and acknowledged its liability to Chamisa Technology, LLC in the form of a promissory note. The promissory note is unsecured bears interest at a rate of 12% per annum, and matures on August 31, 2012. Pursuant to the new promissory note, the Company is required to make monthly principal and interest payments through maturity. As of September 30, 2014, the note is in default.

 

On April 21, 2012, Chamisa Technology, LLC assigned $81,595 of the note to an individual who further assigned portions of the debt to various entities. During the year ended December 31, 2012, the original assignee agreed to forgive $56,595 of the debt in exchange for immediate conversion rights at a conversion rate of $0.001. During the period ended December 31, 2012, the Company authorized the issuance of 98 (post-split) shares of common stock for the conversion of $25,000 in principal and $936 of accrued interest. The fair value of the shares issued totaled $737,873 based on the market price of the common stock on the date of conversion. The difference in the fair value of the shares issued and the principal amount of debt and accrued interest converted totaled $711,937 and has been recorded as a financing costs.

 

On May 1, 2013, Chamisa Technology, LLC assigned the outstanding note to an affiliate who further assigned portions of the debt to various entities. During the year ended December 31, 2013, the Company authorized the issuance of 19,400,000 shares of common stock for the conversion of $19,400 in principal. The fair value of the shares issued totaled $336,863 based on the market price of the common stock on the various dates of conversion. The difference in the fair value of the shares issued and the principal amount of debt and accrued interest converted totaled $317,463 and has been recorded as a financing costs.

 

On December 1, 2013, Chamisa Technology, LLC assigned $65,123 of the note to an individual who further assigned portions of the debt to various entities. During the year ended December 31, 2013, the original assignee agreed to forgive $21,500 of the debt in exchange for immediate conversion rights at a conversion rate of $0.001. As of December 31, 2013, the Company recognized an interest expense of $43,623 from BCF related to the conversion and gain on settlement of debt of $21,500.

 

As of September 30, 2014 and December 31, 2013, the unpaid principal balance together with accrued interest totaled $106,895 and $100,606, respectively. The Company is still negotiating additional terms as it relates to this note.

 

Coach Capital LLC

On September 30, 2011, the Company issued a promissory note in the amount of $111,000 to Coach Capital, LLC. The note is unsecured, due on demand and bears interest at a rate of 10% per annum. In the event of default, the interest rate will immediately escalate to 30% per annum. As of September 30, 2014 and December 31, 2013, the unpaid principal balance together with accrued interest totaled $153,463 and $142,418, respectively.

 

ICG USA, LLC

On February 16, 2012, the Company entered into a Securities Purchase Agreement with ICG USA, LLC (“ICG”) and issued a Convertible Promissory Note in the amount of $200,000. The note is unsecure, bears interest at a rate of 6% interest per annum, and is due on demand. The note is convertible into shares of the Company’s common stock beginning year after the date of issuance and was convertible on August 16, 2012. Pursuant to the terms of the Agreement, the note is convertible at a rate equal to a 45% discount to the average of the three lowest closing trade prices in the preceding thirty trading days. On the date the note became convertible; the Company valued the benefit of conversion at $309,631 and recorded a discount of $200,000 and a derivative liability with a corresponding comprehensive loss in the amount of $109,631. The discount related to the conversion value will be amortized over the remaining term of the note utilizing the interest method of accretion. During the year ended December 31, 2012, ICG elected to convert $32,743 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 13,634 (post-split) shares at an average conversion rate of $2.40 and recognized a loss on the derivative in the amount of $23,340.

 

During the nine months ended September 30, 2014, ICG assigned $182,500 in principal and accrued interest to three other entities. As discussed below, the Company issued new convertible note agreements with those entities.

As of September 30, 2014 accrued interest totaled $28,506.

 

F-9

 

JMJ Financial 

On May 7, 2012, the Company issued a Convertible Promissory Note to JMJ Financial (“JMJ”) in the amount of $275,000. Pursuant to the terms of the note, a 10% original issue discount is included and is due in one year. The Note does not bear interest if paid in full within 90 days. Thereafter, a one-time interest charge of 5% shall be applied to the principal sum. The Note is convertible to common stock in whole or in part at conversion price equal to the lesser of $0.06 per share or 65% of the lowest trading price in the 25 trading days prior to the conversion. As of December 31, 2012, JMJ has funded $55,000 of the note which includes an original issue discount in the amount of $5,000. The Company has computed the present value of the amount funded at $52,731 as a result of its non-interest bearing terms. Additionally, the Company recorded a discount in the amount of $44,270 in connection with the initial valuation of the beneficial conversion feature of the note to be amortized utilizing the interest method of accretion over the one year term of the note. Further, the Company has recognized a derivative asset resulting from the variable change in conversion rate in relation to the change in market price of the Company’s common stock. During the year ended December 31, 2012, JMJ elected to convert $7,735 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 11,666 (post-split) shares at an average conversion rate of $1.51 and recognized a loss on the derivative in the amount of $7,665.

 

During January and February 2013, JMJ elected to convert $5,858 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 16,022 (post-split) shares at an average conversion rate of $0.37 and recognized a loss on the derivative in the amount of $5,689.

 

During April 2013, JMJ advanced an additional $5,400 to the Company.

 

During June 2013, JMJ elected to convert $5,330 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 100,000 shares at a conversion rate of $0.053 and recognized a loss on the derivative in the amount of $3,670.

 

During July 2013, JMJ elected to convert $6,500 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 325,000 shares at a conversion rate of $0.02 and recognized a loss on the derivative in the amount of $5,850.

 

During August 2013, JMJ elected to convert $13,000 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 2,600,000 shares at a conversion rate ranging from $0.003 to $0.01 and recognized a gain on the derivative in the amount of $650.

 

During October 2013, JMJ elected to convert $3,575 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 5,500,000 shares at a conversion rate of $0.00065 and recognized a loss on the derivative in the amount of $3,025.

 

During November 2013, JMJ elected to convert $1,885 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 5,800,000 shares at a conversion rate of $0.000325 and recognized a loss on the derivative in the amount of $2,175.

 

During the nine months ended September 30, 2014, JMJ elected to convert the remaining $16,517 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 39,845,000 shares at conversion rates ranging from of $0.0004 to $0.0005.

 

Asher Enterprises 

During the year ended December 31, 2012, the Company issued three Convertible Promissory Notes to Asher Enterprises, Inc. (“Asher”) in the amount of $63,000, $37,500 and $40,000, respectively. The notes bears interest at a rate of 8% per annum, are unsecured and mature on March 8, April 12, 2013 and August 13, 2013. The Notes are convertible into common stock in whole or in part at a variable conversion price equal to a 39% discount to the 10-day average trading price prior to the conversion date. The Company recorded a discount in the amount of $117,779 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes. During the year ended December 31, 2012, Asher elected to convert $5,700 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 14,305 (post-split) shares at an average conversion rate of $2.51 and recognized a loss on the derivative in the amount of $25. During the year ended December 31, 2013, the Company incurred $51,550 in penalty interest on these notes due to default. The penalty interest was added to the principal of these notes.

 

During the year ended December 31, 2013, the Company issued seven Convertible Promissory Notes to Asher totaling $152,250. The notes bears interest at a rate of 8% per annum, are unsecured and mature on from November 1, 2013 through June 20, 2014. The notes are convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the average of the lowest 3 trading prices in the 10-day trading period prior to the conversion date. The Company recorded discounts in the amount of $131,387 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the note.

 

During January and March 2013, the Company elected to convert $31,700 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 78,654 (post-split) shares at a conversion rate ranging from $0.36 to $0.44 and recognized a loss on the derivative in the amount of $40,724.

 

During April and May 2013, the Company elected to convert $13,000 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 201,842 shares at a conversion rate ranging from $0.06 to $0.11 and recognized a loss on the derivative in the amount of $28,933.

 

F-10

 

During July and September 2013, the Company elected to convert $59,600 in principal and $2,520 in accrued interest. Pursuant to the conversion rate calculation in the Agreement, the Company issued 11,331,517 shares at a conversion rate ranging from $0.0011 to $0.0122 and recognized a loss on the derivative in the amount of $142,186.

 

During October 2013, the Company elected to convert $30,450 in principal and $3,000 in accrued interest. Pursuant to the conversion rate calculation in the Agreement, the Company issued 35,774,642 shares at a conversion rate ranging from $0.00068 to $0.00087 and recognized a loss on the derivative in the amount of $28,997.

 

During November 2013, the Company elected to convert $23,370 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 63,455,501 shares at a conversion rate ranging from $0.00028 to $0.00055 and recognized a loss on the derivative in the amount of $26,034.

 

During December 2013, the Company elected to convert $26,240 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 99,661,141 shares at a conversion rate ranging from $0.00024 to $0.00029 and recognized a loss on the derivative in the amount of $55,154.

 

During the nine months ended September 30, 2014, Asher elected to convert $172,990 in principal and $7,490 in accrued interest. Pursuant to the conversion rate calculation in the Agreements, the Company issued 804,856,857 shares at conversion rates ranging from $0.00009 to $0. Additionally, for the converted notes Asher waived accrued interest totaling $10,372, recorded as a gain on debt settlement for the nine months ended September 30, 2014.

 

As of September 30, 2014 all balances owed Asher had been converted.

 

Continental Equities, LLC 

On September 20, 2012, the Company issued a Convertible Promissory Note to Continental Equities, LLC (“Continental”) in the amount of $35,000. The note bears interest at a rate of 8% per annum, is unsecured and matured on May 15, 2013. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 42.5% discount to the lowest three average thirty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $35,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes. Further, the Company has recognized a derivative liability in the amount of $1,437 resulting from the variable change in conversion rate in relation to the change in market price of the Company’s common stock.

 

On May 20, 2013, the Company issued a Convertible Promissory Note to Continental Equities, LLC (“Continental”) in the amount of $13,000. The note bears interest at a rate of 8% per annum, is unsecured and matures on May 31, 2014. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 42.5% discount to the lowest three average thirty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $13,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes. Further, the Company has recognized a derivative liability in the amount of $92,915 resulting from the variable change in conversion rate in relation to the change in market price of the Company’s common stock.

 

During September 2013, the Company elected to convert $12,499 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 8,571,500 shares at a conversion rate ranging from $0.0009 to $0.002 and recognized a loss on the derivative in the amount of $23,880.

 

During October 2013, the Company elected to convert $7,136 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 10,137,806 shares at a conversion rate ranging from $0.0007 to $0.0008 and recognized a loss on the derivative in the amount of $7,885.

 

During November 2013, the Company elected to convert $6,745 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 13,695,814 shares at a conversion rate ranging from $0.0004 to $0.0006 and recognized a loss on the derivative in the amount of $2,640.

 

During December 2013, Tide Pool Ventures Corporation (“Tide Pool”) purchased the remaining balance of the note.

 

During the nine months ended September 30, 2014, Tide Pool elected to convert the remaining balance of $21,620. Pursuant to the conversion rate calculation in the Agreement, the Company issued 105,385,200 shares at a conversion rate ranging from $0.0002 to $0.0003. Additionally, Tide Pool waived the prior accrued interest on the note totaling $4,088 recorded as a gain on debt settlement for the nine months ended September 30, 2014.

 

F-11

 

Tide Pool Ventures Corporation 

On December 10, 2013, the Company issued a Convertible Promissory Note to Tide Pool in the amount of $11,500. The note bears interest at a rate of 9.875% per annum, is unsecured and matures on December 31, 2014. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 30% discount to the lowest volume weighted average price of the five trading days prior to the conversion date. The Company recorded a discount in the amount of $11,500 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On February 20, 2014, ICG assigned $27,500 in principal to Tide Pool and the Company issued a new Convertible Promissory Note agreement. The note bears interest at a rate of 10% per annum, is unsecured and matures on February 20, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 50% discount to the lowest three average ten day trading prices prior to the conversion date. The Company recorded a discount in the amount of $27,500 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On February 20, 2014, the Company issued a Convertible Promissory Note to Tide Pool in the amount of $22,250. The note bears interest at a rate of 10% per annum, is unsecured and matures on February 20, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average ten day trading prices prior to the conversion date. The Company recorded a discount in the amount of $22,250 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On April 1, 2014, ICG assigned $60,000 in principal and interest to Tide Pool and the Company issued a new Convertible Promissory Note agreement. The note bears interest at a rate of 10% per annum, is unsecured and matures on April 1, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 50% discount to the lowest three average ten day trading prices prior to the conversion date. The Company recorded a discount in the amount of $60,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On April 1, 2014, the Company issued a Convertible Promissory Note to Tide Pool in the amount of $42,500. The note bears interest at a rate of 10% per annum, is unsecured and matures on April 1, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average ten day trading prices prior to the conversion date. The Company recorded a discount in the amount of $42,500 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

During the nine months ended September 30, 2014, Tide Pool elected to convert $70,000 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 637,740,740 shares at a conversion rate ranging from 0.0000 to 0.0007. Additionally, Tide Pool sold and assigned the $11,500 note to WHC Capital, LLC and $22,250 note to Beaufort Capital Partners, LLC, along with the related accrued interest of $1,505.73 and 1,158, respectively.

 

As of September 30, 2014, the unpaid principal balance was $29,917, net of discount in the amount of $30,083. Accrued interest totaled $3,425.

 

WHC Capital, LLC, Series Bravo 

On February 5, 2014, ICG assigned $20,000 in principal to WHC Capital, LLC, Series Bravo (“WHC”) and the Company issued a new Convertible Promissory Note agreement. The note bears interest at a rate of 6% per annum, is unsecured and matures on February 5, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average thirty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $20,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On February 7, 2014, the Company issued a Convertible Promissory Note to WHC in the amount of $10,000. The note bears interest at a rate of 10% per annum, is unsecured and matures on February 20, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 40% discount to the lowest three average thirty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $10,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On May 8, 2014, the Company issued a Convertible Promissory Note to WHC in the amount of $20,000. The note bears interest at a rate of 10% per annum, is unsecured and matures on May 8, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 40% discount to the lowest three average thirty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $20,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On June 16, 2014, the Company issued a Convertible Promissory Note to WHC in the amount of $20,000. The note bears interest at a rate of 10% per annum, is unsecured and matures on June 20, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 40% discount to the lowest three average thirty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $20,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

F-12

 

On August 5, 2014, the Company issued a Convertible Promissory Note to WHC in the amount of $10,000. The note bears interest at a rate of 12% per annum, is unsecured and matures on August 5, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average thirty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $10,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On August 13, 2014, Tide Pool assigned $11,500 in principal and $1,506 in accrued interest to WHC and the Company issued a new Convertible Promissory Note agreement for the combined principal and interest. The note bears interest at a rate of 12% per annum, is unsecured and matures on August 13, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average thirty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $13,006 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

During the nine months ended September 30, 2014, WHC elected to convert $49,064 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 484,560,767 shares at a conversion rate ranging from 0.0001 to 0.0002.

 

As of September 30, 2014, the unpaid principal balance was $9,425, net of discount in the amount of $34,517. Accrued interest totaled $1,791.

 

LG Capital Funding, LLC

 On March 11, 2014, ICG assigned $75,000 in principal to LG Capital Funding, LLC (“LG Capital”) and the Company issued a new Convertible Promissory Note agreement. The note bears interest at a rate of 8% per annum, is unsecured and matures on March 11, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 50% discount to the lowest closing bid price in the five day trading prices prior to the conversion date. The Company recorded a discount in the amount of $75,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On March 11, 2014, the Company issued a Convertible Promissory Note to LG Capital in the amount of $37,875. The note bears interest at a rate of 8% per annum, is unsecured and matures on March 11, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 50% discount to the lowest closing bid price in the five day trading prices prior to the conversion date. The Company recorded a discount in the amount of $37,875 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On June 17, 2014, the Company issued a Convertible Promissory Note to LG Capital in the amount of $20,000. The note bears interest at a rate of 8% per annum, is unsecured and matures on June 17, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 50% discount to the lowest closing bid price in the five day trading prices prior to the conversion date. The Company recorded a discount in the amount of $20,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

During the nine months ended September 30, 2014, LG Capital elected to convert $75,000 in principal. Pursuant to the conversion rate calculation in the Agreement, the Company issued 685,910,195 shares at a conversion rate ranging from 0.0001 to 0.0003.

 

As of September 30, 2014, the unpaid principal balance was $26,818, net of discount in the amount of $31,057. Accrued interest totaled $2,381.

 

Leland Martin Capital Partners, LLC

On August 8, 2014, the Company issued a Convertible Promissory Note to Leland Martin Capital Partners, LLC (“Leland Martin”) in the amount of $15,000. The note bears interest at a rate of 10% per annum, is unsecured and matures on August 8, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average ten day trading prices prior to the conversion date. The Company recorded a discount in the amount of $15,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On August 27, 2014, the Company issued a Convertible Promissory Note to Leland Martin Capital Partners, LLC (“Leland Martin”) in the amount of $14,500. The note bears interest at a rate of 10% per annum, is unsecured and matures on August 27, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average ten day trading prices prior to the conversion date. The Company recorded a discount in the amount of $14,500 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

On September 8, 2014, the Company issued a Convertible Promissory Note to Leland Martin Capital Partners, LLC (“Leland Martin”) in the amount of $5,000. The note bears interest at a rate of 10% per annum, is unsecured and matures on September 8, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average ten day trading prices prior to the conversion date. The Company recorded a discount in the amount of $5,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

F-13

 

On September 18, 2014, the Company issued a Convertible Promissory Note to Leland Martin Capital Partners, LLC (“Leland Martin”) in the amount of $5,000. The note bears interest at a rate of 10% per annum, is unsecured and matures on September 18, 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 45% discount to the lowest three average ten day trading prices prior to the conversion date. The Company recorded a discount in the amount of $5,000 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the notes.

 

As of September 30, 2014, the unpaid principal balance was $3,995, net of discount in the amount of $35,505. Accrued interest totaled $399.

 

Beaufort Capital Partners LLC 

On September 8, 2014, Tide Pool assigned $22,250 in principal and $1,158 in accrued interest to Beaufort Capital Partners LLC (“Beaufort”).

 

September 4, 2014 the Company issued a Convertible Promissory Note to Beaufort (“Leland Martin”) in the amount of $25,000. The note bears interest at a rate of 12% per annum, is unsecured and matures on March 4,, 2015. The Note is convertible into common stock in whole or in part after the maturity date at a fixed conversion price of $0.0001. The Company recorded a discount in the amount of $25,000 in connection with the initial valuation of the beneficial conversion feature of the note to be amortized utilizing the interest method of accretion over the term of the notes. Further, the Company may prepay the note at $37,500 at anytime prior to December 4, 2014. In connection with this note, the Company issued warrants to purchase 250,000,000 shares of the Company’s common stock at $0001 per share anytime from March 4, 2015 through September 4, 2019. The Company recorded the fair value of the note as a Warrant liability and financing costs totaling $49,854.

 

As of September 30, 2014, the unpaid principal balance was $25,841, net of discount in the amount of $21,409. Accrued interest totaled $1,533.

 

Cane Clark LLP 

On July 7, 2014, the Company issued a Convertible Promissory Note to Cane Clark LLP (“Cane Clark”) in the amount of $106,374, for legal fees incurred through June 30, 2014. The note bears interest at a rate of 6% per annum, is unsecured and is payable in full upon the earlier of: (i) thirty days following written demand or, (ii) April, 7 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 35% discount to the lowest three average twenty day trading prices prior to the conversion date. The Company recorded a discount in the amount of $106,374 in connection with the initial valuation of the beneficial conversion feature of the notes to be amortized utilizing the interest method of accretion over the term of the note.

 

As of September 30, 2014, the unpaid principal balance was $32,999, net of discount in the amount of $73,375. Accrued interest totaled $1,486.

 

Derivative Liability

As of September 30, 2014, the Company valued and recorded a derivative liability for the variable conversion features of the outstanding notes totaling $170,768 and a gain on these derivatives totaling $249,377.

 

NOTE 7 – Commitments

 

Lease agreements

In June 2011, the Company entered into a two-year lease agreement for additional office space commencing July 1, 2011 and expiring December 31, 2013. Pursuant to the terms of the lease agreement, the monthly rate will increase to $4,175 with an additional increase at the anniversary date to $4,300. In addition, the Company has increased its security deposit to $4,836. During the year ended December 31, 2013, the Company terminated all leases for office space.

 

Consulting agreements

As of September 30, 2014 the Company had accrued $247,700 in consulting fees. Active engagements include three consultants at a combined total of $19,700 per month. During the nine months ended September 30, 2014, the Company issued 1,054,080,427 shares of common stock valued at $146,500, of which included $13,000 in accrued fees from the previous year.

 

F-14

 

NOTE 8- Income taxes

 

Deferred income tax assets and liabilities are computed annually for differences between financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

 

The effective tax rate on the net loss before income taxes differs from the U.S. statutory rate as follows:

   2014    2013 
U.S. Statutory rate   34 %    34%
Valuation allowance   (34)%    (34)%
Effective tax rate   —        —    

 

The net change in the valuation for the nine months ended September 30, 2014 was an increase in valuation of $1,567,739.

 

The Company has a net operating loss carryover of approximately $19,200,000 available to offset future income for income tax reporting purposes, which will expire in various years through 2032, if not previously utilized. However, the Company’s ability to use the carryover net operating loss may be substantially limited or eliminated pursuant to Internal Revenue Code Section 382.

 

The Company had no material unrecognized income tax assets or liabilities as of September 30, 2014. The Company’s policy regarding income tax interest and penalties is to expense those items as general and administrative expense but to identify them for tax purposes. During the nine months ended September 30, 2014 and 2013, there were no income tax, or related interest and penalty items in the income statement, or as a liability on the balance sheet. We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is subject to U.S. federal or state income tax examination by tax authorities for years beginning at inception of July 8, 2010 through current. The Company is not currently involved in any income tax examinations.

 

NOTE 9 - Fair value measurement

 

The Company adopted ASC Topic 820-10 at the beginning of 2009 to measure the fair value of certain of its financial assets required to be measured on a recurring basis. The adoption of ASC Topic 820-10 did not impact the Company’s financial condition or results of operations. ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability. The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:

 

Level I – Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

 

Level II – Valuations based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

 

Level III – Valuations based on inputs that are supportable by little or no market activity and that are significant to the fair value of the asset or liability.

 

The following table presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013:

 

    Level I  Level II  Level III  Fair Value
September 30, 2014            
 Notes payable   $ —    $(182,088)  $—     $(182,088)
 Convertible debt, net     —     (128,995)   —     (128,995)
 Derivative Liabilities     —    (170,768)   —      (170,768)
     $ —    $(481,851)  $—     $(481,851)
December 31, 2013                     
 Notes payable   $ —    $(180,088)  $—     $(180,088)
 Convertible debt, net     —     (328,361)   (328,361)     
 Derivative Liabilities   —    (505,647)   —      (505,647)
     $ —    $(1,014,096)  $—     $(1,014,096)

 

 

F-15

 

NOTE 10 – Shareholders’ equity

 

Common stock issuances

During the six months ended March 31, 2013, the Company issued a total of 94,676 (post-split) shares of common stock in connection with the conversion of $37,558 in convertible debt.

 

During the nine months ended September 30, 2013, the Company issued a total of 3,301,842 shares of common stock in connection with the conversion of $21,330 in debt. Additionally, the Company recorded finance costs pursuant to these issuances totaling $243,000.

 

During the six months ended September 30, 2013, the Company issued a total of 30,009,620 shares of common stock in connection with the conversion of $99,519 in debt, including accrued interest of $2,520. Additionally, the Company recorded finance costs pursuant to these issuances totaling $63,770.

 

During the six months ended December 31, 2013, the Company issued a total of 248,822,386 shares of common stock in connection with the conversion of $113,401 in debt, including accrued interest of $3,000. Additionally, the Company recorded finance costs pursuant to these issuances totaling $10,693.

 

During the year ended December 31, 2013, the Company issued 41,521,023 shares of common stock pursuant to consulting services valued at $488,080.

 

During June 2013, the Company incorrectly issued 100,000 shares and is expecting their return.

 

During May 2013, the Company issued 60,000,000 shares of common stock to the Company’s president and CEO valued at $12,000,000, of which the Company expensed $2,729,167 for the year ended December 31, 2013. Additionally, the CEO temporarily returned 50,000,000 shares to provide additional outstanding shares to the company, which was recorded as a common stock payable totaling $50,000.

 

During June 2013, the Company issued 1,961,803 shares of common stock to the Company’s former CFO in satisfaction of accrued wages totaling $7,510. The remaining value of $70,962 was recorded as compensation for the year ended December 31, 2013.

 

Effective March 20, 2013, the Company performed a 1 for 450 reverse split of its common stock.

 

Effective December 9, 2013, the Company amended its articles to increase the authorized shares to 1,000,000,000.

 

Effective March 21, 2014 the Company amended its articles to increase the authorized shares to 5,000,000,000.

 

During the nine months ended September 30, 2014, the Company issued a total of 2,800,231,592 shares of common stock in connection with the conversion of $417,249 in debt, including accrued interest of $8,514.

 

During the nine months ended September 30, 2014, the Company issued a total of 1,054,080,427 shares of common stock valued at $146,500, including accrued expenses of $13,000, in connection with consulting agreements.

 

F-16

 

NOTE 11 - Subsequent events

 

During October 2014, Tide Pool elected to convert an additional $12,500 in principal for which the Company issued 300,000,000 shares of common stock.

 

During October 2014, WHC elected to convert an additional $10,454 in principal for which the Company issued 190,071,091 shares of common stock.

 

During October 2014, the Company issued an additional convertible note to Clane Clark for legal fees from July 1, 2014 through September 2014 totaling $14,975, with similar terms as noted above.

 

During October 2014, the Company entered into a Share Exchange Agreement (the “Agreement”) with 212 DB Corp., a private Delaware corporation (“212”). 212 is an electronic entertainment company best known for its Play Gig It and Rock This gaming applications. Under the Agreement, the Company will acquire all of the issued and outstanding capital stock of 212 in exchange for: (i) a direct assumption of $7,126,658.27 in debt owed by 212 to a variety of note holders and other creditors; and (ii) the issuance of convertible preferred stock having a stated value of $10,000,000 to the former stockholders of 212.

 

In connection with the Agreement, the Company will issue to 212’s former stockholders, on a pro-rata basis, a total of 1,000 shares of Series A Preferred Stock. As specified in the 1st Amended Certificate of Designation, the Series A Preferred Stock has a stated value of $10,000 per share and is convertible at the stated value into shares of the Company’s common stock at price equal to the greater of $0.0001 per share or 90% of the average of the closing bid prices for the Company’s common stock for the five trading days preceding the conversion. The conversion right is limited such that no holder of Series A Preferred Stock, following any conversion, is allowed to hold more than 4.99% of the issued and outstanding common stock. The Series A Preferred Stock is non-voting. Holders of Series A Preferred Stock are entitled to a preference in liquidation, up to the stated value per share, over the holders of the Company’s common stock.

 

Of the $7,126,658.27 in 212 debt that the Company will assume directly under the Agreement, $6,200,000 consists of convertible debentures (the “212 Debentures”), and $926,658.27 consists of general accounts payable. Under the Agreement, the 212 Debentures shall be amended such that the terms of conversion for such notes shall be substantially the same as the terms for the conversion shares of the Series A Preferred Stock.

 

F-17

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Company Overview

 

Through our wholly-owned subsidiary, Nyxio Technologies Inc., an Oregon corporation (“Nyxio”), we develop and provide technology for the entertainment and commercial markets within the consumer electronic industry. Since inception, the company’s approach to the industry can be best described as disruptive evolution. The general population has evolved to the point where computers and devices that rely on an internal computer for operation have become second nature. Gone are the days when people were intimidated by their electronics. Consumer electronics continue to evolve and morph into new form factors. Touch cell phones, web tablets and now TV with browsers incorporated have become an accepted and expected part of our society. Nyxio’s flagship product, The VioSphere, is the first TV with a fully functional personal computer built in. Unlike TVs with limited browser capabilities, the VioSphere has no limitations. Like many of the company’s innovative products, it is an entertainment destination. This destination philosophy has become a driving force for product innovation and development, which, we believe, we provide at a reasonable cost.  We are determined to become a leading-edge driver and developer of technology across a wide range of vertical markets that include retail, education, B2B, and digital signage.  We strive to reduce the overall environmental footprint of end users by consolidating key hardware into more efficient devices.

 

We are excited to announce that Nyxio continues to strengthen as a company. The last few months have been both intense and exciting for the company. Upgrades of the hardware used in the VioSphere and the significant upgrade in its capabilities, along with the acquisition of 212 Decibel have created significant opportunities for moving the company forward. In this time of accelerated evolution we look forward to sharing some new products, acquisitions and revenue streams. The Company has made significant progress towards the company’s vision.

 

With the vision of becoming a global entertainment company in a true multimedia environment, Nyxio has learned to quickly evaluate and if appropriate, execute on opportunities. We believe that we can methodically analyze and efficiently evaluate opportunities; which give us the ability to execute quickly. Part and parcel to the evaluation process is judging the impact the decision(s) may have on shareholders and future investors. The short term goals have been financing our continued operations, financing our own purchase orders and adjusting the process by which we produce revenue.

 

Nyxio has always designed and built innovative products; and has always been ahead of the technology curve. The last few years have seen the company suffer some degree of economic pressure due to a dearth of traditional financing during a continued period of consumer and industry recovery. Once accomplished, “self-evaluation” resulted in the “disruptive evolution” of our business model.

 

Nyxio Flagship Product

 

The VioSphere – The first Genius TV


The first fully integrated computer and TV represents the ultimate in convergence. Fitted with a full touch screen on all models from 32” to 65” with “Intel Inside” processor (i3, i5 or i7) represent a fully configured PC (HDD; BR/DVD/RW; 8GB; USB 2.0 AND 3.0; Windows 8.1, BT; WiFi; Ethernet; HD webcam; MORE). A full 1080P HD TV with multiple HDMI ports (including one extended HTMI), multiple audio and video inputs, and much more are standard. Watch the football game and work your fantasy football team on the same screen at the same time.

Given that the VioSphere does not fit to a specific niche, comparisons have to be made to individual markets. Based on our due diligence it can be said with certainty that our main competitors can be found within the following categories:

 

• Smart TVs

• All In One PCs

• Digital Signage devices

• Electronic Whiteboards (for the education + enterprise sectors)

 

As developers will further expand within their niches, the VioSphere will claim a stronghold in the Genius market, standing alone - for now. This product is focused on four channels of sales: 1) Consumer; 2) Digital Signage; 3) Education; 4) Office.

 

4

 

Recent Developments – Acquisitions

 

Recently, the Company was presented with a significant opportunity to take another step towards our “vision”, and Nyxio has finalized its acquisition of 212 DB Corp. (“212 Decibel” or “212dB”). This company has shown their intent to change the landscape of their industry entirely through unique innovations, which is a trait that is fundamental to Nyxio’s vision. 212Db has, in prior years, raised 17 million dollars for its operations and has also attracted the requisite investor base as well as assets that can be used to secure more traditional equity and debt financing.

 

212 Decibel

 

212Db is best known for its groundbreaking gaming applications, Play Gig It and Rock This, both launched on Facebook. These applications are blurring the lines that once separated gaming, the music industry, merchandising, and other revenue generating opportunities. With more than 70 artists currently under contract, and more than 400 million likes, followers, etc., the marketing potential is almost unprecedented. The 212Db acquisition brings a huge amount of Intellectual Property (IP) to Nyxio along with equity and the partnership with Artivision.

 

The 212Db team has spent millions of dollars in securing the licenses from such labels as Sony, Universal Music Group, and Warner as well as major publishers such as Sony/ATV, Universal Publishing, Warner and many more. In addition they signed a very large number of artists to exclusive agreement including the use of their avatar in the games.

 

Over the past 60 days, Nyxio has been working diligently to prepare and plan product launches in relation to software and applications. The 212Db acquisition has opened up new markets. The Play Gig It and Rock products are currently in desktop form and will be launched in several variations into mobile applications for users to enjoy on their phone or pad devices.

 

EEI International

To take advantage of the licenses and exclusive agreements acquired with 212Db, Nyxio is launching EEI International. With the catchphrase “Bringing Entertainment to the Masses”, one can’t help but know the goal of Encore Entertainment Industries International. Representing talent ranging from visual to vocal artists and beyond, EEI intends to manage a roster of talented, marketable individuals and groups - opening up a multitude of potential revenue streams. These mediums will be delivered by Nyxio’s flagship product redux, the VioSphere Genius TV.

 

With the additions of these two arms of Nyxio, we believe the Company can truly place a foothold across a number of intertwining industries.

 

Modest expansion in the organization of the company has been undertaken to support the acquisition and to support of the evolving Nyxio products. Our manufacturer has completed resolution of the capacity and QC issues we have been working on. Nyxio is now in a position to add not only to our customer base for hardware, but for adding additional products to the portfolio.

 

The newly patented graphic user interface developed by Nyxio is moving forward through the development process. The addition of a skilled software company was an obvious target for acquisition. When completed, the GUI will enable users to unify their devices, including their televisions, desktop computers, pad devices and mobile phones.

 

Nyxio branded software products set for 2015 are designed around expanding the Sphere software design of its patented interface. Nyxio has strived to provide forward thinking hardware with advanced software engines to drive core offerings. The acquisition of 212dB will allow us to expand from the product centric base into software as well.

 

Marketing

 

Our marketing strategy will focus on targeted markets, including a focused push around Nyxio’s presence on the east coast. With the new VioSphere Genius TV in stock with Adorama, our soon to be released apps Rock This and Play Gig-It, and our new user-interface software, Nyxio is poised to solidify its position in the marketplace. Not only is Adorama currently generating television, print, and radio ads in conjunction with the VioSphere and the NY Giants, they are also running promotional giveaways of the VioSphere itself. In regard to promotions nationwide, our acquisition of 212 has yielded mutually beneficial relationships with many talented music artists, who have been contracted to participate in promotions. With their over 400 million Facebook followers, these artists will join us in national media events that will continue to elevate our identity across the board. Additionally, we will expand our range even more to target key markets for our new Rock This and Play Gig-It apps. Not only will we have press tours for the artists in regard to the apps, we will create and run ads within the apps themselves. The cross-promotional opportunities around these apps are limitless, as they provide a multi-faceted view of Nyxio as a whole, and liason between the varied levels of our technologies, artists, and audiences.

 

5

 

Goals

 

Nyxio Technologies continues to have six achievable goals:

 

  • Company Growth
  • Profitability
  • Product Development
  • Fast Innovation
  • Market Penetration
  • Industry Expansion

 

Results of operations for the three and nine months ended September 30, 2014 and 2013

 

The discussion that follows is derived from our unaudited interim balance sheets and the unaudited statements of operations and cash flows for the three and nine months ended September 30, 2014 and 2013.

 

Revenues, net

 

We generated $5,676 in revenue during the quarter ended September 30, 2014 and no revenue during the quarter ended September 30, 2013. Our operating revenues during the nine months ended September 30, 2014 were $5,676 compared to $6,065 during the nine months ended September 30, 2013.

 

We recognize revenue when delivery has occurred, the sales price is fixed and collectability is reasonably assured. Ownership and title of our products pass to customers upon delivery of the products to customers. We record revenues, net of sales discounts.

 

Cost of Sales

 

Our costs of sales were $2,829 for the quarter ended September 30, 2014 and $0 for the quarter ended September 30, 2013. Our cost of sales for the nine months ended September 30, 2014 was $2,829, compared to $1,445 for the nine months ended September 30, 2013. Cost of sales includes finished goods, assembly services, and cost to deliver our product. Cost of sales has remained consistent with the previous year comparable period. As we are able to increase our revenues, we expect our cost variables to decrease due to volume discounts.

 

Gross Profit

 

Our gross profit was $2,847 for the quarter ended September 30, 2014 and $0 for the quarter ended September 30, 2013. During the nine months ended September 30, 2014 our gross profit was $2,847, compared to a gross profit for the nine months ended September 30, 2013 of $4,620. We expect gross profits to normalize at 38% in the near-term and 40% in the long-term. Gross profit, as a percentage of sales, will also increase as we have a higher weighting of sales through direct distribution to our end customer.

 

Expenses

 

During the quarter ended September 30, 2014 we incurred $1,508,620 in operating expenses, compared to $1,722,501 for the quarter ended September 30, 2013. The decrease in operating expenses for the three months ended September 30, 2014 compared to the same period in 2013 was attributable primarily to a decrease in the value of stock based compensation paid to consultants.

 

Cash salaries and wages were $60,504 for the quarter ended September 30, 2014, compared to $62,500 for the quarter ended September 30, 2013. Professional fees were $72,950 for the quarter ended September 30, 2014, compared to $81,438 for the quarter ended September 30, 2013. We incurred $85,299 consulting fees for the quarter ended September 30, 2014, compared to consulting fees of $318,042 for the quarter ended September 30, 2013.

 

During the quarter ended September 30, 2014, we incurred $11,099 in travel and entertainment expenses, compared to $947 in travel and entertainment expenses during the quarter ended September 30, 2013. This expense is expected to increase during the remainder of the year as we continue our product marketing and business development strategies.

 

During the quarter ended September 30, 2014, we incurred $2,631 in promotional and marketing expense, compared to $0 in promotions and marketing during the quarter ended September 30, 2013. These costs include demonstration products, advertising, shipping samples to retailers and distributors, and promotion allowances for distributors and tradeshows which includes booth costs, and various other tradeshow costs. We expect this expense to increase over the remainder of the year.

 

6

 

During the quarter ended September 30, 2014, we incurred $2,333 in depreciation, compared to $2,637 for the quarter ended September 30, 2013. General and administrative expenses were $12,127 for the quarter ended September 30, 2014, compared to $1,438 for the quarter ended September 30, 2013. Stock based officer compensation was valued at $1,250,000 for the quarter ended September 30, 2014 and at $1,250,000 for the quarter ended September 30, 2013. We incurred $2,825 in rent expense for the quarter ended September 30, 2014 compared to $5,499 for the three months ended September 30, 2013. We incurred promotional and marketing expense of $11,483 during the quarter ended September 30, 2014, compared to $0 for the quarter ended September 30, 2013.

 

During the nine months ended September 30, 2014, our total operating expenses were $4,380,177, compared $4,604,785 for the nine months ended September 30, 2013.

 

Other Income and Expense

 

During the quarter ended September 30, 2014, we experienced a gain on the change in the value of a derivative liability in the amount of $906,405, financing costs of $49,854, interest expense of $13,306, interest expense to a related party of $243, amortization of debt discounts in the amount of $125,275, and other income of $1.

 

As a result of various financing agreements, we have incurred additional costs which are attributable to the terms of each agreement with respect to their variable conversion rights. Until such time the agreements are satisfied in full, we will continue to incur costs related to the valuation of these terms.

 

Net Loss

 

During the quarter ended September 30, 2014 we incurred a net loss of $788,145. By comparison, we incurred a net loss of $2,008,933 during the quarter ended September 30, 2013. The decrease in net loss of compared to the same period last year is primarily attributable to a gain on the change in value of derivative liabilities, as well as a decrease in the value of stock based consulting compensation issued during the three months ended September 30, 2014 as compared to the same quarter last year.

 

Our net loss for the nine months ended September 30, 2014 was $4,610,988, compared to $5,486,918 for the nine months ended September 30, 2013.

  

Our greatest challenges which have prohibited us from executing our business plan are as follows:

 

 

  • Lack of adequate funding to obtain a small inventory, establish a healthy PR campaign, recruit a world class management team, and fund future development to enhance current product features and new products to stay ahead of the technology curve.
  • Manufacturing in Asia – Too far away to monitor quality and suppliers without costly travel.
  • Lack of adequate funding to retain skilled sales team.

 

Our current and future operations are focused on continuing to carry out our business plan through the marketing and continued development of our current products, including the VioSphere, Realm, RealmPro, Venture MMV technology and Vuzion Android TV, and our future products, continued development efforts, and the continued evaluation of potential strategic acquisitions and/or partnerships.

 

Our operations to date have consisted primarily of the following:

 

•Enhancing product features and aesthetics
•Negotiations to reduce product cost and enhance quality
•Building a reliable Bill of Material for all products and sourcing from established suppliers
•Work with technology partners such as Avnet, Intel, and AMD, with whom we have collaboration agreements, to develop new CPU list of options and board options. To date we have not entered into any Purchase Orders with these partners.
•Develop new products with alternate revenue streams, such as gaming and cloud commerce
•Develop clear and concise marketing, sales, and specification literature and tools

 

Our efforts are directed at generating revenue through the sales of our current products, which are available for purchase at the following locations: Amazon.com, OrderBorder, Rapid Buyer, Focus, University Book Stores, Smith and Associates, Sterling Technology, and at our proprietary web-site.

 

Key factors affecting our results of operations include capitalization, revenues, cost of revenues, operating expenses and income and taxation.

 

7

 

Liquidity and Capital Resources

 

As of September 30, 2014, we had cash and equivalents on hand of $3,377, deposits on inventory of $16,004 and a working capital deficit of $1,366,785. We determined that our cash on hand and working capital were not sufficient to meet our current anticipated cash requirements. As such, we evaluated several options to obtain short term financing, as discussed below. While we hope to see a significant increase in revenue in the second quarter of 2014 as a result on pending product orders, we have continued to rely on funds obtained through the issuance of debt and equity securities throughout 2014. We may enter into further debt and equity agreements to fund operations and inventory requirements if management feels it is required. We anticipate our additional cash requirements to fund cost of goods sold and operations to be roughly $1.7 million dollars, at which point revenues from sales should be sufficient to fund inventory and operational expenses. Our operations to date have been primarily funded through the issuance of debt and equity securities.

 

Coach Capital LLC

 

Specifically, on September 30, 2011, we entered into a promissory note with Coach Capital LLC in the amount of $111,000 (the “Coach Note”). The Coach Note is unsecured, bears interest at 10% per annum and is due on demand. The holder of the Coach Note may elect to convert all or part of the indebtedness owing under the Coach Note into our securities at such rate as that being offered to investors at the time of conversion. As of September 30, 2014, the unpaid principal balance and accrued interest under the Coach Note totaled $153,463.

 

ICG USA, LLC

 

On February 16, 2012, we entered into a Securities Purchase Agreement with and issued a Convertible Promissory Note in the amount of $200,000, at 6% interest per annum, to ICG USA, LLC (the “ICG Note”). As discussed below, ICG has assigned a total of $182,500 in principal to three other entities.

 

LG Capital Funding, LLC

 

On March 11, 2014, ICG assigned $75,000 in principal to LG Capital Funding, LLC (“LG”). LG issued a “Replacement Note” for the amount of $75,000. The note accrues interest at 8% per annum and matures March 11, 2014. Further, LG Capital may convert all or any amount of the principal at a rate equal to 50% of the lowest closing bid price for the five prior trading days, including the day of notice.

 

During March 2014, LG Capital advanced an additional $37,875 to us, subject to the same terms and Maturity date as the Replacement Note.

 

On June 17, 2014, we issued a Convertible Promissory Note to LG Capital in the amount of $20,000. The note accrues interest at 8% per annum and matures June 17, 2015. Further, LG Capital may convert all or any amount of the principal at a rate equal to 50% of the lowest closing bid price for the five prior trading days, including the day of notice.

 

During the nine months ended September 30, 2014, LG Capital elected to convert $75,000 in principal to common stock. As of September 30, 2014, the unpaid principal balance owed to LG was $26,818 net of discount in the amount of $31,057, with accrued interest of $2,381.

 

Tide Pool Ventures Corp.

 

On December 10, 2013, we issued a convertible promissory note to Tide Pool Venture Corp. (“Tide Pool”) in the amount of $11,500. The note bears interest at a rate of 9.875% per annum, is unsecured and matures on December 31, 2014. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 30% discount to the lowest volume weighted average price of the five trading days prior to the conversion date.

 

On February 20, 2014, ICG assigned $27,500 in principal to Tide Pool. We entered into a new Convertible Promissory Note agreement with Tide Pool. The replacement note bears interest at a rate of 10% per year, and matures on February 20, 2015. The Note is convertible to our common stock at a price equal to a 50% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

Also on February 20, 2014, we issued a new convertible promissory note to Tide Pool in the amount of $22,250. The Note bears interest at a rate of 10% per year, and matures on February 20, 2015. The Note is convertible to our common stock at a price equal to a 45% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

In April of 2014, ICG assigned $60,000 in principal to Tide Pool. We entered into a new Convertible Promissory Note with Tide Pool. The replacement note bears interest at a rate of 10% per year, and matures on February 20, 2015. The Note is convertible to our common stock at a price equal to a 50% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

On April 1, 2014, we issued a new convertible promissory note to Tide Pool in the amount of $42,500. The Note bears interest at a rate of 10% per year, and matures on April 1, 2015. The Note is convertible to our common stock at a price equal to a 45% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

8

 

During the nine months ended September 30, 2014, Tide Pool elected to convert $70,000 in principal into common stock. As of September 30, 2014, the unpaid principal balance owed to Tide Pool was $29,917, net of discount of $30,083, with accrued interest of $3,245.

 

WHC Capital, LLC, Series Bravo

 

On February 5, 2014, ICG assigned $20,000 in principal to WHC Capital, LLC, Series Bravo (“WHC”). We entered into a new Convertible Promissory Note agreement with WHC. The replacement note bears interest at a rate of 6% per year, and matures on February 5, 2015. The Note is convertible to our common stock at a price equal to a 40% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

On February 7, 2014, we issued a new convertible promissory note to WHC in the amount of $10,000. The Note bears interest at a rate of 10% per year, and matures on February 20, 2015. The Note is convertible to our common stock at a price equal to a 40% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

On May 8, 2014, we issued a new convertible promissory note to WHC in the amount of $20,000. The Note bears interest at a rate of 10% per year, and matures on May 8, 2015. The Note is convertible to our common stock at a price equal to a 40% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

On June 16, 2014, we issued a new convertible promissory note to WHC in the amount of $20,000. The Note bears interest at a rate of 10% per year, and matures on June 16, 2015. The Note is convertible to our common stock at a price equal to a 40% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

On August 5, 2014, we issued a new convertible promissory note to WHC in the amount of $10,000. The Note bears interest at a rate of 12% per year, and matures on August 5, 2015. The Note is convertible to our common stock at a price equal to a 45% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

On August 13, 2014, Tide Pool assigned $11,500 in principal debt and $1,506 in accrued interest to WHC. We entered into a new replacement Convertible Promissory Note with WHC. This replacement Note bears interest at a rate of 12% per year, and matures on August 13, 2015. The Note is convertible to our common stock at a price equal to a 45% discount to the average of the lowest three trading prices in the 30 days preceding the conversion date.

 

During the nine months ended September 30, 2014, WHC elected to convert $49,064 in principal into common stock. As of September 30, 2015, the unpaid principal balance owed to WHC was $9,425, net of discount of $34,517, with accrued interest of $1,791.

 

JMJ Financial

 

On May 7, 2012, we entered into a $275,000 Promissory Note (the “Note”) with JMJ Financial (“JMJ”). Under the Note, we received $50,000 in loan proceeds with JMJ. Additional sums up to a maximum total of $275,000 may be advanced in the sole discretion of JMJ. An additional $5,400 was advanced during April of 2013. The Note included a 10% original issue discount and is due in 1 year. The Note would not bear interest if paid in full within 90 days. Thereafter, a one-time interest charge of 5% was to be applied to the principal sum. The Note was convertible to common stock in whole or in part at conversion price equal to the lesser of $0.06 per share or 65% of the lowest trading price in the 25 trading days prior to the conversion. As of September 30, 2014, this Note has been fully converted to common stock.

 

Asher Enterprises, Inc. 

 

In addition, we have received debt financing from Asher Enterprises, Inc. under a series of Convertible Promissory Notes. All Notes issued to Asher Enterprises, Inc. bore interest at a rate of 8% per year and are convertible at a conversion price equal to 55% of the Market Price of our common stock on the conversion date.  For purposes of the Notes, “Market Price” was defined as the average of the 3 lowest closing prices for our common stock on the 10 trading days immediately preceding the conversion date.  The number of shares issuable upon conversion of the Notes is limited so that the holder’s total beneficial ownership of our common stock may not exceed 4.99% of the total issued and outstanding shares. This condition may be waived at the option of the holder upon not less than 61 days-notice.

 

As of September 30, 2014, all notes issued to Asher have been converted in full.

 

9

 

Continental Equities, LLC

 

On September 20, 2012, we received additional financing under a Convertible Promissory Note issued to Continental Equities, LLC (“Continental”) in the amount of $35,000. The note bears interest at a rate of 8% per annum, is unsecured and matures on May 15, 2013. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 42.5% discount to the lowest three average thirty day trading prices prior to the conversion date. In addition, we entered into a Registration Rights Agreement with Continental under which, upon demand of Continental, we must register resale of the common shares issuable upon conversion of the Note on Form S-1. In addition, Continental has “piggy-back” registration rights, which require us to include the re-sale of shares issuable upon conversion of the Note in any registration statement we may file, except for registrations on Forms S-4 or S-8. On May 20, 2013, we issued an additional Convertible Promissory Note to Continental in the amount of $13,000, bearing the same terms. During December of 2013, Tide Pool Ventures Corporation (“Tide Pool”) purchased the remaining balance of the notes. As of September 30, 2014, the Notes have been fully converted to common stock.

  

Chamisa Technology, LLC

 

On July 8, 2010, in connection with our reverse acquisition, we assumed a Promissory Note owed by Nyxio Technologies, LLC dated March 15, 2010 and issued to Chamisa Technology, LLC (“Chamisa”). The total principal and interest owing at the time we assumed the Note was $83,627. The Note bore interest at an annual rate of twelve percent (12%). From July of 2010 through December of 2010, additional advances were made under the Note in the principal amount of $64,491. In 2011, additional advances in the amount of $18,000 were made under the Note. On April 20, 2012, a portion of the balance due under the Note in the amount of $81,595 was assigned by Chamisa to Michelle Nelson, leaving total principal and interest due to Chamisa of $120,782. On April 25, 2012, we entered into an amendment of the Note portion purchased by Ms. Nelson. Under this amendment, Ms. Nelson agreed to forgive $56,595 of the principal balance in exchange for conversion rights on the remaining balance of $25,134. In accordance with the amendment, the remaining portion of the obligation was made convertible to common stock at $0.001 per share. Over the course of 2012, Ms. Nelson and various subsequent assignees converted the Nelson portion of the Note into common stock.

 

On December 1, 2013, Chamisa assigned the remaining portion of the Note still owing to Reign Investment Group, LLC. On December 1, 2013, Reign Investment Group, LLC assigned portions of the debt to various entities. During the year ended December 31, 2013, the original assignee agreed to forgive $21,500 of the debt in exchange for immediate conversion rights at a conversion rate of $0.001. As of December 31, 2013, the Company recognized an interest expense of $43,623 from BCF related to the conversion and gain on settlement of debt of $21,500.

 

As of September 30, 2014, the unpaid principal balance together with accrued interest totaled $106,895. We are still negotiating additional terms as it relates to this note.

 

Leland Martin Capital Partners, LLC

 

We have also entered into a series of small Convertible Promissory Notes with Leland Martin Capital Partners, LLC (“Leland Martin”). All Notes issued to Leland Martin bear interest at a rate of 10% per annum and are convertible to our common stock at a conversion price equal to a 45% discount to the lowest three ten day average trading prices prior to the conversion date. The amounts and due dates of the Leland Martin Notes are as follows:

 

Issue Date  Amount  Due Date
August 8, 2014  $15,000   August 8, 2015
August 27, 2014  $14,500   August 27, 2015
September 8, 2014  $5,000   September 8, 2015
September 18, 2014  $5,000   September 18, 2015

 

Beaufort Capital Partners, LLC

 

On September 8, 2014 , Tide Pool assigned $22,250 in principal debt and $1,158 in accrued interest to Beaufort Capital Partners, LLC (”Beaufort”). On October 13, 2014, we entered in to a Securities Exchange and Settlement Agreement with Beaufort regarding this debt. Under this Agreement, Beaufort may exchange the balance due to shares of our common stock at $0.00001 per share. 

 

On September 4, 2014 , we issued a new Original Issue Discount Convertible Promissory Note to Beaufort in the amount of $37,500. The Note has an original issue discount of $12,500, resulting in net proceeds to us of $25,000. The Note bears interest at a rate of 12% per annum, is convertible to common stock at a price of $0.0001 per share, and matures on March 4, 2014. We may prepay the note at $37,500 at any time prior to December 4, 2014. In connection with the Note, we also issued warrants to purchase 250,000,000 shares of common stock at a price of $0.0001 per share at any time from March 4, 2014 through September 4, 2019.

 

Cane Clark LLP

 

On July 7, 2014, we issued a Convertible Promissory Note to Cane Clark LLP (“Cane Clark”) in the amount of $106,374, for legal fees incurred through September 30, 2014. The note bears interest at a rate of 6% per annum, is unsecured and is payable in full upon the earlier of: (i) thirty days following written demand or, (ii) April, 7 2015. The Note is convertible into common stock in whole or in part at a variable conversion price equal to a 35% discount to the lowest three average twenty day trading prices prior to the conversion date.

 

On October 1, 2014, we issued an additional Convertible Promissory Note with similar terms in the amount of $14,975, for legal fees incurred from July 1, 2014 through September 30, 2014.

 

10

 

212 DB Liabilities

 

On October 1, 2014, our Board of Directors approved our entry into a Share Exchange Agreement (the “Agreement”) with 212 DB Corp., a private Delaware corporation (“212”). Under the Agreement, we acquired all of the issued and outstanding capital stock of 212 in exchange for: (i) our direct assumption of $7,126,658.27 in debt owed by 212 to a variety of note holders and other creditors; and (ii) our issuance of convertible preferred stock having a stated value of $10,000,000 to the former stockholders of 212.

 

In connection with the Agreement, we issued to 212’s former stockholders, on a pro-rata basis, a total of 1,000 shares of Series A Preferred Stock. As specified in the 1st Amended Certificate of Designation, our Series A Preferred Stock has a stated value of $10,000 per share and is convertible at the stated value into shares of our common stock at price equal to the greater of $0.0001 per share or 90% of the average of the closing bid prices for our common stock for the five trading days preceding the conversion. The conversion right is limited such that no holder of Series A Preferred Stock, following any conversion, is allowed to hold more than 4.99% of our issued and outstanding common stock. The Series A Preferred Stock is non-voting. Holders of Series A Preferred Stock are entitled to a preference in liquidation, up to the stated value per share, over the holders of our common stock.

 

Of the $7,126,658.27 in 212 debt that we assumed directly under the Agreement, $6,200,000 consists of convertible debentures (the “212 Debentures”), and $926,658.27 consists of general accounts payable. Under the Agreement, the 212 Debentures shall be amended such that the terms of conversion for such notes shall be substantially the same as the terms for the conversion shares of our Series A Preferred Stock.

 

To meet our future objectives, we will need to meet our revenue objectives and/or sell additional equity and debt securities, which could result in dilution to current shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

 

Our current cash requirements are significant due to planned development and marketing of our current products, and we anticipate generating losses.  In order to execute on our business strategy, we will require additional working capital, commensurate with the operational needs of our planned marketing, development and production efforts.  Our management believes that we should be able to raise sufficient amounts of working capital through debt or equity offerings, as may be required to meet our short-term obligations.  However, changes in our operating plans, increased expenses, acquisitions, or other events, may cause us to seek additional equity or debt financing in the future.  We anticipate continued and additional marketing, development and production expenses.  Accordingly, we expect to continue to use debt and equity financing to fund operations for the next twelve months, as we look to expand our asset base and fund marketing, development and production of our products.

 

There are no assurances that we will be able to raise the required working capital on terms favorable, or that such working capital will be available on any terms when needed.  Any failure to secure additional financing may force us to modify our business plan.  In addition, we cannot be assured of profitability in the future.

 

Off Balance Sheet Arrangements

 

As of September 30, 2014, there were no off balance sheet arrangements.

 

Going Concern

 

We have negative working capital, have incurred losses since inception, and have not yet received significant revenues from sales of products or services. These factors create substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

 

Our ability to continue as a going concern is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

11

 

Item 4. Controls and Procedures

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2014. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Giorgio Johnson, and our Chief Financial Officer, Mark Gustavson. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2014, our disclosure controls and procedures are not effective. There have been no changes in our internal controls over financial reporting during the quarter ended September 30, 2014.

 

In performing the above-referenced assessment, our management identified the following material weaknesses:

 

 i)

We have insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis.

 

 ii)

We do not have an audit committee or an independent audit committee financial expert. While not being legally obligated to have an audit committee or independent audit committee financial expert, it is the management’s view that to have an audit committee, comprised of independent board members, and an independent audit committee financial expert is an important entity-level control over our financial statements.

 

 iii)

We did not perform an entity level risk assessment to evaluate the implication of relevant risks on financial reporting, including the impact of potential fraud related risks and the risks related to non-routine transactions, if any, on our internal control over financial reporting. Lack of an entity-level risk assessment constituted an internal control design deficiency which resulted in more than a remote likelihood that a material error would not have been prevented or detected, and constituted a material weakness.

 

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Limitations on the Effectiveness of Internal Controls

 

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error.   Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

 

12

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

On February of 2013, we were sued in the Multnomah County Circuit Court of the State of Oregon by four former consultants, Joe Fijak, Steve Wiseman, Richard Walsh, and Robert Calderella (the “Fijak Litigation”). The plaintiffs in the Fijak Litigation allege that we breached consulting agreements with them by failing to pay compensation required by the agreements. The Complaint filed by the Plaintiffs seeks damages in the amount of $501,000, but management does not believe a recovery at or near that amount is likely. We contend that we complied with the terms of the agreements until such time as they were terminated by the Plaintiffs and that the Plaintiffs performed very limited services and, in some cases, no services at all. After being served with the Complaint, we removed the Fijak Litigation to the United States District Court for the District of Oregon, where it remains pending as Wiseman et al v. Nyxio Technologies Corporation et al, Case No. 3:14-cv-00420-PK. Following removal of the action to federal court, we have been engaged in active settlement discussions with the Plaintiffs. On March 25, 2014, the court stayed the proceedings for a period of ninety (90) days in order to allow the parties to continue settlement discussions. At this time, settlement discussions are continuing and we believe this matter will be settled.

 

Item 1A: Risk Factors

 

A smaller reporting company is not required to provide the information required by this Item. Risk factors regarding our current business can be found in our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on April 16, 2012.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

Exhibit Number Description of Exhibit
10.1 Convertible Promissory Note issued to WHC Capital, LLC, Series Bravo, dated August 5, 2014 ($10,000)
10.2 Convertible Promissory Note issued to WHC Capital, LLC, Series Bravo, dated August 13, 2014 ($11,500)
10.3 Convertible Promissory Note issued to Leland Martin Capital Partners, LLC, dated August 8, 2014 ($15,000)
10.4 Convertible Promissory Note issued to Leland Martin Capital Partners, LLC, dated August 27, 2014 ($14,500)
10.5 Convertible Promissory Note issued to Leland Martin Capital Partners, LLC, dated September 8, 2014 ($5,000)
10.6 Convertible Promissory Note issued to Leland Martin Capital Partners, LLC, dated September 18, 2014 ($5,000)
10.7 Original Issue Discount Convertible Promissory Note issued to Beaufort Capital Partners, LLC, dated September 4, 2014 ($37,500)
10.8 Warrant issued to Beaufort Capital Partners, LLC (250,000,000 shares)
10.9 Convertible Promissory Note issued to Cane Clark LLP, dated July 7, 2014 ($106,374)
10.10 Convertible Promissory Note issued to Clark Corporate Law Group LLP, dated October 1, 2014 ($14,875)
10.11 Securities Exchange and Settlement Agreement with Beaufort Capital Partners
31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 Materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 formatted in Extensible Business Reporting Language (XBRL).

 

13

 

 SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  Nyxio Technologies Corporation
   
Date:

November 19, 2014

   
 

By: /s/ Giorgio Johnson

             Giorgio Johnson

Title:    Chief Executive Officer

 

 

  Nyxio Technologies Corporation
   
Date:

November 19, 2014

   
 

By: /s/ Mark Gustavson

             Mark Gustavson

Title:    Chief Financial Officer

 

14



NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

Principal Amount: $10,000

Date: August 5, 2014

 

CONVERTIBLE PROMISSORY NOTE

 

NYXIO Technologies, Corp., (hereinafter called the "Issuer'' or "NYXO"), hereby promises to pay to the order of WHC Capital, LLC, a Delaware Limited Liability Company, or its registered assigns (the "Holder") the sum of $10,000, together with any interest as set forth herein, on or before August 5, 2015 (the "Maturity Date"), and to pay interest on the unpaid principal balance hereof at the rate of Twelve percent (12%) (the "Interest Rate") per annum from the date hereof (the "Issue Date") until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise.

 

This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid ("Default Interest"). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock) shall be made in lawful money of the United States of America.

 

All payments shall be made at such address as the Holder shall hereafter give to the Issuer by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term "business day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.

Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the supporting documents of same date (attached hereto).

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Issuer and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1                 Conversion Right. The Holder shall have the right and at any time during the period beginning on the date of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Issuer into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion "); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Issuer subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Issuer, and the provisions of the conversion limitation shall continue to apply until such 6lst day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, (the ''Notice of Conversion''), delivered to the Issuer by the Holder in accordance with the Sections below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Issuer before 6:00 p.m., New York, New York time on such conversion date (the "Conversion Date").

 

The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Issuer's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Issuer's option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts owed to the Holder.

 

 
 

 

1.2                 Conversion Price.

 

(a)                 Calculation of Conversion Price. Holder, at its discretion, shall have the right to convert this Note in its entirety or inpart(s) into common stock of the Company valued at a Forty Five Percent (45%) discount off of the average of the Three (3) lowest intra-day trading prices for the Company's common stock during the Thirty (30) trading days immediately preceding a conversion date, as reported by Quotestream.

 

(b)                 Conversion Price During Major Announcements. Notwithstanding anything contained in the preceding section to the contrary, in the event the Issuer (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Issuer is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Issuer or (ii) any person, group or entity (including the Issuer) publicly announces a tender offer to purchase 50% or more of the Issuer's Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section. For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section has been made, the date upon which the Issuer (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section l .2(b) to become operative.

 

1.3                 Authorized Shares. The Issuer covenants that during the period the conversion right exists, the Issuer will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. The Issuer is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Issuer's obligations.

 

The Issuer represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Issuer shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Issuer shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.

 

The Issuer (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Issuer does not maintain the Reserved Amount it will be considered an Event of Default as defined in this Note.

 

1.4                 Method of Conversion.

 

(a)                 Mechanics of Conversion. This Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Issuer a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time).

 

(b)                 Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Issuer unless the entire unpaid principal amount of this Note is so converted. The Holder and the Issuer shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Issuer, so as not torequire physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Issuer shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Issuer, whereupon the Issuer will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request; representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

 

(c)                 Payment of Taxes. The Issuer shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Issuer shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder's account) requesting the issuance thereof shall have paid to the Issuer the amount of any such tax or shall have established to the satisfaction of the Issuer that such tax has been paid.

 

2
 

 

(d)                 Delivery of Common Stock Upon Conversion. Upon receipt by the Issuer from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section, the Issuer shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the "Deadline'') (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

(e)                 Obligation of Issuer to Deliver Common Stock. Upon receipt by the Issuer of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Issuer defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Issuer's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Issuer to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Issuer, and irrespective of any other circumstance which might otherwise limit such obligation of the Issuer to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Issuer before 6:00 p.m., New York, New York time, on such date.

 

(f)                  Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Issuer is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Issuer shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder's Broker with OTC through its Deposit Withdrawal Agent Commission ("DWAC") system.

 

(g)                 Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1 .3 above, which failure shall be governed by such Section) the Issuer shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Issuer fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Issuer by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Issuer agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section are justified. Any delay or failure of performance by the Issuer hereunder shall be excused if and to the extent caused by Force Majeure. For purposes of this agreement, Force Majeure shall mean a cause or event that is not reasonably foreseeable and/or caused by the Issuer, including acts of God, fires, floods, explosions, riots wars, hurricanes, etc.

 

1.5                 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Issuer or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Issuer who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor. Except as otherwise provided herein (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLE PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

 

The legend set forth above shall be removed and the Issuer shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Issuer or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of cow1sel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration , such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to this note.

 

3
 

 

1.6                 Effect of Certain Events.

 

(a)                 Effect of Merger. Consolidation. Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Issuer, the effectuation by the Issuer of a transaction or series of related transaction s in which more than 50% of the voting power of the Issuer is disposed of, or the consolidation, merger or other business combination of the Issuer with or into any other Person (as defined below) or Persons when the Issuer is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article ill) pursuant to which the Issuer shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article Ill) or (ii) be treated pursuant to Section l.6(b) hereof. "Person" shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

(b)                 Adjustment Due to Merger. Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization , or other similar event, as a result of which shares of Common Stock of the Issuer shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Issuer or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Issuer other than in connection with a plan of complete liquidation of the Issuer, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions sha11 be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Issuer shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Issuer) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c)                 Adjustment Due to Distribution. If the Issuer shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Issuer's shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution , to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

(d)                 Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Issuer issues or sells, or in accordance with this Section hereof is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Issuer in such Dilutive Issuance.

 

The Issuer shall be deemed to have issued or sold shares of Common Stock if the Issuer in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock ("Convertible Securities") (such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as "Options") and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon the exercise of such Options" is determined by dividing (i) the total amount, if any, received or receivable by the Issuer as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Issuer upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

 

Additionally, the Issuer shall be deemed to have issued or sold shares of Common Stock if the Issuer in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon such conversion or exchange" is determined by dividing (i) the total amount, if any, received or receivable by the Issuer as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Issuer upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

 

4
 

 

(e)                Purchase Rights. If, at any time when any Notes arc issued and outstanding, the Issuer issues any convertible securities or rights to purchase stock, warrants, securities or other property (the "Purchase Rights") pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon

complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

(f)                Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Issuer, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Issuer shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

 

1.7                 Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Issuer issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Issuer can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the "Maximum Share Amount"), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Issuer fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Issuer or any of its securities on the Issuer's ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.

 

1.8                 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder's allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Issuer to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Issuer) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Issuer shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Issuer's failure to convert this Note.

 

1.9                 Prepayment. Maker may prepay this Note, in accordance with the following schedule: Ifwithin 180 calendar days of the execution of this Note, $135% of all outstanding principal and interest due on each outstanding Note in one payment; After 180 calendar days of this Note being executed, any prepayments must be approved by both parties in writing.

 

ARTICLE II. CERTAIN COVENANTS

 

2.1                 Distributions on Capital Stock. So long as the Issuer shall have any obligation under this Note, the Issuer shall not without the Holder's written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders' rights plan which is approved by a majority of the Issuer's disinterested directors.

 

2.2                 Restriction on Stock Repurchases. So long as the Issuer shall have any obligation under this Note, the Issuer shall not without the Holder's written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Issuer or any warrants, rights or options to purchase or acquire any such shares.

 

2.3                 Borrowings. So long as the Issuer shall have any obligation under this Note, the Issuer shall not, without the Holder's written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership , joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Issuer has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

 

5
 

 

2.4                 Sale of Assets. So long as the Issuer shall have any obligation under this Note, the Issuer shall not, without the Holder's written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.5                 Advances and Loans. So long as the Issuer shall have any obligation under this Note, the Issuer shall not, without the Holder's written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Issuer, except loans, credits or advances (a) in existence or committed on the date hereof and which the Issuer has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

 

ARTICLE III. EVENTS OF DEFAULT

 

If any of the following events of default (each, an "Event of Default") shall occur:

 

3.1                Failure to Pay Principal or Interest. The Issuer fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

 

3.2                Conversion and the Shares. The Issuer fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Issuer directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Issuer to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Issuer to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Issuer's transfer agent in order to process a conversion, such advanced funds shall be paid by the Issuer to the Holder within forty eight (48) hours of a demand from the Holder.

 

3.3                Breach of Covenants. The Issuer breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (l0) days after written notice thereof to the Issuer from the Holder.

 

3.4                Breach of Representations and Warranties. Any representation or warranty of the Issuer made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.5                Receiver or Trustee. The Issuer or any subsidiary of the Issuer shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

3.6                Judgments. Any money judgment, writ or similar process shall be entered or filed against the Issuer or any subsidiary of the Issuer or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.7                Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Issuer or any subsidiary of the Issuer.

 

3.8                Delisting of Common Stock. The Issuer shall fail to maintain the listing of the Common Stock on at least one of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

 

3.9                Failure to Comply with the Exchange Act. The Issuer shall fail to comply with the reporting requirements of the Exchange Act; and/or the Issuer shall cease to be subject to the reporting requirements of the Exchange Act.

 

6
 

 

3.10            Liquidation. Any dissolution, liquidation, or winding up of Issuer or any substantial portion of its business.

 

3.11            Cessation of Operations. Any cessation of operations by Issuer or Issuer admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Issuer's ability to continue as a "going concern" shall not be an admission that the Issuer cannot pay its debts as they become due.

 

3.12            Maintenance of Assets. The failure by Issuer to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

 

3.13            Financial Statement Restatement. The restatement of any financial statements filed by the Issuer with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the original financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or supporting documents.

 

3.14            Reverse Splits. The Issuer effectuates a reverse split of its Common Stock without at least twenty (20) days prior written notice to the Holder.

 

3.15            Replacement of Transfer Agent. In the event that the Issuer proposes to replace its transfer agent, the Issuer fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Issuer and the Issuer.

 

3.16            Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Issuer of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Issuer, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder . "Other Agreements" means, collectively, all agreements and instruments between, among or by: (1) the Issuer, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term "Other Agreements" shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Issuer to the Holder.

 

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Issuer shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE ISSUER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable through the delivery of written notice to the Issuer by such Holders (the "Default Notice"), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3, 1 hereof), the Note shall become immediately due and payable and the Issuer shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or (ii) the "parity value" of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the "Default Amount") and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

 

If the Issuer fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Issuer remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Issuer, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Issuer equal to the Default Amount divided by the Conversion Price then in effect.

 

7
 

 

ARTICLE IV. MISCELLANEOUS

 

4.1                Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2                Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Issuer, to:

 

Attn:

Facsimile:

 

If to the Holder:

 

WHC Capital, LLC.

200 Stonehinge Lane,

Suite 3

Carle Place, NY. 11514

Tel: 718.530.0182

 

 

4.3                Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Issuer and the Holder. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4                Assignability. This Note shall be binding upon the Issuer and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an "accredited investor" (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

 

4.5                Cost of Collection. If default is made in the payment of this Note, the Issuer shall pay the Holder hereof costs of collection, including reasonable attorneys' fees.

 

4.6                Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Issuer and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

8
 

 

4.7                Certain Amounts. Whenever pursuant to this Note the Issuer is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Issuer and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Issuer represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Issuer and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

4.8                Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.9                Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Issuer shall provide the Holder with prior notification of any meeting of the Issuer's shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Issuer of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution , any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Issuer or any proposed liquidation, dissolution or winding up of the Issuer, the Issuer shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution , right or other event to the extent known at such time. The Issuer shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

 

4.10            Remedies. The Issuer acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Issuer acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Issuer of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining , preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

IN WITNESS WHEREOF, Issuer has caused this Note to be signed in its name by its duly authorized officer:

 

NYXIO TECHNOLOGIES, CORP.

 

By: /s/ Giorgio Johnson

Print: Giorgio Johnson

Title/Date: President/ CEO 8/5/2014

 

9
 



NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (H) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

Principal Amount: $13,005.73

Date: August 13, 2014 (Tacking Back to December 30, 2013)

 

CONVERTIBLE PROMISSORY NOTE

 

NYXIO Technologies Corp., (hereinafter called the "Borrower" or "NYXO"), hereby promises to pay to the order of WHC Capital, LLC, a Delaware Limited Liability Company, or its registered assigns (the "Holder") the sum of $13,005.73, together with any interest as set forth herein, on August 13,2015 (the "Maturity Date"), and to pay interest on the unpaid principal balance hereof at the rate of 9.875% (the "Interest Rate") per annum from the date hereof (the "Issue Date") until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note shall serve in lieu of (and tack back to) $13.005.73 of convertible debt owing to Tide Pool Ventures Corporation, pursuant to that certain $11.500 Convertible Promissory Note dated December 10. 2013 (attached hereto), and incorporate all interests and charges contemplated therein.

 

This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid ("Default Interest"). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock) shall be made in lawful money of the United States of America.

 

All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term "business day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.

 

Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the supporting documents of same date (attached hereto).

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1 Conversion Right. The Holder shall have the right and at any time during the period beginning on the date of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion"); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, (the "Notice of Conversion"), delivered to the Borrower by the Holder in accordance with the Sections below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the "Conversion Date").

 

The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Borrower's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Borrower's option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts owed to the Holder.

 

 
 

 

1.2 Conversion Price.

 

(a)                 Calculation of Conversion Price. Holder, at its discretion, shall have the right to convert this Note in its entirety or in part(s) into common stock of the Company valued at a Forty Five Percent (45%) discount off the average of the Three (3) lowest intra-day trading prices for the Company's common stock during the Thirty (30) trading days immediately preceding a conversion date, as reported by Quotestream.

 

(b)                 Conversion Price During Major Announcements. Notwithstanding anything contained in the preceding section to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower's Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section. For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

 

1.3 Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Borrower's obligations.

 

The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.

 

The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default as defined in this Note.

 

1.4 Method of Conversion.

 

(a)                 Mechanics of Conversion. This Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m.. New York, New York time).

 

(b)                 Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

 

(c)                 Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder's account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

 

(d)                 Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within Five (5) business days after such receipt (the "Deadline") (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

2
 

 

(e)                 Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

 

(f)                  Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder's Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.

 

(g)                 Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section are justified. Any delay or failure of performance by the Borrower hereunder shall be excused if and to the extent caused by Force Majeure. For purposes of this agreement, Force Majeure shall mean a cause or event that is not reasonably foreseeable and/or caused by the Borrower, including acts of God, fires, floods, explosions, riots wars, hurricanes, etc.

 

1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred to an "affiliate" (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor. Except as otherwise provided herein (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

 

The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to this note.

 

3
 

  

1.6Effect of Certain Events.

 

(a)                 Effect of Merger. Consolidation. Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person" shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

(b)                 Adjustment Due to Merger. Consolidation. Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c)                 Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower's shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

(d)                 Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section hereof is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

 

The Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock ("Convertible Securities") (such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as "Options") and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon the exercise of such Options" is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

 

Additionally, the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon such conversion or exchange" is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

 

4
 

  

(e)                 Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the "Purchase Rights") pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

(f)                 Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

 

1.7                Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the "Maximum Share Amount"), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower's ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.

 

1.8                Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder's allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower's failure to convert this Note.

 

1.9                Prepayment. Maker may prepay this Note, in accordance with the following schedule: If within 180 calendar days of the execution of this Note, $135% of all outstanding principal and interest in one payment;. After 180 calendar days of this Note being executed, any prepayments must be approved by both parties in writing.

 

ARTICLE II. CERTAIN COVENANTS

 

2.1                Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders' rights plan which is approved by a majority of the Borrower's disinterested directors.

 

2.2                Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

 

2.3                Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

 

5
 

 

2.4                Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.5                Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

 

ARTICLE III. EVENTS OF DEFAULT

 

If any of the following events of default (each, an "Event of Default") shall occur:

 

3.1                Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

 

3.2                Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower's transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder.

 

3.3                Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder

 

3.4               Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.5               Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

3.6               Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.7               Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.8               Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

 

3.9               Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.10            Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

6
 

 

3.11            Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower's ability to continue as a "going concern" shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.12            Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

 

3.13            Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the original financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or supporting documents.

 

3.14            Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without at least twenty (20) days prior written notice to the Holder.

 

3.15            Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.16            Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Borrower, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. "Other Agreements" means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term "Other Agreements" shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable through the delivery of written notice to the Borrower by such Holders (the "Default Notice"), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or (ii) the "parity value" of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the "Default Amount") and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

 

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

 

7
 

 

ARTICLE IV. MISCELLANEOUS

 

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower to:

 

1330 SS 3rd Ave

Portland, OR 97201

Attn: Giorgio Johnson

 

If to the Holder:

 

WBC Capital, LLC.

200 Stonehinge Lane

Suite 3

Carle Place, NY 11514

Facesmile: 212-574-3326

 

4.3 Amendments. This Note and any provisions hereof may only be amended by by an instrument in writing signed by the Borrower and the Holder. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4                Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an "accredited investor" (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

 

4.5                Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys' fees.

 

4.6                Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

4.7                Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

8
 

 

4.8                Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.9                Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower's shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

 

4.10            Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized

 

NYXIO TECHNOLOGIES, CORP.

 

By: /s/ Giorgio Johnson

Print: Giorgio Johnson

Title/Date: President/CEO 8/13/14

 

9
 



THIS CONVERTIBLE PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT FOR DISTRIBUTION AND MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS LEGEND SHALL BE ENDORSED UPON ANY CONVERTIBLE PROMISSORY NOTE ISSUED IN EXCHANGE FOR THIS CONVERTIBLE PROMISSORY NOTE.

 

NYXIO TECHNOLOGIES CORP.

 

ISSUED DATE: AUGUST 8, 2014 $15,000.00

 

CONVERTIBLE PROMISSORY NOTE

 

Due: August 8, 2015

 

NYXIO TECHNOLOGIES CORP., a Nevada corporation (the "Company"), for value received, hereby promises to pay to LELAND MARTIN CAPITAL PARTNERS, LLC (the "Holder") on the 8th day of August, 2015 (the "Maturity Date") at the offices of the Company, 1330 SW 3rd Ave, Portland, Oregon 97201 the principal sum of FIFTEEN THOUSAND DOLLARS ($15,000.00) in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay simple interest on said principal sum at the rate of 10% per annum from the date hereof through the Maturity Date. Any accrued and unpaid interest shall be paid on the Maturity Date.

 

1.                   Registered Owner. The Issuer may consider and treat the person in whose name this Note shall be registered as the absolute owner thereof for all purposes whatsoever (whether or not this Note shall be overdue) and the Issuer shall not be affected by any notice to the contrary. Subject to the provisions hereof, the registered owner of this Note shall have the right to transfer it by assignment and the transferee thereof, upon his registration as owner of this Note, shall become vested with all the powers and rights of the transferor. Registration of any new owner shall take place upon presentation of this Note to the Issuer at its offices together with the Note Assignment Form attached hereto duly executed. In case of transfers by operation of law, the transferee shall notify the Issuer of such transfer and of his address, and shall submit appropriate evidence regarding the transfer so that this Note may be registered in the name of the transferee. This Note is transferable only on the books of the Issuer by the Holder on the surrender hereof, duly endorsed. Communications sent to any registered owner shall be effective as against all holders or transferees of this Note not registered at the time of sending the communication. In the event of the assignment by the Holder of a portion of the principal amount of this Note, the transferee thereof shall not have the right to exercise the Conversion Right (as hereinafter defined) unless the entire remaining principal portion of this Note is converted simultaneously therewith.

 

2.Conversion.

 

2.1                Conversion Right. The Holder shall have the right from time to time, and at any time during the period commencing on the Issue Date and ending the later of (i) the Maturity Date and (ii) the date of payment of the remaining outstanding principal amount, plus any accrued and unpaid interest of this Note, to convert the outstanding and unpaid principal amount of this Note (each a "Conversion") into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Issuer into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion"); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Issuer subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso; provided further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Issuer, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the "Notice of Conversion"), delivered to the Issuer by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Issuer before 6:00 p.m., New York, New York time on such conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Issuer's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date.

 

2.2                Conversion Price. The Conversion Price (the "Conversion Price") shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Issuer relating to the Issuer's securities or the securities of any subsidiary of the Issuer, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 55% multiplied by the Market Price (as defined herein) (representing a discount rate of 45%). "Market Price" means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Issuer via facsimile (the "Conversion Date"). "Trading Price" means, for any security as of any date, the prices of the security on the Over-the-Counter Bulletin Board (the "OTCBB") as reported by a reliable reporting service ("Reporting Service") mutually acceptable to Issuer and Holder, or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no price of such security is available in any of the foregoing manners, the average of the Trading prices of any market makers for such security that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Issuer and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. "Trading Day" shall mean any day on which the Common Stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 

1
 

 

2.3                Anti-Dilution Provisions.

 

2.3.1           Adjustments for Stock Dividends; Combinations, Etc. In the event that the Issuer, at any time or from time to time hereafter, shall (i) declare any dividend or other distribution on its Common Stock payable in Common Stock of the Issuer or in securities convertible into or exchangeable for Common Stock, including without limitation rights; (ii) effect a subdivision of its outstanding Common Stock into a greater number of shares of Common Stock by reclassification, stock split or otherwise than by payment of a dividend in shares of Common Stock; (iii) effect a combination or consolidation of its outstanding Common Stock into a lesser number of shares of Common Stock by reclassification, reverse split or otherwise; (iv) issue by reclassification, exchange or substitution of its Common Stock any shares of capital stock of the Issuer; or (v) effect any other transaction having similar effect, then the Holder may convert into the exchangeable securities. The purpose of the adjustment shall be that, in the event of a conversion at any time after the occurrence of any event described in (i) through (v) above, the Holder shall be entitled to receive the shares of Conversion Stock (or other securities) to which such Holder would have been finally entitled, after giving effect to the occurrence of such event, as if such Holder had converted this Note immediately prior to the occurrence of such event. An adjustment made pursuant to this Section 2.3.1 shall become effective immediately after the record date in the case of a dividend or other distribution and shall become effective immediately upon the effective date in the case of a subdivision, combination, reclassification, exchange or substitution. The Corporation shall take no such action with respect to the Common Stock unless the Corporation shall simultaneously reserve out of the authorized, unissued and unreserved shares of common stock a sufficient number of shares of Common Stock to be available for full conversion of the Note at the new Conversion Price.

 

2.3.2           Adjustment for Consolidation or Merger. In case of any consolidation or merger to which the Issuer is a party, other than a merger or consolidation in which the Issuer is the surviving or continuing corporation and which does not result in any reclassification of, or change (other than a change in par value or from par value to no par value or from no par value to par value, or as a result of a subdivision or combination) in, outstanding Common Stock, then, as part of and as a condition to such transaction, provision shall be made so that, in the event of a conversion, the Holder of this Note, shall receive, in lieu of the securities and property receivable upon the conversion of this Note prior to consummation of the transaction, the kind and amount of shares or other securities and property receivable upon such consolidation or merger by a holder of the number of shares of Common Stock into which this Note would have been converted immediately prior to such consolidation or merger had the conversion occurred, all subject to further adjustment as provided in Section 2.3.1; in each such case, the terms of this Note shall be applicable to the securities or property receivable upon the conversion of this Note after such consummation. In any such case, appropriate adjustment shall be made in the application of this Section 2 with respect to the rights of the Holder of this Note after the transaction to the end that the provisions of this Section 2 shall be applicable after that event. The Corporation shall take no such action with respect to the Common Stock unless the Corporation shall simultaneously reserve out of the authorized, unissued and unreserved shares of such class or series into which the Common Stock has been changed a sufficient number of shares of such class or series into which the Common Stock has been changed to be available for full conversion of the Note at the new Conversion Price.

 

2.4                Reservation of Shares. The Issuer will at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance and delivery upon conversion of this Note, free of preemptive or rights of purchase, the number of shares of Conversion Stock issuable upon conversion of this Note at the minimum Conversion Price. The Issuer covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable. . The initial reserve of shares is 300,000,000, which may be increased automatically in the event the initial reserve is exhausted

 

2.5                Fractional Shares. The Issuer shall not be required to issue certificates representing fractions of shares, nor shall it be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the Issuer and the Holder that all fractional interests shall be eliminated and that all issuances of Common Stock be rounded up to the nearest whole share.

 

2.6                Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Issuer, either at law or in equity, and the rights of the Holder are limited to those expressed in this Note.

 

2.7                Certificate. When the Conversion Price is adjusted pursuant to the provisions hereof, the Issuer shall file with its official corporate records a certificate of its chief financial or accounting officer setting forth in detail the facts requiring such adjustment, the computation thereof and the adjusted Conversion Price, and shall mail a copy of the certificate to the Holder.

 

2.8                DTC Status. The Company's Common Stock are currently eligible for DTC book-entry delivery, settlement and depository services and accordingly are not subject to a deposit transfer restriction ("Deposit Chill"). In the event, the Company's Common Stock becomes subject to a Deposit Chill, the Variable Conversion Rate shall be amended to 35% multiplied by the Market Price (as defined herein) (representing a discount rate of 65%).

 

2.9                Short Sales. Other than the transaction contemplated hereunder, the Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, executed any disposition, including Short Sales, in the securities of the Company during the period commencing from the time that such Investor first received a term sheet (written or oral) from the Company. In addition, the Investor shall not engage in Short Sales of the Company's in the future. "Short Sales" shall include all "short sales" as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock)

 

2.10            Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 2.10, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the "Deadline") (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement

 

2.11            Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Note, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

 

2
 

 

2.12            Delivery of Common Stock by Electronic Transfer. In

lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder and its compliance with the provisions contained in this Note, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.

 

2.13 Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock through willful or deliberate acts on the part of the Borrower. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section 2.13 are justified.

 

3.                   Redemption. The Borrower shall have no right of prepayment.

 

4.                   Defaults. If any one or more of the following shall (Events of Default) shall occur:

 

a.                   the Issuer shall (i) admit in writing its inability to pay its debts generally as they mature; (ii) make a general assignment for the benefit of creditors; (iii) fail or be unable to pay its debts as they mature iv) be adjudicated a bankrupt or insolvent; (v) file a voluntary petition in bankruptcy or a petition or an answer seeking an arrangement with creditors; (vi) take advantage of any bankruptcy, insolvency or readjustment of debt law or statute or file an answer admitting the material allegations of a petition filed against it in any proceeding under any such law; (vii) apply for or consent to the appointment of a receiver, trustee or liquidation for all or a substantial portion of its assets; (viii) have an involuntary case commenced against it under the Federal bankruptcy laws, which case is not dismissed or stayed within thirty (30) days; or (viii) fail to pay its taxes on a timely basis; ix) violate any covenant provided for in this Note, and such violation shall continue unremedied for a period of fifteen (15) days following the giving of written notice thereof from the Holder;

 

b.                   any judgment is entered against the Issuer which is not bonded or discharged within 30 days;

 

c.                    a levy of any sort is made on or against some or all of the assets of the Issuer.

 

d.                   the sale, transfer, assignment or disposition of any of the Issuer's assets that are material to the business and/or operations of the Issuer's business. then, at any time thereafter and unless such Event of Default shall have been cured or shall have been waived in writing by the Holder (which waiver shall not be deemed a waiver of any subsequent default), at the option of the Holder and in the Holder's sole discretion, the Holder may, by written notice to the Issuer, declare the entire unpaid principal amount of this Note then outstanding, together with accrued interest thereon, to be forthwith due and payable, whereupon the same shall become forthwith due and payable.

 

e.                    Upon an event of default the Debenture will become immediately due and payable in an amount in cash (the "Default Prepayment Amount") equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Debenture plus (x) accrued and unpaid interest on the unpaid principal amount of this Debenture to the Default Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) hereof.

 

 

5.                   Investment Intent. The Holder, by its acceptance hereof, hereby represents and warrants that this Note is being acquired, and the Common Stock issuable upon the conversion of this Note will be acquired, for investment purposes only and without a view to the distribution thereof, and may be transferred only in compliance with the Act. Unless, prior to the conversion of this Note, the issuance of the Common Stock has been registered with the Securities and Exchange Commission pursuant to the Act, the Note Conversion Form shall be accompanied by a representation of the Holder to the Issuer to the effect that such securities are being acquired for investment and not with a view to the distribution thereof, and such other representations and documentation as may be reasonably required by the Issuer, unless in the opinion of counsel to the Issuer such representations or other documentation are not necessary to comply with the Act.

 

6.                   Default Rate of Interest; Costs of Collection. In the event the Issuer shall default in the payment of this Note when due, then (i) effective with such date of default, the interest rate payable hereunder shall be increased to eighteen percent (18%) per annum and (ii) the Issuer agrees to pay, in addition to unpaid principal and interest, all the costs and expenses incurred in effecting collection hereunder or enforcing the terms of this Note, including reasonable attorneys' fees.

 

3
 

 

7.                   Applicable Law. This Note is issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of New York.

 

8.                   Notices. Any notice required or permitted to be given pursuant to this Note shall be deemed to have been duly given when delivered by hand or sent by certified or registered mail, return receipt requested and postage prepaid, overnight mail or telecopier as follows:

 

If to the Holder:

 

Leland Martin Capital Partners, LL

219 East 69th St.

New York, NY 10021

 

If to the Company:

 

Nyxio Technologies Corp.

1330 SW 3rd Ave

Portland, Oregon 97201

Attention: Giorgio Johnson

 

or at such other address as the Holder or the Issuer shall designate by notice to the other given in accordance with this Section 8.

 

9.                   Miscellaneous. This Note constitutes the rights and obligations of the Holder and the Issuer. No provision of this Note may be modified except by an instrument in writing signed by the party against whom the enforcement of any modification is sought. The Issuer shall not take any action that would impair the rights and privileges of the Holder herein or avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Issuer, but will at all times act in good faith to assist in carrying out the provisions of this Note, including the Conversion rights provided in paragraph 2 herein and will take all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder of the Note.

 

The waiver by the Holder of a breach of any provision of this Note shall not operate or be construed as a waiver of any subsequent breach.

 

If any provision, or part thereof, of this Note shall be held to be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any way affect or render invalid or unenforceable any other provisions of this Note and this Note shall be carried out as if such invalid or unenforceable provision, or part thereof, had been reformed, and any court of competent jurisdiction is authorized to so reform such invalid or unenforceable provision, or part thereof, so that it would be valid, legal and enforceable to the fullest extent permitted by applicable law.

 

In no event shall the rate of interest payable hereunder exceed the maximum rate permitted by applicable law.

 

No provision of this Note shall alter or impair the absolute and unconditional obligation of the Issuer to pay the principal of, and interest on, this Note in accordance with the provisions hereof.

 

The Issuer agrees that irreparable damage would occur in the event that any of the provisions of this Note were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, except with respect to the payment of the amounts due hereunder, the Holder of this Note shall be entitled to swift specific performance, injunctive relief or other equitable remedies to prevent or cure breaches of the provisions of this Note and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which the Holder may be entitled under this Note.

 

[SIGNATURE PAGE FOLLOWS]

 

4
 

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed on its behalf, in its corporate name, by its duly authorized officer, all as of the day and year first above written.

 

NYXIO TECHNOLOGIES CORP.

 

By: /s/ Giorgio Johnson

Giorgio Johnson, CEO

 

5
 

 

 

CONVERTIBLE PROMISSORY NOTE

DUE AUGUST 8, 2015

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note ("Common Stock") as set forth below, of NYXIO TECHNOLOGIES CORP., a Nevada corporation (the "Borrower") according to the conditions of the convertible note of the Borrower dated as of August 8, 2014, (the "Note"), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions (DWAC Transfer shall apply only if Borrower is DWAC eligible):

 

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

 

Name of DTC Prime Broker:

Account Number:

 

[ ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder's calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

Date of Conversion:

Applicable Conversion Price:

Number of Shares of Common Stock to be Issued:

Pursuant to Conversion of the Note:

Amount of Principle Balance Due remaining:

Under the Note after this conversion:

 

Leland Martin Capital Partners, LLC

By:

Name:

Title:

Date

 

 

6
 

 

 NYXIO TECHNOLOGIES CORP.

CONVERTIBLE PROMISSORY NOTE

DUE AUGUST 8, 2015

NOTE ASSIGNMENT FORM

FOR VALUE RECEIVED

 

The undersigned __________ (please print or typewrite name of assignor) hereby sells, assigns and transfers unto (please print or typewrite name, address and social security or taxpayer identification number, if any, of assignee) the within Convertible Promissory Note of NYXIO TECHNOLOGIES CORP.in the original principal amount of $15.000 and hereby authorizes the Company to transfer this Note on its books.

 

If the Holder is an individual: If the Holder is not an individual:
   
   
Name(s) of Holder Name of Holder
   
   
Signature of Holder By:
        Signature of Authorized Representative
   
   
Signature, if jointly held Name and Title of Authorized Representative
   
   
Date Date

 

 

(Signature(s) guaranteed)

 

7
 



THIS CONVERTIBLE PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT FOR DISTRIBUTION AND MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS LEGEND SHALL BE ENDORSED UPON ANY CONVERTIBLE PROMISSORY NOTE ISSUED IN EXCHANGE FOR THIS CONVERTIBLE PROMISSORY NOTE.

 

NYXIO TECHNOLOGIES CORP.

 

ISSUE DATE: AUGUST 27, 2014 $14,500.00

 

CONVERTIBLE PROMISSORY NOTE

 

Due: August 27, 2015

 

NYXIO TECHNOLOGIES CORP., a Nevada corporation (the "Company"), for value received, hereby promises to pay to LELAND MARTIN CAPITAL PARTNERS, LLC (the "Holder") on the 2ih day of August, 2015 (the "Maturity Date") at the offices of the Company, 1330 SW 3rd Ave, Portland, Oregon 97201 the principal sum of FOURTEEN THOUSAND FIVE HUNDRED DOLLARS ($14,500.00) in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay simple interest on said principal sum at the rate of 10% per annum from the date hereof through the Maturity Date. Any accrued and unpaid interest shall be paid on the Maturity Date.

 

1.                                        Registered Owner. The Issuer may consider and treat the person in whose name this Note shall be registered as the absolute owner thereof for all purposes whatsoever (whether or not this Note shall be overdue) and the Issuer shall not be affected by any notice to the contrary. Subject to the provisions hereof, the registered owner of this Note shall have the right to transfer it by assignment and the transferee thereof, upon his registration as owner of this Note, shall become vested with all the powers and rights of the transferor. Registration of any new owner shall take place upon presentation of this Note to the Issuer at its offices together with the Note Assignment Form attached hereto duly executed. In case of transfers by operation of law, the transferee shall notify the Issuer of such transfer and of his address, and shall submit appropriate evidence regarding the transfer so that this Note may be registered in the name of the transferee. This Note is transferable only on the books of the Issuer by the Holder on the surrender hereof, duly endorsed. Communications sent to any registered owner shall be effective as against all holders or transferees of this Note not registered at the time of sending the communication. In the event of the assignment by the Holder of a portion of the principal amount of this Note, the transferee thereof shall not have the right to exercise the Conversion Right (as hereinafter defined) unless the entire remaining principal portion of this Note is converted simultaneously therewith.

 

2.                                        Conversion.

 

2.1                 Conversion Right. The Holder shall have the right from time to time, and at any time during the period commencing on the Issue Date and ending the later of (i) the Maturity Date and (ii) the date of payment of the remaining outstanding principal amount, plus any accrued and unpaid interest of this Note, to convert the outstanding and unpaid principal amount of this Note (each a "Conversion") into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Issuer into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion "); provided , however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that p01iion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Issuer subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso; provided further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Issuer, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver) . The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion , in the form attached hereto as Exhibit A (the "Notice of Conversion "), delivered to the Issuer by the Holder in accordance with Section 1.4 below ; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Issuer before 6:00 p.m., New York, New York time on such conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of (l) the principal amount of this Note to be converted in such conversion plus (2) at the Issuer 's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date.

 

2.2                 Conversion Price. The Conversion Price (the "Conversion Price") shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Issuer relating to the Issuer's securities or the securities of any subsidiary of the Issuer, combinations , recapitalization , reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). "Market Price" means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Issuer via facsimile (the "Conversion Date"). "Trading Price" means, for any security as of any date, the prices of the security on the Over-the-Counter Bulletin Board (the "OTCBB") as reported by a reliable reporting service ("Reporting Service") mutually acceptable to Issuer and Holder, or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no price of such security is available in any of the foregoing manners, the average of the Trading prices of any market makers for such security that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Issuer and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. "Trading Day" shall mean any day on which the Common Stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

1
 

 

 

2.3                 Anti-Dilution Provisions.

 

2.3.1           Adjustments for Stock Dividends; Combinations, Etc. In the event that the Issuer, at any time or from time to time hereafter , shall (i) declare any dividend or other distribution on its Common Stock payable in Common Stock of the Issuer or in securities convertible into or exchangeable for Common Stock, including without limitation rights; (ii) effect a subdivision of its outstanding Common Stock into a greater number of shares of Common Stock by reclassification , stock split or otherwise than by payment of a dividend in shares of Common Stock; (iii) effect a combination or consolidation of its outstanding Common Stock into a lesser number of shares of Common Stock by reclassification, reverse split or otherwise; (iv) issue by reclassification , exchange or substitution of its Common Stock any shares of capital stock of the Issuer; or (v) effect any other transaction having similar effect, then the Holder may convert into the exchangeable securities . The purpose of the adjustment shall be that, in the event of a conversion at any time after the occurrence of any event described in (i) through (v) above, the Holder shall be entitled to receive the shares of Conversion Stock (or other securities) to which such Holder would have been finally entitled, after giving effect to the occurrence of such event, as if such Holder had converted this Note immediately prior to the occurrence of such event. An adjustment made pursuant to this Section 2.3 .1 shall become effective immediately after the record date in the case of a dividend or other distribution and shall become effective immediately upon the effective date in the case of a subdivision, combination, reclassification, exchange or substitution. The Corporation shall take no such action with respect to the Common Stock unless the Corporation shall simultaneously reserve out of the authorized, unissued and unreserved shares of common stock a sufficient number of shares of Common Stock to be available for full conversion of the Note at the new Conversion Price.

 

2.3.2           Adjustment for Consolidation or Merger. In case of any consolidation or merger to which the Issuer is a party, other than a merger or consolidation in which the Issuer is the surviving or continuing corporation and which does not result in any reclassification of, or change (other than a change in par value or from par value to no par value or from no par value to par value, or as a result of a subdivision or combination) in, outstanding Common Stock, then, as part of and as a condition to such transaction, provision shall be made so that, in the event of a conversion, the Holder of this Note, shall receive, in lieu of the securities and property receivable upon the conversion of this Note prior to consummation of the transaction, the kind and amount of shares or other securities and property receivable upon such consolidation or merger by a holder of the number of shares of Common Stock into which this Note would have been converted immediately prior to such consolidation or merger had the conversion occurred, all subject to further adjustment as provided in Section 2.3.1; in each such case, the terms of this Note shall be applicable to the securities or property receivable upon the conversion of this Note after such consummation. In any such case, appropriate adjustment shall be made in the application of this Section 2 with respect to the rights of the Holder of this Note after the transaction to the end that the provisions of this Section 2 shall be applicable after that event. The Corporation shall take no such action with respect to the Common Stock unless the Corporation shall simultaneously reserve out of the authorized, unissued and unreserved shares of such class or series into which the Common Stock has been changed a sufficient number of shares of such class or series into which the Common Stock has been changed to be available for full conversion of the Note at the new Conversion Price.

 

2.4                 Reservation of Shares. The Issuer will at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance and delivery upon conversion of this Note, free of preemptive or rights of purchase , the number of shares of Conversion Stock issuable upon conversion of this Note at the minimum Conversion Price. The Issuer covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable. The initial reserve of shares is 224,000,000, which may be increased automatically in the event the initial reserve is exhausted.

 

2.5                 Fractional Shares. The Issuer shall not be required to issue certificates representing fractions of shares, nor shall it be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the Issuer and the Holder that all fractional interests shall be eliminated and that all issuances of Common Stock be rounded up to the nearest whole share.

 

2.6                 Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Issuer, either at law or in equity, and the rights of the Holder are limited to those expressed in this Note.

 

2.7                 Certificate. When the Conversion Price is adjusted pursuant to the provisions hereof, the Issuer shall file with its official corporate records a certificate of its chief financial or accounting officer setting forth in detail the facts requiring such adjustment, the computation thereof and the adjusted Conversion Price, and shall mail a copy of the certificate to the Holder.

 

2.8                 DTC Status. The Company's Common Stock are currently eligible for DTC book-entry delivery, settlement and depository services and accordingly are not subject to a deposit transfer restriction ("Deposit Chill"). In the event, the Company's Common Stock becomes subject to a Deposit Chill, the Variable Conversion Rate shall be amended to 35% multiplied by the Market Price (as defined herein) (representing a discount rate of 65%).

 

2.9                 Short Sales. Other than the transaction contemplated hereunder, the Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, executed any disposition, including Short Sales, in the securities of the Company during the period commencing from the time that such Investor first received a term sheet (written or oral) from the Company. In addition, the Investor shall not engage in Short Sales of the Company's in the future. "Short Sales" shall include all "short sales" as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

2.10              Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 2.10, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the "Deadline") (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

2
 

 

2.11              Obligation of Borrower to Deliver Common Stock Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Note, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided , on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

 

2.12              Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Holder and its compliance with the provisions contained in this Note, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.

 

2.13              Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock through willful or deliberate acts on the part of the Borrower. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section 2.13 are justified.

 

3.                                        Redemption. The Borrower shall have no right of prepayment.

 

4.                                        Defaults. If any one or more of the following shall (Events of Default) shall occur:

 

4.1                 the Issuer shall (i) admit in writing its inability to pay its debts generally as they mature; (ii) make a general assignment for the benefit of creditors; (iii) fail or be unable to pay its debts as they mature iv) be adjudicated a bankrupt or insolvent; (v) file a voluntary petition in bankruptcy or a petition or an answer seeking an arrangement with creditors; (vi) take advantage of any bankruptcy, insolvency or readjustment of debt law or statute or file an answer admitting the material allegations of a petition filed against it in any proceeding under any such law; (vii) apply for or consent to the appointment of a receiver, trustee or liquidation for all or a substantial portion of its assets; (viii) have an involuntary case commenced against it under the Federal bankruptcy laws, which case is not dismissed or stayed within thirty (30) days; or (viii) fail to pay its taxes on a timely basis; ix) violate any covenant provided for in this Note, and such violation shall continue unremedied for a period of fifteen (15) days following the giving of written notice thereof from the Holder;

 

4.2                 any judgment is entered against the Issuer which is not bonded or discharged within 30 days;

 

4.3                 a levy of any sort is made on or against some or all of the assets of the Issuer.

 

4.4                 the sale, transfer, assignment or disposition of any of the Issuer's assets that are material to the business and/or operations of the Issuer's business. then, at any time thereafter and unless such Event of Default shall have been cured or shall have been waived in writing by the Holder (which waiver shall not be deemed a waiver of any subsequent default), at the option of the Holder and in the Holder's sole discretion, the Holder may, by written notice to the Issuer, declare the entire unpaid principal amount of this Note then outstanding, together with accrued interest thereon, to be forthwith due and payable, whereupon the same shall become forthwith due and payable.

 

4.5                 Upon an event of default the Debenture will become immediately due and payable in an amount in cash (the "Default Prepayment Amount") equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Debenture plus (x) accrued and unpaid interest on the unpaid principal amount of this Debenture to the Default Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) hereof.

 

5.                                        Investment Intent. The Holder, by its acceptance hereof, hereby represents and warrants that this Note is being acquired, and the Common Stock issuable upon the conversion of this Note will be acquired, for investment purposes only and without a view to the distribution thereof, and may be transferred only in compliance with the Act. Unless, prior to the conversion of this Note, the issuance of the Common Stock has been registered with the Securities and Exchange Commission pursuant to the Act, the Note Conversion Form shall be accompanied by a representation of the Holder to the Issuer to the effect that such securities are being acquired for investment and not with a view to the distribution thereof, and such other representations and documentation as may be reasonably required by the Issuer, unless in the opinion of counsel to the Issuer such representations or other documentation are not necessary to comply with the Act.

 

6.                                        Default Rate of Interest; Costs of Collection. In the event the Issuer shall default in the payment of this Note when due, then (i) effective with such date of default, the interest rate payable hereunder shall be increased to eighteen percent (18%) per annum and (ii) the Issuer agrees to pay, in addition to unpaid principal and interest, all the costs and expenses incurred in effecting collection hereunder or enforcing the terms of this Note, including reasonable attorneys' fees.

 

3
 

 

7.                                        Applicable Law. This Note is issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of New York.

 

8.                                        Notices. Any notice required or pern1itted to be given pursuant to this Note shall be deemed to have been duly given when delivered by hand or sent by certified or registered mail, return receipt requested and postage prepaid, overnight mail or telecopier as follows:

 

If to the Holder:

 

Leland Martin Capital Partners, LLC

219 East 69th St

New York, NY 10021

Attn:

 

 

If to the Company:

 

Nyxio Technologies Corp.

1330 SW 3rd Ave

Portland, Oregon 97201

Attention: Giorgio Johnson

 

or at such other address as the Holder or the Issuer shall designate by notice to the other given in accordance with this Section 8.

 

9.                                        Miscellaneous. This Note constitutes the rights and obligations of the Holder and the Issuer. No provision of this Note may be modified except by an instrument in writing signed by the party against whom the enforcement of any modification is sought.

 

The Issuer shall not take any action that would impair the rights and privileges of the Holder herein or avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Issuer, but will at all times act in good faith to assist in carrying out the provisions of this Note, including the Conversion rights provided in paragraph 2 herein and will take all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder of the Note .

 

The waiver by the Holder of a breach of any provision of this Note shall not operate or be construed as a waiver of any subsequent breach.

 

If any provision, or part thereof, of this Note shall be held to be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any way affect or render invalid or unenforceable any other provisions of this Note and this Note shall be carried out as if such invalid or unenforceable provision, or part thereof, had been reformed , and any court of competent jurisdiction is authorized to so reform such invalid or unenforceable provision , or part thereof, so that it would be valid, legal and enforceable to the fullest extent permitted by applicable law.

 

In no event shall the rate of interest payable hereunder exceed the maximum rate permitted by applicable law.

 

No provision of this Note shall alter or impair the absolute and unconditional obligation of the Issuer to pay the principal of, and interest on, this Note in accordance with the provisions hereof.

 

The Issuer agrees that irreparable damage would occur in the event that any of the provisions of this Note were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that , except with respect to the payment of the amounts due hereunder, the Holder of this Note shall be entitled to swift specific performance , injunctive relief or other equitable remedies to prevent or cure breaches of the provisions of this Note and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which the Holder may be entitled under this Note .

 

[SIGNATURE PAGE FOLLOWS]

 

4
 

 

 

IN WITNESS WHEREOF , the Company has caused this Note to be signed on its behalf, in its corporate name, by its duly authorized officer, all as of the day and year first above written.

 

NYXIO TECHNOLOGIESCORP.

 

 

By: /s/ Giorgio Johnson

Giorgio Johnson, CEO

 

5
 

 

CONVERTIBLE PROMISSORY NOTE DUE

 

AUGUST 27, 2015

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_____ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note ("Common Stock") as set forth below, of NYXIO TECHNOLOGIES CORP., a Nevada corporation (the "Borrower") according to the conditions of the convertible note of the Borrower dated as of August 27, 2014, (the "Note"), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions (DWAC Transfer shall apply only if Borrower is DWAC eligible):

 

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

 

Name of DTC Prime Broker: Account Number:

 

[ ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder's calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto :

 

Date of Conversion:

Applicable Conversion Price:

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Note:

Amount of Principal Balance Due remaining

Under the Note after this conversion:

 

Leland Martin Capital Partners, LLC

By:

Name:

Title:

Date:

 

6
 

 

NYXIO TECHNOLOGIES CORP.

 

CONVERTIBLE PROMISSORY NOTE DUE

 

AUGUST 27, 2015

 

NOTE ASSIGNMENT FORM

 

FOR VALUE RECEIVED

 

The undersigned _________________ (please print or typewrite name of assignor) hereby sells, assigns and transfers unto (please print or typewrite name, address and social security or taxpayer identification number, if any, of assignee) the within Convertible Promissory Note of NYXIO TECHNOLOGIES CORP. in the original principal amount of $14,500.00 and hereby authorizes the Company to transfer this Note on its books.

 

If  the Holder is an individual: If      the Holder is not an individual:
   
   
Name(s) of Holder Name of Holder
   
   
Signature of Holder By:
        Signature of Authorized Representative
   
   
Signature, if jointly held Name and Title of Authorized Representative
   
   
Date Date

 

 

7
 



THIS CONVERTIBLE PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT FOR DISTRIBUTION AND MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF l933, AS AMENDED (THE "ACT"). THIS LEGEND SHALL BE ENDORSED UPON ANY CONVERTIBLE PROMISSORY NOTE ISSUED IN EXCHANGE FOR THIS CONVERTIBLE PROMISSORY NOTE.

 

NYXIO TECHNOLOGIES CORP.

 

ISSUE DATE: SEPTEMBER 08, 2014 $5,000

CONVERTIBLE PROMISSORY NOTE

 

Due: September 08, 2015

 

NYXIO TECHNOLOGIES CORP., a Nevada corporation (the "Company"), for value received, hereby promises to pay to LELAND MARTIN CAPITAL PARTNERS, LLC (the "Holder") on the 8th day of September, 2015 (the "Maturity Date") at the offices of the Company, 1330 SW 3rd Ave, Portland, Oregon 97201 the principal sum of FIVE THOUSAND DOLLARS ($5,000.00) in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay simple interest on said principal sum at the rate of 10% per annum from the date hereof through the Maturity Date. Any accrued and unpaid interest shall be paid on the Maturity Date.

 

1. Registered Owner. The Issuer may consider and treat the person in whose name this Note shall be registered as the absolute owner thereof for all purposes whatsoever (whether or not this Note shall be overdue) and the Issuer shall not be affected by any notice to the contrary. Subject to the provisions hereof, the registered owner of this Note shall have the right to transfer it by assignment and the transferee thereof, upon his registration as owner of this Note, shall become vested with all the powers and rights of the transferor. Registration of any new owner shall take place upon presentation of this Note to the Issuer at its offices together with the Note Assignment Form attached hereto duly executed. In case of transfers by operation of law, the transferee shall notify the Issuer of such transfer and of his address, and shall submit appropriate evidence regarding the transfer so that this Note may be registered in the name of the transferee. This Note is transferable only on the books of the Issuer by the Holder on the surrender hereof, duly endorsed. Communications sent to any registered owner shall be effective as against all holders or transferees of this Note not registered at the time of sending the communication. In the event of the assignment by the Holder of a portion of the principal amount of this Note, the transferee thereof shall not have the right to exercise the Conversion Right (as hereinafter defined) unless the entire remaining principal portion of this Note is converted simultaneously therewith.

 

2. Conversion.

  

2.1 Conversion Right. The Holder shall have the right from time to time, and at any time during the period commencing on the Issue Date and ending the later of (i) the Maturity Date and (ii) the date of payment of the remaining outstanding principal amount, plus any accrued and unpaid interest of this Note, to convert the outstanding and unpaid principal amount of this Note (each a “Conversion”) into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Issuer into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Issuer subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso; provided further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Issuer, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Issuer by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Issuer before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Issuer’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date.

2.2 Conversion Price. The Conversion Price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Issuer relating to the Issuer’s securities or the securities of any subsidiary of the Issuer, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Issuer via facsimile (the “Conversion Date”). “Trading Price” means, for any security as of any date, the prices of the security on the Over-the-Counter Bulletin Board (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Issuer and Holder, or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no price of such security is available in any of the foregoing manners, the average of the Trading prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Issuer and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

 
 

2.3 Anti-Dilution Provisions.

2.3.1 Adjustments for Stock Dividends; Combinations, Etc. In the event that the Issuer, at any time or from time to time hereafter, shall (i) declare any dividend or other distribution on its Common Stock payable in Common Stock of the Issuer or in securities convertible into or exchangeable for Common Stock, including without limitation rights; (ii) effect a subdivision of its outstanding Common Stock into a greater number of shares of Common Stock by reclassification, stock split or otherwise than by payment of a dividend in shares of Common Stock; (iii) effect a combination or consolidation of its outstanding Common Stock into a lesser number of shares of Common Stock by reclassification, reverse split or otherwise; (iv) issue by reclassification, exchange or substitution of its Common Stock any shares of capital stock of the Issuer; or (v) effect any other transaction having similar effect, then the Holder may convert into the exchangeable securities. The purpose of the adjustment shall be that, in the event of a conversion at any time after the occurrence of any event described in (i) through (v) above, the Holder shall be entitled to receive the shares of Conversion Stock (or other securities) to which such Holder would have been finally entitled, after giving effect to the occurrence of such event, as if such Holder had converted this Note immediately prior to the occurrence of such event. An adjustment made pursuant to this Section 2.3.1 shall become effective immediately after the record date in the case of a dividend or other distribution and shall become effective immediately upon the effective date in the case of a subdivision, combination, reclassification, exchange or substitution. The Corporation shall take no such action with respect to the Common Stock unless the Corporation shall simultaneously reserve out of the authorized, unissued and unreserved shares of common stock a sufficient number of shares of Common Stock to be available for full conversion of the Note at the new Conversion Price.

 

2.3.2 Adjustment for Consolidation or Merger. In case of any consolidation or merger to which the Issuer is a party, other than a merger or consolidation in which the Issuer is the surviving or continuing corporation and which does not result in any reclassification of, or change (other than a change in par value or from par value to no par value or from no par value to par value, or as a result of a subdivision or combination) in, outstanding Common Stock, then, as part of and as a condition to such transaction, provision shall be made so that, in the event of a conversion, the Holder of this Note, shall receive, in lieu of the securities and property receivable upon the conversion of this Note prior to consummation of the transaction, the kind and amount of shares or other securities and property receivable upon such consolidation or merger by a holder of the number of shares of Common Stock into which this Note would have been converted immediately prior to such consolidation or merger had the conversion occurred, all subject to further adjustment as provided in Section 2.3.1; in each such case, the terms of this Note shall be applicable to the securities or property receivable upon the conversion of this Note after such consummation. In any such case, appropriate adjustment shall be made in the application of this Section 2 with respect to the rights of the Holder of this Note after the transaction to the end that the provisions of this Section 2 shall be applicable after that event. The Corporation shall take no such action with respect to the Common Stock unless the Corporation shall simultaneously reserve out of the authorized, unissued and unreserved shares of such class or series into which the Common Stock has been changed a sufficient number of shares of such class or series into which the Common Stock has been changed to be available for full conversion of the Note at the new Conversion Price.

 

2.4 Reservation of Shares. The Issuer will at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance and delivery upon conversion of this Note, free of preemptive or rights of purchase, the number of shares of Conversion Stock issuable upon conversion of this Note at the minimum Conversion Price. The Issuer covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable. The initial reserve of shares is 150,000,000, which may be increased automatically in the event the initial reserve is exhausted.

 

2.5 Fractional Shares. The Issuer shall not be required to issue certificates representing fractions of shares, nor shall it be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the Issuer and the Holder that all fractional interests shall be eliminated and that all issuances of Common Stock be rounded up to the nearest whole share.

 

2.6 Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Issuer, either at law or in equity, and the rights of the Holder are limited to those expressed in this Note.

 

2.7 Certificate. When the Conversion Price is adjusted pursuant to the provisions hereof, the Issuer shall file with its official corporate records a certificate of its chief financial or accounting officer setting forth in detail the facts requiring such adjustment, the computation thereof and the adjusted Conversion Price, and shall mail a copy of the certificate to the Holder.

 

2.8 DTC Status. The Company’s Common Stock are currently eligible for DTC book-entry delivery, settlement and depository services and accordingly are not subject to a deposit transfer restriction (“Deposit Chill”). In the event, the Company’s Common Stock becomes subject to a Deposit Chill, the Variable Conversion Rate shall be amended to 35% multiplied by the Market Price (as defined herein) (representing a discount rate of 65%)

2.9 Short Sales. Other than the transaction contemplated hereunder, the Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, executed any disposition, including Short Sales, in the securities of the Company during the period commencing from the time that such Investor first received a term sheet (written or oral) from the Company. In addition, the Investor shall not engage in Short Sales of the Company’s in the future. “Short Sales” shall include all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

2.10 Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 2.10, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

2
 

  

2.11 Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Note, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date

 

2.12 Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in this Note, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.

 

2.13 Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock through willful or deliberate acts on the part of the Borrower. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section 2.13 are justified.

 

3. Redemption. The Borrower shall have no right of prepayment.

 

4. Defaults. If any one or more of the following shall (Events of Default) shall occur:

 

(a) the Issuer shall (i) admit in writing its inability to pay its debts generally as they mature; (ii) make a general assignment for the benefit of creditors; (iii) fail or be unable to pay its debts as they mature iv) be adjudicated a bankrupt or insolvent; (v) file a voluntary petition in bankruptcy or a petition or an answer seeking an arrangement with creditors; (vi) take advantage of any bankruptcy, insolvency or readjustment of debt law or statute or file an answer admitting the material allegations of a petition filed against it in any proceeding under any such law; (vii) apply for or consent to the appointment of a receiver, trustee or liquidation for all or a substantial portion of its assets; (viii) have an involuntary case commenced against it under the Federal bankruptcy laws, which case is not dismissed or stayed within thirty (30) days; or (viii) fail to pay its taxes on a timely basis; ix) violate any covenant provided for in this Note, and such violation shall continue unremedied for a period of fifteen (15) days following the giving of written notice thereof from the Holder;

 

(b) any judgment is entered against the Issuer which is not bonded or discharged within 30 days;

 

(c) a levy of any sort is made on or against some or all of the assets of the Issuer.

 

(d) the sale, transfer, assignment or disposition of any of the Issuer’s assets that are material to the business and/or operations of the Issuer’s business.

 

then, at any time thereafter and unless such Event of Default shall have been cured or shall have been waived in writing by the Holder (which waiver shall not be deemed a waiver of any subsequent default), at the option of the Holder and in the Holder’s sole discretion, the Holder may, by written notice to the Issuer, declare the entire unpaid principal amount of this Note then outstanding, together with accrued interest thereon, to be forthwith due and payable, whereupon the same shall become forthwith due and payable.

 

3
 

 

(e) Upon an event of default the Debenture will become immediately due and payable in an amount in cash (the “Default Prepayment Amount”) equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Debenture plus (x) accrued and unpaid interest on the unpaid principal amount of this Debenture to the Default Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) hereof.

 

5. Investment Intent. The Holder, by its acceptance hereof, hereby represents and warrants that this Note is being acquired, and the Common Stock issuable upon the conversion of this Note will be acquired, for investment purposes only and without a view to the distribution thereof, and may be transferred only in compliance with the Act. Unless, prior to the conversion of this Note, the issuance of the Common Stock has been registered with the Securities and Exchange Commission pursuant to the Act, the Note Conversion Form shall be accompanied by a representation of the Holder to the Issuer to the effect that such securities are being acquired for investment and not with a view to the distribution thereof, and such other representations and documentation as may be reasonably required by the Issuer, unless in the opinion of counsel to the Issuer such representations or other documentation are not necessary to comply with the Act.

 

6. Default Rate of Interest; Costs of Collection. In the event the Issuer shall default in the payment of this Note when due, then (i) effective with such date of default, the interest rate payable hereunder shall be increased to eighteen percent (18%) per annum and (ii) the Issuer agrees to pay, in addition to unpaid principal and interest, all the costs and expenses incurred in effecting collection hereunder or enforcing the terms of this Note, including reasonable attorneys’ fees.

 

7. Applicable Law. This Note is issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of New York.

 

 

8. Notices. Any notice required or permitted to be given pursuant to this Note shall be deemed to have been duly given when delivered by hand or sent by certified or registered mail, return receipt requested and postage prepaid, overnight mail or telecopier as follows:

 

If to the Holder:

 

Leland Martin Capital Partners, LLC

219 East 69th St

New York, NY 10021

Attn:

 

If to the Company:

 

Nyxio Technologies Corp.

1330 SW 3rd Ave

Portland, Oregon 97201
Attention: Giorgio Johnson

 

or at such other address as the Holder or the Issuer shall designate by notice to the other given in accordance with this Section 8.

 

9. Miscellaneous. This Note constitutes the rights and obligations of the Holder and the Issuer. No provision of this Note may be modified except by an instrument in writing signed by the party against whom the enforcement of any modification is sought.

 

The Issuer shall not take any action that would impair the rights and privileges of the Holder herein or avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Issuer, but will at all times act in good faith to assist in carrying out the provisions of this Note, including the Conversion rights provided in paragraph 2 herein and will take all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder of the Note.

 

The waiver by the Holder of a breach of any provision of this Note shall not operate or be construed as a waiver of any subsequent breach.

 

4
 

 

If any provision, or part thereof, of this Note shall be held to be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any way affect or render invalid or unenforceable any other provisions of this Note and this Note shall be carried out as if such invalid or unenforceable provision, or part thereof, had been reformed, and any court of competent jurisdiction is authorized to so reform such invalid or unenforceable provision, or part thereof, so that it would be valid, legal and enforceable to the fullest extent permitted by applicable law.

 

In no event shall the rate of interest payable hereunder exceed the maximum rate permitted by applicable law.

 

No provision of this Note shall alter or impair the absolute and unconditional obligation of the Issuer to pay the principal of, and interest on, this Note in accordance with the provisions hereof.

 

The Issuer agrees that irreparable damage would occur in the event that any of the provisions of this Note were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, except with respect to the payment of the amounts due hereunder, the Holder of this Note shall be entitled to swift specific performance, injunctive relief or other equitable remedies to prevent or cure breaches of the provisions of this Note and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which the Holder may be entitled under this Note.

 

 

[SIGNATURE PAGE FOLLOWS]

 

5
 

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed on its behalf, in its corporate name, by its duly authorized officer, all as of the day and year first above written.

 

 

NYXIO TECHNOLOGIES CORP.

 

By: /s/ Giorgio Johnson

Giorgio Johnson, CEO

 

6
 

 

CONVERTIBLE PROMISSORY NOTE

 

DUE SEPTEMBER 08, 2015

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of NYXIO TECHNOLOGIES CORP., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of September 08, 2014, (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions (DWAC Transfer shall apply only if Borrower is DWAC eligible):

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

Name of DTC Prime Broker:

Account Number:

[ ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

 

Date of Conversion: _____________

Applicable Conversion Price: $____________

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Note: ______________

Amount of Principal Balance Due remaining

Under the Note after this conversion: ______________

Leland Martin Capital Partners, LLC

By:_____________________________

Name:

Title:

Date: ______________

 

7
 

 

NYXIO TECHNOLOGIES CORP.

 

CONVERTIBLE PROMISSORY NOTE

 

DUE SEPTEMBER 08, 2015

 

NOTE ASSIGNMENT FORM

 

FOR VALUE RECEIVED

 

The undersigned (please print or typewrite name of assignor) hereby sells, assigns and transfers unto (please print or typewrite name, address and social security or taxpayer identification number, if any, of assignee) the within Convertible Promissory Note of NYXIO TECHNOLOGIES CORP.in the original principal amount of $5,000 and hereby authorizes the Company to transfer this Note on its books.

 

 

If  the Holder is an individual: If       the Holder is not an individual:
   
   
Name(s) of Holder Name of Holder
   
   
Signature of Holder By:
        Signature of Authorized Representative
   
   
Signature, if jointly held Name and Title of Authorized Representative
   
   
Date Date

 

8
 

 

 



THIS CONVERTIBLE PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT FOR DISTRIBUTION AND MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF l933, AS AMENDED (THE "ACT"). THIS LEGEND SHALL BE ENDORSED UPON ANY CONVERTIBLE PROMISSORY NOTE ISSUED IN EXCHANGE FOR THIS CONVERTIBLE PROMISSORY NOTE.

 

NYXIO TECHNOLOGIES CORP.

ISSUE DATE: SEPTEMBER 18, 2014 $5,000

CONVERTIBLE PROMISSORY NOTE

 

Due: September 18, 2015

 

NYXIO TECHNOLOGIES CORP., a Nevada corporation (the "Company"), for value received, hereby promises to pay to LELAND MARTIN CAPITAL PARTNERS, LLC (the "Holder") on the 18th day of September, 2015 (the "Maturity Date") at the offices of the Company, 1330 SW 3rd Ave, Portland, Oregon 97201 the principal sum of FIVE THOUSAND DOLLARS ($5,000.00) in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay simple interest on said principal sum at the rate of 10% per annum from the date hereof through the Maturity Date. Any accrued and unpaid interest shall be paid on the Maturity Date.

 

1. Registered Owner. The Issuer may consider and treat the person in whose name this Note shall be registered as the absolute owner thereof for all purposes whatsoever (whether or not this Note shall be overdue) and the Issuer shall not be affected by any notice to the contrary. Subject to the provisions hereof, the registered owner of this Note shall have the right to transfer it by assignment and the transferee thereof, upon his registration as owner of this Note, shall become vested with all the powers and rights of the transferor. Registration of any new owner shall take place upon presentation of this Note to the Issuer at its offices together with the Note Assignment Form attached hereto duly executed. In case of transfers by operation of law, the transferee shall notify the Issuer of such transfer and of his address, and shall submit appropriate evidence regarding the transfer so that this Note may be registered in the name of the transferee. This Note is transferable only on the books of the Issuer by the Holder on the surrender hereof, duly endorsed. Communications sent to any registered owner shall be effective as against all holders or transferees of this Note not registered at the time of sending the communication. In the event of the assignment by the Holder of a portion of the principal amount of this Note, the transferee thereof shall not have the right to exercise the Conversion Right (as hereinafter defined) unless the entire remaining principal portion of this Note is converted simultaneously therewith.

 

2. Conversion.

  

2.1 Conversion Right. The Holder shall have the right from time to time, and at any time during the period commencing on the Issue Date and ending the later of (i) the Maturity Date and (ii) the date of payment of the remaining outstanding principal amount, plus any accrued and unpaid interest of this Note, to convert the outstanding and unpaid principal amount of this Note (each a “Conversion”) into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Issuer into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Issuer subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso; provided further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Issuer, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Issuer by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Issuer before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Issuer’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date.

2.2 Conversion Price. The Conversion Price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Issuer relating to the Issuer’s securities or the securities of any subsidiary of the Issuer, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent by the Holder to the Issuer via facsimile (the “Conversion Date”). “Trading Price” means, for any security as of any date, the prices of the security on the Over-the-Counter Bulletin Board (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Issuer and Holder, or, if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no price of such security is available in any of the foregoing manners, the average of the Trading prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Issuer and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is traded for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. 

 
 

2.3 Anti-Dilution Provisions.

2.3.1 Adjustments for Stock Dividends; Combinations, Etc. In the event that the Issuer, at any time or from time to time hereafter, shall (i) declare any dividend or other distribution on its Common Stock payable in Common Stock of the Issuer or in securities convertible into or exchangeable for Common Stock, including without limitation rights; (ii) effect a subdivision of its outstanding Common Stock into a greater number of shares of Common Stock by reclassification, stock split or otherwise than by payment of a dividend in shares of Common Stock; (iii) effect a combination or consolidation of its outstanding Common Stock into a lesser number of shares of Common Stock by reclassification, reverse split or otherwise; (iv) issue by reclassification, exchange or substitution of its Common Stock any shares of capital stock of the Issuer; or (v) effect any other transaction having similar effect, then the Holder may convert into the exchangeable securities. The purpose of the adjustment shall be that, in the event of a conversion at any time after the occurrence of any event described in (i) through (v) above, the Holder shall be entitled to receive the shares of Conversion Stock (or other securities) to which such Holder would have been finally entitled, after giving effect to the occurrence of such event, as if such Holder had converted this Note immediately prior to the occurrence of such event. An adjustment made pursuant to this Section 2.3.1 shall become effective immediately after the record date in the case of a dividend or other distribution and shall become effective immediately upon the effective date in the case of a subdivision, combination, reclassification, exchange or substitution. The Corporation shall take no such action with respect to the Common Stock unless the Corporation shall simultaneously reserve out of the authorized, unissued and unreserved shares of common stock a sufficient number of shares of Common Stock to be available for full conversion of the Note at the new Conversion Price.

 

2.3.2 Adjustment for Consolidation or Merger. In case of any consolidation or merger to which the Issuer is a party, other than a merger or consolidation in which the Issuer is the surviving or continuing corporation and which does not result in any reclassification of, or change (other than a change in par value or from par value to no par value or from no par value to par value, or as a result of a subdivision or combination) in, outstanding Common Stock, then, as part of and as a condition to such transaction, provision shall be made so that, in the event of a conversion, the Holder of this Note, shall receive, in lieu of the securities and property receivable upon the conversion of this Note prior to consummation of the transaction, the kind and amount of shares or other securities and property receivable upon such consolidation or merger by a holder of the number of shares of Common Stock into which this Note would have been converted immediately prior to such consolidation or merger had the conversion occurred, all subject to further adjustment as provided in Section 2.3.1; in each such case, the terms of this Note shall be applicable to the securities or property receivable upon the conversion of this Note after such consummation. In any such case, appropriate adjustment shall be made in the application of this Section 2 with respect to the rights of the Holder of this Note after the transaction to the end that the provisions of this Section 2 shall be applicable after that event. The Corporation shall take no such action with respect to the Common Stock unless the Corporation shall simultaneously reserve out of the authorized, unissued and unreserved shares of such class or series into which the Common Stock has been changed a sufficient number of shares of such class or series into which the Common Stock has been changed to be available for full conversion of the Note at the new Conversion Price.

 

2.4 Reservation of Shares. The Issuer will at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance and delivery upon conversion of this Note, free of preemptive or rights of purchase, the number of shares of Conversion Stock issuable upon conversion of this Note at the minimum Conversion Price. The Issuer covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable. The initial reserve of shares is 150,000,000, which may be increased automatically in the event the initial reserve is exhausted.

 

 

2.5 Fractional Shares. The Issuer shall not be required to issue certificates representing fractions of shares, nor shall it be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the Issuer and the Holder that all fractional interests shall be eliminated and that all issuances of Common Stock be rounded up to the nearest whole share.

 

2.6 Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Issuer, either at law or in equity, and the rights of the Holder are limited to those expressed in this Note.

 

2.7 Certificate. When the Conversion Price is adjusted pursuant to the provisions hereof, the Issuer shall file with its official corporate records a certificate of its chief financial or accounting officer setting forth in detail the facts requiring such adjustment, the computation thereof and the adjusted Conversion Price, and shall mail a copy of the certificate to the Holder.

 

2.8 DTC Status. The Company’s Common Stock are currently eligible for DTC book-entry delivery, settlement and depository services and accordingly are not subject to a deposit transfer restriction (“Deposit Chill”). In the event, the Company’s Common Stock becomes subject to a Deposit Chill, the Variable Conversion Rate shall be amended to 35% multiplied by the Market Price (as defined herein) (representing a discount rate of 65%).

2.9 Short Sales. Other than the transaction contemplated hereunder, the Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, executed any disposition, including Short Sales, in the securities of the Company during the period commencing from the time that such Investor first received a term sheet (written or oral) from the Company. In addition, the Investor shall not engage in Short Sales of the Company’s in the future. “Short Sales” shall include all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

2.10 Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 2.10, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

2
 

  

2.11 Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Note, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

 

2.12 Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in this Note, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.

 

2.13 Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock through willful or deliberate acts on the part of the Borrower. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section 2.13 are justified.

 

3. Redemption. The Borrower shall have no right of prepayment.

 

4. Defaults. If any one or more of the following shall (Events of Default) shall occur:

 

(a) the Issuer shall (i) admit in writing its inability to pay its debts generally as they mature; (ii) make a general assignment for the benefit of creditors; (iii) fail or be unable to pay its debts as they mature iv) be adjudicated a bankrupt or insolvent; (v) file a voluntary petition in bankruptcy or a petition or an answer seeking an arrangement with creditors; (vi) take advantage of any bankruptcy, insolvency or readjustment of debt law or statute or file an answer admitting the material allegations of a petition filed against it in any proceeding under any such law; (vii) apply for or consent to the appointment of a receiver, trustee or liquidation for all or a substantial portion of its assets; (viii) have an involuntary case commenced against it under the Federal bankruptcy laws, which case is not dismissed or stayed within thirty (30) days; or (viii) fail to pay its taxes on a timely basis; ix) violate any covenant provided for in this Note, and such violation shall continue unremedied for a period of fifteen (15) days following the giving of written notice thereof from the Holder;

 

(b) any judgment is entered against the Issuer which is not bonded or discharged within 30 days;

 

(c) a levy of any sort is made on or against some or all of the assets of the Issuer.

 

(d) the sale, transfer, assignment or disposition of any of the Issuer’s assets that are material to the business and/or operations of the Issuer’s business.

 

then, at any time thereafter and unless such Event of Default shall have been cured or shall have been waived in writing by the Holder (which waiver shall not be deemed a waiver of any subsequent default), at the option of the Holder and in the Holder’s sole discretion, the Holder may, by written notice to the Issuer, declare the entire unpaid principal amount of this Note then outstanding, together with accrued interest thereon, to be forthwith due and payable, whereupon the same shall become forthwith due and payable.

 

(e) Upon an event of default the Debenture will become immediately due and payable in an amount in cash (the “Default Prepayment Amount”) equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Debenture plus (x) accrued and unpaid interest on the unpaid principal amount of this Debenture to the Default Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) hereof.

 

3
 

 

5. Investment Intent. The Holder, by its acceptance hereof, hereby represents and warrants that this Note is being acquired, and the Common Stock issuable upon the conversion of this Note will be acquired, for investment purposes only and without a view to the distribution thereof, and may be transferred only in compliance with the Act. Unless, prior to the conversion of this Note, the issuance of the Common Stock has been registered with the Securities and Exchange Commission pursuant to the Act, the Note Conversion Form shall be accompanied by a representation of the Holder to the Issuer to the effect that such securities are being acquired for investment and not with a view to the distribution thereof, and such other representations and documentation as may be reasonably required by the Issuer, unless in the opinion of counsel to the Issuer such representations or other documentation are not necessary to comply with the Act.

 

6. Default Rate of Interest; Costs of Collection. In the event the Issuer shall default in the payment of this Note when due, then (i) effective with such date of default, the interest rate payable hereunder shall be increased to eighteen percent (18%) per annum and (ii) the Issuer agrees to pay, in addition to unpaid principal and interest, all the costs and expenses incurred in effecting collection hereunder or enforcing the terms of this Note, including reasonable attorneys’ fees.

 

7. Applicable Law. This Note is issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of New York.

 

 

8. Notices. Any notice required or permitted to be given pursuant to this Note shall be deemed to have been duly given when delivered by hand or sent by certified or registered mail, return receipt requested and postage prepaid, overnight mail or telecopier as follows:

 

If to the Holder:

 

Leland Martin Capital Partners, LLC

219 East 69th St

New York, NY 10021

Attn:

 

If to the Company:

 

Nyxio Technologies Corp.

1330 SW 3rd Ave

Portland, Oregon 97201

Attention: Giorgio Johnson

 

or at such other address as the Holder or the Issuer shall designate by notice to the other given in accordance with this Section 8.

 

9. Miscellaneous. This Note constitutes the rights and obligations of the Holder and the Issuer. No provision of this Note may be modified except by an instrument in writing signed by the party against whom the enforcement of any modification is sought.

 

The Issuer shall not take any action that would impair the rights and privileges of the Holder herein or avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Issuer, but will at all times act in good faith to assist in carrying out the provisions of this Note, including the Conversion rights provided in paragraph 2 herein and will take all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder of the Note.

 

The waiver by the Holder of a breach of any provision of this Note shall not operate or be construed as a waiver of any subsequent breach.

 

If any provision, or part thereof, of this Note shall be held to be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any way affect or render invalid or unenforceable any other provisions of this Note and this Note shall be carried out as if such invalid or unenforceable provision, or part thereof, had been reformed, and any court of competent jurisdiction is authorized to so reform such invalid or unenforceable provision, or part thereof, so that it would be valid, legal and enforceable to the fullest extent permitted by applicable law.

 

In no event shall the rate of interest payable hereunder exceed the maximum rate permitted by applicable law.

 

No provision of this Note shall alter or impair the absolute and unconditional obligation of the Issuer to pay the principal of, and interest on, this Note in accordance with the provisions hereof.

 

The Issuer agrees that irreparable damage would occur in the event that any of the provisions of this Note were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, except with respect to the payment of the amounts due hereunder, the Holder of this Note shall be entitled to swift specific performance, injunctive relief or other equitable remedies to prevent or cure breaches of the provisions of this Note and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which the Holder may be entitled under this Note.

 

 

[SIGNATURE PAGE FOLLOWS]

 

4
 

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed on its behalf, in its corporate name, by its duly authorized officer, all as of the day and year first above written.

 

 

NYXIO TECHNOLOGIES CORP.

 

By: /s/ Giorgio Johnson

Giorgio Johnson, CEO

 

5
 

 

CONVERTIBLE PROMISSORY NOTE

 

DUE SEPTEMBER 18, 2015

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of NYXIO TECHNOLOGIES CORP., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of September 18, 2014, (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions (DWAC Transfer shall apply only if Borrower is DWAC eligible):

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

Name of DTC Prime Broker:

Account Number:

[ ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

___________________________

___________________________

___________________________

___________________________

 

Date of Conversion: _____________

Applicable Conversion Price: $____________

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Note: ______________

Amount of Principal Balance Due remaining

Under the Note after this conversion: ______________

Leland Martin Capital Partners, LLC

By:_____________________________

Name:

Title:

Date: ______________

 

6
 

 

NYXIO TECHNOLOGIES CORP.

 

CONVERTIBLE PROMISSORY NOTE

 

DUE SEPTEMBER 18, 2015

 

NOTE ASSIGNMENT FORM

 

FOR VALUE RECEIVED

 

The undersigned (please print or typewrite name of assignor) hereby sells, assigns and transfers unto (please print or typewrite name, address and social security or taxpayer identification number, if any, of assignee) the within Convertible Promissory Note of NYXIO TECHNOLOGIES CORP.in the original principal amount of $5,000 and hereby authorizes the Company to transfer this Note on its books.

 

If the Holder is an individual:

 

_________________________________

Signature of Holder

 

 

Signature of Authorized Representative

 

_________________________________

 

__________________________________

 

Signature, if jointly held Name and Title of Authorized Representative

 

_________________________________

Date

 

7
 

 



ORIGINAL ISSUE DISCOUNT CONVERTIBLE PROMISSORY NOTE

 

Face Amount: $37,500.00 September 4, 2014
Purchase Price: $25,000.00  

 

 

FOR VALUE RECEIVED, NYXIO TECHNOLOGIES CORP., a Nevada corporation (the "Maker or Company") with its principal offices located at 1330 S.W. 3RD AVE. PORTLAND, OREGON 97201 promises to pay to the order of BEAUFORT CAPITAL PARTNERS LLC, or its registered assigns (the "Payee"), upon the terms set forth below, the principal amount of Twenty-Five Thousand Dollars ($25,000.00) (this "Note").

 

1.                   Payments.

 

(a)                 The purchase price ($25,000.00) of this Note shall be due on March 4, 2015 or such later date as is agreed to in writing by the Payee (the "Maturity Date"), unless due earlier in accordance with the terms of this Note (see Section c below).

 

(b)                 All overdue unpaid principal to be paid hereunder shall entail a late fee at the rate of 12% per annum (or such lower maximum amount of interest permitted to be charged under applicable law) which will accrue daily, from the date such principal is due hereunder through and including the date of payment.

 

(c)                 Absent the occurrence of an Event of Default (unless such Event of Default is waived in writing by the Payee), the Maker may prepay this Note for a net payment of $37,500.00 at any time prior to December 4, 2014. If the $37,500.00 is not pre-paid by December 4, 2014, payee has the right to refuse any further payments and choose to convert this note when it has matures 180 days after payment of this $25,000.00.

 

2.                   Payment Schedule. $25,000.00 to the Company upon written proof that the transfer agent and corporate attorney have been paid and up to date and the execution by the Company of the warrant agreement, attached hereto as Exhibit A. Beaufort will make payments to these entities and deduct from the $25,000.00 to the Company if these entities are owed monies over $500 as of March 4, 2015.

 

3.                   Events of Default.

 

(a)                 "Event of Default'', wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

(i)[Intentionally omitted];

 

(iii)                Maker or any of its subsidiaries shall fail to observe or perform any of their respective obligations owed to Payee under this Note or any other covenant, agreement, representation or warranty contained in, or otherwise commit any breach hereunder or in any other agreement executed in connection herewith and such failure or breach shall not have been remedied within ten days after the date on which notice of such failure or breach shall have been delivered

 

(iv)               Maker or any of its subsidiaries shall commence, or there shall be commenced against Maker or any subsidiary, a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or Maker or any subsidiary commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to Maker or any subsidiary, or there is commenced against Maker or any subsidiary any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 60 days; or Maker or any subsidiary is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or Maker or any subsidiary suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days; or Maker or any subsidiary makes a general assignment for the benefit of creditors; or Maker or any subsidiary shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or Maker or any subsidiary shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing: or any corporate or other action is taken by Maker or any subsidiary for the purpose of effecting any of the foregoing;

 

(v)                 Maker or any subsidiary shall default in any of its respective obligations under any other note or any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of Maker or any subsidiary, whether such indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; or

 

1
 

 

(vi)               Maker shall (a) be a party to any Change of Control Transaction (as defined below), (b) agree to sell or dispose all or in excess of 33% of its assets in one or more transactions (whether or not such sale would constitute a Change of Control Transaction), (c) redeem or repurchase more than a de minimis number of shares of Common Stock or other equity securities of Maker or (d) make any distribution or declare or pay any dividends (in cash or other property, other than common stock) on, or purchase, acquire, redeem, or retire any of Maker's capital stock, of any class, whether now or hereafter outstanding. "Change of Control Transaction" means the occurrence of any of: (i) an acquisition after the date hereof by an individual or legal entity or "group" (as described in Rule 13d-5(b)(l) promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of Maker, by contract or otherwise) of in excess of 33% of the voting securities of Maker, (ii) a replacement at one time or over time of more than one-half of the members of Maker's board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (iii) the merger of Maker with or into another entity that is not wholly-owned by Maker, consolidation or sale of 33% or more of the assets of Maker in one or a series of related transactions, or (iv) the execution by Maker of an agreement to which Maker is a party or by which it is bound, providing for any of the events set forth above in (i), (ii) or (iii).

 

(vii)              Failure to complete the preparation and filing of the financial statements with the SEC. Beaufort MUST be notified 7 business days ahead of failure to complete the preparation and filing of the financial statements with the SEC in a timely manner.

 

(b)                 If any Event of Default occurs (unless such Event of Default is waived in writing by the Payee), the full principal amount of this Note shall become, at the Payee's election, immediately due and payable in cash. Commencing 5 days after the occurrence of any Event of Default that results in the acceleration of this Note, the interest rate on this Note shall accrue at the rate of 12% per annum, or such lower maximum amount of interest permitted to be charged under applicable law. The Payee need not provide and Maker hereby waives any presentment, demand, protest or other notice of any kind, and the Payee may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Payee at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

4.                   Section 4. Conversion.

 

(a)                 (i) Holder's Conversion Right. At any time after the Maturity Date until this Note is no longer outstanding, this Note, including interest and principal, shall be convertible into shares of Common Stock at a fixed rate of .00001 The Holder shall effect conversions by delivering to the Company the form of Notice of Conversion attached hereto as Annex A (a "Notice of Conversion"), specifying the date on which such conversion is to be effected (a "Conversion Date"). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender Notes to the Company until the entire amount of this Note has been satisfied. The Company shall deliver any objection to any Notice of Conversion within TWO (2) Business Days of receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. If the Company does not request the issuance of the shares underlying this Note after receipt of a Notice of Conversion within TWO (2) Business days following the period allowed for any objection, the Company shall be responsible for any differential in the value of the converted shares underlying this Note between the value of the closing price on the date the shares should have been delivered and the date the shares are delivered. In addition, if the Company fails to timely (within 72 hours, 3 business days), deliver the shares per the instructions of the Payee, if permitted under Rule 144 of the rules and regulations of the Securities and Exchange Commission, free and clear of all legends in legal free trading form, the Company shall allow Payee to add two (2) days to the look back (the mechanism used to obtain the conversion price along with discount) for each day the Company fails to timely (within 72 hours, 3 business days)) deliver shares, on the next conversion.

 

The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof. Any Opinion Letter required to effectuate the issuance of the shares pursuant to this Paragraph4 (a) and the Notice of Conversion shall be provided and issued by BEAUFORT CAPITAL PARTNERS LLC. The parties hereby agree that the Payee will cover all reasonable legal costs associated with the issuance of the Opinion Letter to the Transfer Agent

 

(ii)                 [Intentionally omitted]

 

(iii)                Whenever the Set Price is adjusted pursuant to any of Section 4, the Company shall promptly mail to each Holder a notice setting forth the Set Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

2
 

 

(iv)               If (A) the Company shall declare a dividend (or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of the Notes, and shall cause to be mailed to the Holders at their last addresses as they shall appear upon the stock books of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. Holders are entitled to convert Notes during the 20-day period commencing the date of such notice to the effective date of the event triggering such notice.

 

(v)                 If, at any time while this Note is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"), then upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Underlying Share that would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the "Alternate Consideration"). For purposes of any such conversion, the determination of the Set Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Set Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration, if holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new note consistent with the foregoing provisions and evidencing the Holder's right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. If any Fundamental Transaction constitutes or results in a Change of Control Transaction, then at the request of the Holder delivered before the 90th day after such Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase the Note from the Holder for a purchase price, payable in cash within 5 trading days after such request (or, if later, on the effective date of the Fundamental Transaction), equal to the 200% of the remaining unconverted principal amount of this Note on the date of such request, plus all accrued and unpaid interest thereon, plus all other accrued and unpaid amounts due hereunder.

 

b.                   The Company covenants that it will at all times; reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Note

 

c.                    Any and all notices or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth or such other address or facsimile number as the Company may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Company, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

d.                   Notwithstanding anything to the contrary herein contained, the Holder may not convert this Note to the extent such conversion would result in the Holder, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934. as amended (the "Exchange Act") and the rules promulgated thereunder) in excess of 4.99% of the then issued and outstanding shares of Common Stock, including shares issuable upon such conversion and held by the Holder after application of this section. The provisions of this section may be waived by the Holder (but only as to itself and not to any other Holder) upon not less than 61 days prior notice to the Company. Other Holders shall be unaffected by any such waiver.

 

3
 

 

5.                   Negative Covenants. So long as any portion of this Note is outstanding, the Maker will not and will not permit any of its Subsidiaries to directly or indirectly, unless consented to in writing by the Payee:

 

i.                     amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Payee;

 

6.                   No Waiver of Payee's Rights. All payments of principal and interest shall be made without setoff, deduction or counterclaim. No delay or failure on the part of the Payee in exercising any of its options, powers or rights, nor any partial or single exercise of its options, powers or rights shall constitute a waiver thereof or of any other option, power or right, and no waiver on the part of the Payee of any of its options, powers or rights shall constitute a waiver of any other option, power or right. Maker hereby waives presentment of payment, protest, and all notices or demands in connection with the delivery, acceptance, performance, default or endorsement of this Note. Acceptance by the Payee of less than the full amount due and payable hereunder shall in no way limit the right of the Payee to require full payment of all sums due and payable hereunder in accordance with the terms hereof.

 

7.                   Modifications. No term or provision contained herein may be modified, amended or waived except by written agreement or consent signed by the party to be bound thereby.

 

8.                   Cumulative Rights and Remedies: Usury. The rights and remedies of Payee expressed herein are cumulative and not exclusive of any rights and remedies otherwise available under this. The election of Payee to avail itself of any one or more remedies shall not be a bar to any other available remedies, which Maker agrees Payee may take from time to time. If it shall be found that any interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall be reduced to the maximum permitted rate of interest under such law.

 

9.                   Use of Proceeds. Maker shall use the proceeds from this Note hereunder for general working capital purposes.

 

10.                Collection Expenses. If Payee shall commence an action or proceeding to enforce this Note, then Maker shall reimburse Payee for its costs of collection and reasonable attorney's fees incurred with the investigation, preparation and prosecution of such action or proceeding.

 

11.                Severability. If any provision of this Note is declared by a court of competent jurisdiction to be in any way invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

12.                Successors and Assigns. This Note shall be binding upon Maker and its successors and shall inure to the benefit of the Payee and its successors and assigns. The term "Payee" as used herein, shall also include any endorsee, assignee or other holder of this Note.

 

13.                Lost or Stolen Promissory Note. If this Note is lost, stolen, mutilated or otherwise destroyed, Maker shall execute and deliver to the Payee a new promissory note containing the same terms, and in the same form, as this Note. In such event, Maker may require the Payee to deliver to Maker an affidavit of lost instrument and customary indemnity in respect thereof as a condition to the delivery of any such new promissory note

 

14.                Due Authorization. This Note has been duly authorized, executed and delivered by Maker and is the legal obligation of Maker, enforceable against Maker in accordance with its terms except as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally. No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any governmental authority, bureau or agency is required in connection with the execution, delivery or performance by the Maker, or the validity or enforceability of this Note other than such as have been met or obtained. The execution, delivery and performance of this Note and all other agreements and instruments executed and delivered or to be executed and delivered pursuant hereto or thereto or the securities issuable upon conversion of this Note will not violate any provision of any existing law or regulation or any order or decree of any court, regulatory body or administrative agency or the certificate of incorporation or by-laws of the Maker or any mortgage, indenture, contract or other agreement to which the Maker is a party or by which the Maker or any property or assets of the Maker may be bound.

 

4
 

 

15.                Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each of Maker and Payee agree that all legal proceedings concerning the interpretations, enforcement and defense of this Note shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the "New York Courts'''). Each of Maker and Payee hereby irrevocably submit to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder (including with respect to the enforcement of this Note), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper. Each of Maker and Payee hereby irrevocably waive personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to the other at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each of Maker and Payee hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby.

 

16.                Notice. Any and all notices or other communications or deliveries to be provided by the Payee hereunder, including, without limitation, any conversion notice, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service or sent by certified or registered mail, postage prepaid, addressed to the Maker, or such other address or facsimile number as the Maker may specify for such purposes by notice to the Payee delivered in accordance with this paragraph. Any and all notices or other communications or deliveries to be provided by the Maker hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service or sent by certified or registered mail, postage prepaid, addressed to the Payee at the address of the Payee appearing on the books of the Maker, or if no such address appears, at the principal place of business of the Payee. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission if delivered by hand or by telecopy that has been confirmed as received by 5:00 p.m. on a business day, (ii) one business day after being sent by nationally recognized overnight courier or received by telecopy after 5:00 p.m. on any day, or (iii) five business days after being sent by certified or registered mail, postage and charges prepaid, return receipt requested.

 

17.                Equity Blocker. The Holder shall not convert this debenture into shares of common stock in an amount greater than 4.99% (9.99% if the Company is not a fully reporting company under the Securities Exchange Act of 1934 ("Non-Reporting") of the total issued and outstanding shares of common stock of the Company, at any time during the term of this Debenture. Any attempt to do so by the Holder or Payee shall not be effectuated. The calculation of the Holder's 4.99% (9.99% if the Company is Non-Reporting) holding shall include any and all shares of common stock beneficially held by the Holder at such time or within the next 60 days.

 

The undersigned signs this Note as a maker and not as a surety or guarantor or in any other capacity.

 

NYXIO TECHONOLOGIES, CORP.

 

By: /s/ Giorgio Johnson

Name: Giorgio Johnson

Title: CEO

 

 

BEAUFORT CAPITAL PARTNERS LLC

 

By: /s/ Leib Schaeffer

Leib Schaeffer

Managing Member

 

5
 



THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

  

NYXIO TECHNOLOGIES CORP.

 

WARRANT TO PURCHASE 250,000,000 SHARES

(SUBJECT TO ADJUSTMENT)

OF COMMON STOCK

 

(Void after September 4, 2019)

 

This certifies that for value BEAUFORT CAPITAL PARTNERS LLC, or registered assigns ("Holder"), is entitled, subject to the terms set forth below, at any time from and after March 4, 2015 (the "Original Issuance Date") and before 5:00 p.m., Eastern Time, on September 4, 2019, to purchase from NYXIO TECHNOLOGIES CORP., a Nevada corporation (the "Company"), 250,000 ,000 shares (subject to adjustment as described herein), of common stock (the "Common Stock") of the Company, as constituted on the Original Issuance Date, upon surrender hereof, at the principal office of the Company referred to below, with a duly executed subscription form in the form attached hereto as Exhibit A and simultaneous payment therefor in lawful money of the United States or otherwise as hereinafter provided, at the exercise price per share equal to $.0001 per share, as may be adjusted as provided elsewhere herein (the ''Purchase Price"). Term "Common Stock" shall include, unless the context otherwise requires, the stock and other securities and property at the time receivable upon the exercise of this Warrant. The term "Warrants" as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein. This Warrant was issued to the Holders in connection with the sale by the Company to the Holder of the Company's convertible note at a 45% discounted Note dated September, 4, 2014 in the aggregate principal amount of $25,000 (the "Note").

 

1.                    Exercise.

 

A.                 This Warrant may be exercised at any time or from time to time from and after the Original Issuance Date and before 5:00 p.m., Eastern Time, on September, 4, 2014, on any business day, for the full number of shares of Common Stock called for hereby, by surrendering it at the principal office of the Company, at 1330 S.W. 3RD AVE. PORTLAND , OREGON 97201, with the subscription form duly executed, together with payment in an amount equal to (a) the number of shares of Common Stock called for on the face of this Warrant, as adjusted in accordance with the preceding paragraph of this Warrant (without giving effect to any further adjustment herein) multiplied (b) by the Purchase Price. Payment of this amount may be made at Holder's choosing either (1) by payment in cash or by corporate check, payable to the order of the Company, or (2) by the Company not issuing that number of shares of Common Stock subject to this Warrant having a Fair Market Value (as defined below) on the date of exercise equal to such sum. This Warrant may be exercised for less than the full number of shares of Common Stock at the time called for hereby, except that the number of shares receivable upon the exercise of this Warrant as a whole, and the sum payable upon the exercise of this Warrant as a whole, shall be proportionately reduced. Upon a partial exercise of this Warrant in accordance with the terms hereof, this Warrant shall be surrendered, and a new Warrant of the same twenty or and for the purchase of the number of such shares not purchased upon such exercise shall be issued by the Company to Holder without any charge therefor. A Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of such shares of record as of the close of business on such date. Within two business days after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of full shares of Common Stock issuable upon such exercise, together with cash, in lieu of any fraction of a share, equal to such fraction of the then Fair Market Value on the date of exercise of one full share of Common Stock. The Company represents, warrants and covenants that it shall at all reserve for issuance that number of shares of Common Stock equal to 100% of the shares of Common Stock issuable upon exercise of this Warrant.

 

B.                  "Fair Market Value" shall mean, as of any date, (i) if shares of the Common Stock are listed on a national securities exchange, the average of the closing prices as reported for composite transactions during the twenty (20) consecutive trading days preceding the trading day immediately prior to such date or, if no sale occurred on a trading day, then the mean between the closing bid and asked prices on such exchange on such trading day; (ii) if shares of the Common Stock are not so listed but are traded on the Nasdaq/ OTC Markets SmallCap Market www.nasdaq.com ("NSCM"), the average of the closing prices as reported on the NSCM during the twenty (20) consecutive trading days preceding the trading day immediately prior to such date or, if no sale occurred on a trading day, then the mean between the highest bid and lowest asked prices as of the close of business on such trading day, as reported on the NSCM; or if applicable, the Nasdaq National Market ("NNM"), or if not then included for quotation on the NNM or NSCM, the average of the highest reported bid and lowest reported asked prices as reported by the OTC Bulletin Board or the National Quotations Bureau, as the case may be, or (iii) if the shares of the Common Stock are not then publicly traded, the fair market price, not less than book value thereof, of the Common Stock as determined in good faith by the Holder.

 

2.                    Shares Fully Paid; Payment of Taxes. All shares of Common Stock issued upon the exercise of a Warrant shall be validly issued, fully paid and non-assessable, and the Company shall pay all taxes and other governmental charges (other than income taxes to the holder) that may be imposed in respect of the issue or delivery thereof.

 

 
 

 

3.                    Transfer and Exchange. This Warrant and all rights hereunder are transferable, in whole or in part, on the books of the Company maintained for such purpose at its principal office referred to above by Holder in person or by duly authorized attorney, upon surrender of this Warrant together with a completed and executed assignment form in the form attached as Exhibit B, payment of any necessary transfer tax or other governmental charge imposed upon such transfer and an opinion of counsel reasonably acceptable the Company stating that such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended. Upon any partial transfer, the Company will issue and deliver to Holder a new Warrant or Warrants with respect to the shares of Common Stock not so transferred. Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that this Warrant when endorsed in blank shall be deemed negotiable and that when this Warrant shall have been so endorsed, the holder hereof may be treated by the Company and all other persons dealing with this Warrant as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, or to the transfer hereof on the books of the Company, any notice to the contrary notwithstanding; but until such transfer on such books, the Company may treat the registered Holder hereof as the owner for all purposes.

 

This Warrant is exchangeable at such office for Warrants for the same aggregate number of shares of Common Stock, each new Warrant to represent the right to purchase such number of shares as the Holder shall designate at the time of such exchange.

 

4.                    Anti-Dilution Provisions.

 

A.                 Adjustment for Dividends in Other Stock and Property Reclassifications. In case at any time or from time to time the holders of the Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, on or after the record date fixed for the determination of eligible shareholders, shall have become entitled to receive, without payment therefor,

 

•          any by way of dividend, other or additional stock or other securities or property (other than

•          any cash or other property paid or payable out of any source other than retained earnings (determined in accordance with generally accepted accounting principles) , or

 

•          other or additional stock or other securities or property (including cash) by way of stock-split, spin-off, reclassification , combination of shares or similar corporate rearrangement , (other than (x) additional shares of Common Stock or any other stock or securities into which such Common Stock shall have been changed, (y) any other stock or securities convertible into or exchangeable for such Common Stock or such other stock or securities or (z) any Stock Purchase Rights (as defined below), issued as a stock dividend or stock-split, adjustments in respect of which shall be covered by the terms of Section 4, then and in each such case Holder, upon the exercise hereof as provided in Section 1, shall be entitled to receive the amount of stock and other secunt1es and property (including cash in the cases referred to in clauses (2) and (3) above) which such Holder would hold on the date of such exercise if on the Original Issuance Date Holder had been the holder of record of the number of shares of Common Stock called for on the face of this Warrant, as adjusted in accordance with the first paragraph of this Warrant, and had thereafter, during the period from the Original Issuance Date to and including the date of such exercise, retained such shares and/or all other or additional stock and other securities and property (including cash in the cases referred to in clause (2) and (3) above) receivable by it as aforesaid during such period , giving effect to all adjustments called for during such period by Section 4.A and Section 4.B.

 

B.                  Adjustment for Reorganization, Consolidation and Merger. In case of any reorganization of the Company (or any other corporation the stock or other securities of which are at the time receivable on the exercise of this Warrant) after the Original Issuance Date, or in case, after such date, the Company (or any such other corporation) shall consolidate with or merge into another corporation or entity or convey all or substantially all its assets to another corporation or entity, then and in each such case Holder, upon the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization , consolidation, merger or conveyance, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise of this Warrant prior to such consummation, the stock or other securities or property to which such Holder would have been entitled upon such consummation if Holder had exercised this Warrant immediately prior thereto, all subject to further adjustment as provided in this Section 4; in each such case, the terms of this Warrant shall be applicable to the shares of stock or other securities or property receivable upon the exercise of this Warrant after such consummation.

 

C.                  Sale of Shares Below Purchase Price.

 

•          If at any time or from time to time on or after the Original Issuance Date, the Company issues or sells, or is deemed by the express provisions of this Section 4.C to have issued or sold, Additional Shares of Common Stock (as hereinafter defined), other than as a dividend or other distribution on any class of stock or upon a subdivision or combination of shares of Common Stock, for an Effective Price (as hereinafter defined) less than the then existing Purchase Price, then and in each such case the Purchase Price shall each time be reduced to the Effective Price at the number of shares of Common Stock issuable upon exercise of these Warrants shall be increased proportionally.

 

•          For the purpose of making any adjustment required under this Section 4.C, the consideration received by the Company for any issue or sale of securities shall to the extent it consists of cash be computed at the amount of cash received by the Company, to the extent it consists of property other than cash, be computed at the fair value of that property as determined in good faith by the Holder, and (iii) if Additional Shares of Common Stock, Convertible Securities (as hereinafter defined) or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Holder to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options.

 

2
 

 

•          For the purpose of the adjustment required under this Section 4.C, if the Company issues or sells any rights or options for the purchase of, or stock or other securities convertible into or exchangeable for, Additional Shares of Common Stock (such convertible or exchangeable stock or securities being hereinafter referred to as "Convertible Securities") and if the Effective Price of such Additional Shares of Common Stock is less than either the Fair Market Value or the Purchase Price then in effect, then in each case the Company shall be deemed to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon exercise, conversion or exchange thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such rights or options or Convertible Securities, plus, in the case of such rights or options, the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights or options, plus, in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange thereof.

 

•          For the purpose of the adjustment required under this Section 4.C, if the Company issues or sells, or is deemed by the express provisions of this subsection to have issued or sold, any rights or options for the purchase of Convertible Securities and if the Effective Price of the Additional Shares of Common Stock underlying such Convertible Securities is less than either the Fair Market Value or the Purchase Price then in effect, then in each such case the Company shall be deemed to have issued at the time of the issuance of such rights or options the maximum number of Additional Shares of Common Stock issuable upon conversion or exchange of the total amount of Convertible Securities covered by such rights or options and to have received as consideration for the issuance of such Additional Shares of Common Stock an amount equal to the amount of consideration , if any, received by the Company for the issuance of such rights or options, plus the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights or options and plus the minimum amount of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange of such Convertible Securities.

 

•          "Additional Shares of Common Stock" shall mean all shares of Common Stock issued by the Company on or after the Original Issuance Date, whether or not subsequently reacquired or retired by the Company other than (i) shares of Common Stock issuable upon exercise of this Warrant of the Note and (ii) shares of Common Stock issuable upon exercise of warrants, options or other convertible securities to purchase Common Stock issued and outstanding as of the Original Issuance Date (provided that the exercise price and other terms of such warrants, options or other convertible securities are not modified after the Original Issuance Date to adjust the exercise price). The "Effective Price" of Additional Shares of Common Stock shall mean the quotient determined by dividing the total number of Additional Shares of Common Stock issued or sold, or deemed to have been issued or sold by the Company under this Section 4.C, into the aggregate consideration received, or deemed to have been received, by the Company for such issue under this Section 4.C, for such Additional Shares of Common Stock. "Other Securities" with respect to an issue or sale of Additional Shares of Common Stock shall mean Convertible Securities other than the Warrants including this Warrant; "the number of shares of Common Stock underlying Other Securities" on a particular date shall mean the number of shares of Common Stock issuable upon the exercise, conversion or exchange, as the case may be, of such Other Securities at the close of business on such date.

 

•          Other than a reduction pursuant to its applicable anti-dilution prov1s10ns, any reduction in the conversion price of any Convertible Security, whether outstanding on the Original Issuance Date or thereafter , or the subscription price of any option, warrant or right to purchase Common Stock or any Convertible Security (whether such option, warrant or right is outstanding on the Original Issuance Date or thereafter), to an Effective Price less than the Fair Market Value or the then Purchase Price shall be deemed to be an issuance of such Convertible Security and the issuance of all such options, warrants or subscription rights, and the provisions of Sections 4.C. shall apply thereto mutatis mutandis.

 

•          In case any shares of stock or other securities, other than Common Stock, shall at the time be receivable upon the exercise of this Warrant, and in case any additional shares of such stock or any additional such securities (or any stock or other securities convertible into or exchangeable for any such stock or securities) shall be issued or sold for a consideration per share such as to dilute the purchase rights evidenced by this Warrant, then and in each such case the Purchase Price shall forthwith be adjusted, substantially in the manner provided for above in this Section 4.C, so as to protect the Holder of this Warrant against the effect of such dilution.

 

•          In case the Company shall take a record of the holders of shares of its stock of any class for the purpose of entitling them (a) to receive a dividend or a distribution payable in Common Stock or in Convertible Securities, or (b) to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the Additional Shares of Common Stock issued or sold or deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution, or the date of the granting of such rights of subscription, purchase or other acquisition, as the case may be.

 

D.                 Adjustment for Certain Dividends and Distributions. If the Company at any time or from time to time makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, then and in each such event

 

(1)  the Purchase Price then in effect shall be decreased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, by multiplying the Purchase Price then in effect by a fraction (A) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (B) the deno01inator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date as the case may be, plus the number of shares of Common Stock issuable in payment of such dividend or distribution; provided , however , that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Purchase Price shall be recomputed accordingly as of the close of business on such record date, and thereafter the Purchase Price shall be adjusted pursuant to this Section 4.D as of the time of actual payment of such dividends or distributions; and

 

(2)  the number of shares of Common Stock theretofore receivable upon the exercise of this Warrant shall be increased, as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, in inverse proportion to the decrease in the Purchase Price.

 

3
 

 

E.                  Stock Split and Reverse Stock Split. If the Company at any time or from time to time effects a reverse stock split or subdivision of the outstanding Common Stock, the Purchase Price then in effect immediately before that stock split or subdivision shall be proportionately decreased and the number of shares of Common Stock theretofore receivable upon the exercise of this Warrant shall be proportionately increased. If the Company at any time or from time to time effects a reverse stock split or combines the outstanding shares of Common Stock into a smaller number of shares, the Purchase Price then in effect immediately before that reverse stock split or combination shall be proportionately increased and the number of shares of Common Stock theretofore receivable upon the exercise of this Warrant shall be proportionately decreased. Each adjustment under this Section 4.E shall become effective at the close of business on the date the stock split, subdivision, reverse stock split or combination becomes effective.

 

F.                  No Impairment. The Company will not, by amendment of its Amended and Restated Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders of the Warrants against impairment.

 

G.                 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 4, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of a Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any holder of a Warrant, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) Purchase Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.

 

H.                 Adjustment for Certain Events. If at any time after the Original Issuance Date ,the share price, of a share of common stock loses the bid (ex: $.01 on the ask with zero market makers on the bid on level 2), loses DTC eligibility, and/or gets "chilled for deposit", then the Purchase Price resets to $.00001 if it is not then below $.01.

 

5.                    Notices of Record Date. In case:

 

A.                 the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of the Warrants) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

 

B.                  of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation, or

 

C.                  of any voluntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company will mail or cause to be mailed to each holder of a Warrant at the time outstanding a notice specifying, as the case may be, (a) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (b) the date on which such reorganization, reclassification , consolidation, merger, conveyance, dissolution, liquidation or winding-up is expected to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the exercise of the Warrants) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization , reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up, such notice shall be mailed at least twenty (20) days prior to the date therein specified.

 

6.                    Stock Purchase Rights. If at any time or from time to time, the Company grants or issues to the record holders of the Common Stock any options, warrants or subscription rights (collectively, the "Stock Purchase Rights") entitling a holder to purchase Common Stock or any security convertible into or exchangeable for Common Stock or to purchase any other stock or securities of the Company, the Holder shall be entitled to acquire, upon the terms applicable to such Stock Purchase Rights, the aggregate Stock Purchase Rights which Holder could have acquired if Holder had been the record holder of the maximum number of shares of Common Stock issuable upon exercise of this Warrant on both (x) the record date for such grant or issuance of such Stock Purchase Rights, and (y) the date of the grant or issuance of such Stock Purchase Rights.

 

7.                    Loss or Mutilation. Upon receipt by the Company of evidence satisfactory to it (in the exercise 'of reasonable discretion) of the ownership of and the loss, theft, destruction or mutilation of any Warrant and (in the case of loss, theft or destruction) of indemnity satisfactory to it (in the exercise of reasonable discretion), and (in the case of mutilation) upon surrender and cancellation thereof, the Company will execute and deliver in lieu thereof a new Warrant.

 

8.                    Reservation of Common Stock. The Company shall at all times reserve and keep available for issue upon the exercise of Warrants such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants.

 

9.                    No Redemption of Warrant. This Warrant may not be redeemed.

 

4
 

 

10.                 Notices. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class, registered or certified mail, postage prepaid, to the address furnished to the Company in writing by the last holder of this Warrant who shall have furnished an address to the Company in writing.

 

11.                 Change; Modifications; Waiver. The terms of this Warrant may only be amended, waived and or modified by written agreement of the Company and the Holder

 

12.                 Headings. The headings in this Warrant are for purposes of convenience m reference only, and shall not be deemed to constitute a part hereof.

 

[Remainder of page intentionally left blank]

 

5
 

 

13.                 Law; Etc. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The parties hereto hereby irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under this Agreement, shall be brought solely in a federal or state court located in the City, County and State of New York. By its execution hereof, the parties hereby covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in New York City. The parties hereto waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other party hereto of its reasonable counsel fees and disbursements.

 

Dated: 9/5/2014

 

 

NYXIO TECHNOLOGIES CORP.

 

By: /s/ Giorgio Johnson

Name:

Title:

 

6
 

 

EXHIBIT A

 

SUBSCRIPTION FORM

 

(To be executed only upon exercise of Warrant)

 

The undersigned registered owner of this Warrant irrevocably exercises this Warrant and purchases _____ of the number of shares of Common Stock of NYXIO TECHNOLOGIES CORP., purchasable with this Warrant, and herewith makes payment therefor, all at the price and on the terms and conditions specified in this Warrant.

 

Dated:

 

 

______________________________________

(Signature of Registered Owner)

 

_______________________________________

(Street Address)

 

_______________________________________

(City / State / Zip Code)

 

7
 

 

EXHIBIT B

 

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock set forth below:

 

Name of Assignee Address No. of Shares

 

 

and does hereby irrevocably constitute and appoint ________________ Attorney to make such transfer on the books of NYXIO TECHNOLOGIES CORP., maintained for the purpose, with full power of substitution in the premises.

 

Date:_______________________

 

 

_______________________________

(Signature)

 

________________________________

(Witness)

 

 

The undersigned Assignee of the Warrant hereby makes to NYXIO TECHNOLOGIES CORP., as of the date hereof, with respect to the Assignee, all of the representations and warranties made by the Holder, and the undersigned Assignee agrees to be bound by all the terms and conditions of the Warrant , dated September, 4, 2014 of NYXIO TECHNOLOGIES CORP.

 

Date:_______________________

 

 

_______________________________

(Signature)

 

8
 



CONVERTIBLE PROMISSORY NOTE

 

US $106,374.03 July 7, 2014

 

For good and valuable consideration, Nyxio Technologies Corp., a Nevada corporation, (“Maker”), hereby makes and delivers this Promissory Note (this “Note”) in favor of CANE CLARK LLP, a Nevada limited liability partnership or its assigns (“Holder”), and hereby agree as follows:

 

1.                  Principal Obligation and Interest. For value received, Maker promises to pay to Holder at 3273 E. Warm Springs Rd., Las Vegas, Nevada 89120, or at such other place as Holder may designate in writing, in currently available funds of the United States, the principal sum of One Hundred Six Thousand Three hundred Seventy-four and 03/100 U.S. DOLLARS. Maker’s obligation under this Note shall accrue interest at the rate of six percent (6.0%) per annum from the date hereof until paid in full, compounded monthly. Interest shall be computed on the basis of a 365-day year or 366-day year, as applicable, and actual days lapsed.

 

2. Payment Terms.

 

All principal and accrued interest due hereunder shall be paid in full upon the earlier of: (i) thirty (30) days following written demand therefor by Holder or, (ii) April 7, 2015. All payments shall be applied first to late charges, then to interest, then to principal and shall be credited to the Maker's account on the date that such payment is physically received by the Holder. Maker shall have the right to prepay all or any part of the principal under this Note without penalty.

 

3. Conversion. Holder shall have the right at any time to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of common stock of the Maker, at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”). The number of shares of common stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion given by Holder (the “Notice of Conversion”), delivered to the Maker by the Holder on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date.

 

The Conversion Price shall equal Sixty-five percent (65%) of the Market Price (as defined herein). “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Maker’s common stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the electronic quotation system operated by OTC Markets, Inc., on the OTCQB or OTC Pink market tier, as applicable, as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the electronic quotation system operated by OTC Markets, Inc. is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Maker and the Holder. “Trading Day” shall mean any day on which the Maker’s common stock is tradable for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Maker’s common stock is then being traded.

 

4. Representations and Warranties of Maker. Maker hereby represents and warrants the following to Holder:

 

a.                   Maker and those executing this Note on its behalf have the full right, power, and authority to execute, deliver and perform the Obligations under this Note, which are not prohibited or restricted under the articles of incorporation or bylaws of Maker. This Note has been duly executed and delivered by an authorized officer of Maker and constitutes a valid and legally binding obligation of Maker enforceable in accordance with its terms.

 

b.                  The execution of this Note and Maker’s compliance with the terms, conditions and provisions hereof does not conflict with or violate any provision of any agreement, contract, lease, deed of trust, indenture, or instrument to which Maker is a party or by which Maker is bound.

 

5. Defaults. The following shall be events of default under this Note:

 

a.                   Maker’s failure to remit any payment under this Note on before the date due, if such failure is not cured in full within five (5) days of written notice of default;

 

b.                  Maker’s failure to perform or breach of any non-monetary obligation or covenant set forth in this Note or in any other written agreement between Maker and Holder if such failure is not cured in full within ten (10) days following delivery of written notice thereof from Holder to Maker;

 

c.                   If Maker is dissolved, whether pursuant to any applicable articles of incorporation or bylaws, and/or any applicable laws, or otherwise;

 

d.                  The entry of a decree or order by a court having jurisdiction in the premises adjudging the Maker bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Maker under the federal Bankruptcy Code or any other applicable federal or state law, or appointing a receiver, liquidator, assignee or trustee of the Maker, or any substantial part if its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of twenty (20) days;

 

 
 

 

e.                   Maker’s institution of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or its filing of a petition or answer or consent seeking reorganization or relief under the federal Bankruptcy Code or any other applicable federal or state law, or its consent to the filing of any such petition or to the appointment of a receiver, liquidator, assignee or trustee of the company, or of any substantial part of its property, or its making of an assignment for the benefit of creditors or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Maker in furtherance of any such action; or

 

6. Rights and Remedies of Holder. Upon the occurrence of an event of default by Maker under this Note or at any time before default when the Holder reasonably feels insecure, then, in addition to all other rights and remedies at law or in equity, Holder may exercise any one or more of the following rights and remedies:

 

a.                   Accelerate the time for payment of all amounts payable under this Note by written notice thereof to Maker, whereupon all such amounts shall be immediately due and payable.

 

b.                  Pursue any other rights or remedies available to Holder at law or in equity.

 

7. Interest To Accrue Upon Default. Upon the occurrence of an event of default by Maker under this Note, the balance then owing under the terms of this Note shall accrue interest at the rate of eighteen percent (18.0%) per annum, compounded monthly, from the date of default until Holder is satisfied in full.

 

8. Representation of Counsel. Maker acknowledges that they have consulted with or have had the opportunity to consult with Maker’s legal counsel prior to executing this Note. This Note has been freely negotiated by Maker and Holder and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Note.

 

9. Choice of Laws; Actions. This Note shall be constructed and construed in accordance with the internal substantive laws of the State of Nevada, without regard to the choice of law principles of said State. Maker acknowledges that this Note has been negotiated in Clark County, Nevada. Accordingly, the exclusive venue of any action, suit, counterclaim or cross claim arising under, out of, or in connection with this Note shall be the state or federal courts in Clark County, Nevada. Maker hereby consents to the personal jurisdiction of any court of competent subject matter jurisdiction sitting in Clark County, Nevada.

 

10. Usury Savings Clause. Maker expressly agrees and acknowledges that Maker and Holder intend and agree that this Note shall not be subject to the usury laws of any state other than the State of Nevada. Notwithstanding anything contained in this Note to the contrary, if collection from Maker of interest at the rate set forth herein would be contrary to applicable laws of such State, then the applicable interest rate upon default shall be the highest interest rate that may be collected from Maker under applicable laws at such time.

 

11. Costs of Collection. Should the indebtedness represented by this Note, or any part hereof, be collected at law, in equity, or in any bankruptcy, receivership or other court proceeding, or this Note be placed in the hands of any attorney for collection after default, Maker agrees to pay, in addition to the principal and interest due hereon, all reasonable attorneys’ fees, plus all other costs and expenses of collection and enforcement, including any fees incurred in connection with such proceedings or collection of the Note.

 

12. Miscellaneous.

 

a.                   This Note shall be binding upon Maker and shall inure to the benefit of Holder and its successors, assigns, heirs, and legal representatives.

 

b.                  Any failure or delay by Holder to insist upon the strict performance of any term, condition, covenant or agreement of this Note, or to exercise any right, power or remedy hereunder shall not constitute a waiver of any such term, condition, covenant, agreement, right, power or remedy.

 

c.                   Any provision of this Note that is unenforceable shall be severed from this Note to the extent reasonably possible without invalidating or affecting the intent, validity or enforceability of any other provision of this Note.

 

d.                  This Note may not be modified or amended in any respect except in a writing executed by the party to be charged.

 

e.                   Time is of the essence.

 

2
 

 

13. Notices. All notices required to be given under this Note shall be given as follows or at such other address as a party may designate by written notice to the other parties:

 

To Maker:

 

Nyxio Technologies Corp.
Attn: Giorgio Johnson
 1330 S.W. 3rd Ave.
Portland, OR 97201

 

Cane Clark LLP
Attn: Bryan Clark  
3273 E. Warm Springs Rd  
Las Vegas, NV 89120  
(702) 944-7100 (fax)  

 

Notices may be transmitted by facsimile, certified mail, private delivery, or any other commercially reasonable means, and shall be deemed given upon receipt by the Party to whom they are addressed.

 

14. Waiver of Certain Formalities. All parties to this Note hereby waive presentment, dishonor, notice of dishonor and protest. All parties hereto consent to, and Holder is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due hereunder, or under any documents or instruments relating to or securing this Note. Any such action taken by Holder shall not discharge the liability of any party to this Note.

 

IN WITNESS WHEREOF, this Note has been executed effective the date and place first written above.

 

“Maker”: NYXIO TECHNOLOGIES CORP.

 

By: /s/ Giorgio Johnson

Giorgio Johnson, CEO

 

 

“Holder”: CANE CLARK LLP

 

By: /s/ Bryan Clark

Bryan Clark, Managing Partner

 

3
 



CONVERTIBLE PROMISSORY NOTE

 

US $14,975

October 1, 2014

  

For good and valuable consideration, Nyxio Technologies Corp., a Nevada corporation, (“Maker”), hereby makes and delivers this Promissory Note (this “Note”) in favor of CLARK CORPORATE LAW GROUP LLP, a Nevada limited liability partnership or its assigns (“Holder”), and hereby agree as follows:

 

1.                  Principal Obligation and Interest. For value received, Maker promises to pay to Holder at 3273 E. Warm Springs Rd., Las Vegas, Nevada 89120, or at such other place as Holder may designate in writing, in currently available funds of the United States, the principal sum of Fourteen Thousand Nine hundred Seventy-five U.S. DOLLARS. Maker’s obligation under this Note shall accrue interest at the rate of six percent (6.0%) per annum from the date hereof until paid in full, compounded monthly. Interest shall be computed on the basis of a 365-day year or 366-day year, as applicable, and actual days lapsed.

 

2. Payment Terms.

 

All principal and accrued interest due hereunder shall be paid in full upon the earlier of: (i) thirty (30) days following written demand therefor by Holder or, (ii) May 7, 2015. All payments shall be applied first to late charges, then to interest, then to principal and shall be credited to the Maker's account on the date that such payment is physically received by the Holder. Maker shall have the right to prepay all or any part of the principal under this Note without penalty.

 

3. Conversion. Holder shall have the right at any time to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of common stock of the Maker, at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”). The number of shares of common stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion given by Holder (the “Notice of Conversion”), delivered to the Maker by the Holder on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date.

 

The Conversion Price shall equal Sixty-five percent (65%) of the Market Price (as defined herein). “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Maker’s common stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the electronic quotation system operated by OTC Markets, Inc., on the OTCQB or OTC Pink market tier, as applicable, as reported by a reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the electronic quotation system operated by OTC Markets, Inc. is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Maker and the Holder. “Trading Day” shall mean any day on which the Maker’s common stock is tradable for any period on the OTCBB, or on the principal securities exchange or other securities market on which the Maker’s common stock is then being traded.

 

4. Representations and Warranties of Maker. Maker hereby represents and warrants the following to Holder:

 

a.                   Maker and those executing this Note on its behalf have the full right, power, and authority to execute, deliver and perform the Obligations under this Note, which are not prohibited or restricted under the articles of incorporation or bylaws of Maker. This Note has been duly executed and delivered by an authorized officer of Maker and constitutes a valid and legally binding obligation of Maker enforceable in accordance with its terms.

 

b.                  The execution of this Note and Maker’s compliance with the terms, conditions and provisions hereof does not conflict with or violate any provision of any agreement, contract, lease, deed of trust, indenture, or instrument to which Maker is a party or by which Maker is bound.

 

5. Defaults. The following shall be events of default under this Note:

 

a.                   Maker’s failure to remit any payment under this Note on before the date due, if such failure is not cured in full within five (5) days of written notice of default;

 

b.                  Maker’s failure to perform or breach of any non-monetary obligation or covenant set forth in this Note or in any other written agreement between Maker and Holder if such failure is not cured in full within ten (10) days following delivery of written notice thereof from Holder to Maker;

 

c.                   If Maker is dissolved, whether pursuant to any applicable articles of incorporation or bylaws, and/or any applicable laws, or otherwise;

 

d.                  The entry of a decree or order by a court having jurisdiction in the premises adjudging the Maker bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Maker under the federal Bankruptcy Code or any other applicable federal or state law, or appointing a receiver, liquidator, assignee or trustee of the Maker, or any substantial part if its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of twenty (20) days;

 

 
 

 

e.                   Maker’s institution of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or its filing of a petition or answer or consent seeking reorganization or relief under the federal Bankruptcy Code or any other applicable federal or state law, or its consent to the filing of any such petition or to the appointment of a receiver, liquidator, assignee or trustee of the company, or of any substantial part of its property, or its making of an assignment for the benefit of creditors or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Maker in furtherance of any such action; or

 

6. Rights and Remedies of Holder. Upon the occurrence of an event of default by Maker under this Note or at any time before default when the Holder reasonably feels insecure, then, in addition to all other rights and remedies at law or in equity, Holder may exercise any one or more of the following rights and remedies:

 

a.                   Accelerate the time for payment of all amounts payable under this Note by written notice thereof to Maker, whereupon all such amounts shall be immediately due and payable.

 

b.                  Pursue any other rights or remedies available to Holder at law or in equity.

 

7. Interest To Accrue Upon Default. Upon the occurrence of an event of default by Maker under this Note, the balance then owing under the terms of this Note shall accrue interest at the rate of eighteen percent (18.0%) per annum, compounded monthly, from the date of default until Holder is satisfied in full.

 

8. Representation of Counsel. Maker acknowledges that they have consulted with or have had the opportunity to consult with Maker’s legal counsel prior to executing this Note. This Note has been freely negotiated by Maker and Holder and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Note.

 

9. Choice of Laws; Actions. This Note shall be constructed and construed in accordance with the internal substantive laws of the State of Nevada, without regard to the choice of law principles of said State. Maker acknowledges that this Note has been negotiated in Clark County, Nevada. Accordingly, the exclusive venue of any action, suit, counterclaim or cross claim arising under, out of, or in connection with this Note shall be the state or federal courts in Clark County, Nevada. Maker hereby consents to the personal jurisdiction of any court of competent subject matter jurisdiction sitting in Clark County, Nevada.

 

10. Usury Savings Clause. Maker expressly agrees and acknowledges that Maker and Holder intend and agree that this Note shall not be subject to the usury laws of any state other than the State of Nevada. Notwithstanding anything contained in this Note to the contrary, if collection from Maker of interest at the rate set forth herein would be contrary to applicable laws of such State, then the applicable interest rate upon default shall be the highest interest rate that may be collected from Maker under applicable laws at such time.

 

11. Costs of Collection. Should the indebtedness represented by this Note, or any part hereof, be collected at law, in equity, or in any bankruptcy, receivership or other court proceeding, or this Note be placed in the hands of any attorney for collection after default, Maker agrees to pay, in addition to the principal and interest due hereon, all reasonable attorneys’ fees, plus all other costs and expenses of collection and enforcement, including any fees incurred in connection with such proceedings or collection of the Note.

 

12. Miscellaneous.

 

a.                   This Note shall be binding upon Maker and shall inure to the benefit of Holder and its successors, assigns, heirs, and legal representatives.

 

b.                  Any failure or delay by Holder to insist upon the strict performance of any term, condition, covenant or agreement of this Note, or to exercise any right, power or remedy hereunder shall not constitute a waiver of any such term, condition, covenant, agreement, right, power or remedy.

 

c.                   Any provision of this Note that is unenforceable shall be severed from this Note to the extent reasonably possible without invalidating or affecting the intent, validity or enforceability of any other provision of this Note.

 

d.                  This Note may not be modified or amended in any respect except in a writing executed by the party to be charged.

 

e.                   Time is of the essence.

 

2
 

 

13. Notices. All notices required to be given under this Note shall be given as follows or at such other address as a party may designate by written notice to the other parties:

 

To Maker:

 

Nyxio Technologies Corp.
Attn: Giorgio Johnson
 1330 S.W. 3rd Ave.
Portland, OR 97201

 

 To Holder:

 

Cane Clark LLP
Attn: Bryan Clark  
3273 E. Warm Springs Rd  
Las Vegas, NV 89120  
(702) 944-7100 (fax)  

 

Notices may be transmitted by facsimile, certified mail, private delivery, or any other commercially reasonable means, and shall be deemed given upon receipt by the Party to whom they are addressed.

 

14. Waiver of Certain Formalities. All parties to this Note hereby waive presentment, dishonor, notice of dishonor and protest. All parties hereto consent to, and Holder is hereby expressly authorized to make, without notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of payment of any sum or sums due hereunder, or under any documents or instruments relating to or securing this Note. Any such action taken by Holder shall not discharge the liability of any party to this Note.

 

IN WITNESS WHEREOF, this Note has been executed effective the date and place first written above.

 

“Maker”: NYXIO TECHNOLOGIES CORP.

 

By: /s/ Giorgio Johnson

Giorgio Johnson, CEO

 

 

“Holder”: CLARK CORPORATE LAW GROUP LLP

 

 

By: /s/ Bryan Clark

Bryan Clark, Managing Partner

 

3
 



SECURITIES EXCHANGE AND SETTLEMENT AGREEMENT

 

This Securities Exchange and Settlement Agreement, dated as of October l 3, 2014 (this ''Agreement''), between Nyxio Technologies Corp., a Nevada corporation (inclusive of any Subsidiaries, "Issuer"), and Beaufort Capital Partners LLC ("Investor'') (Issuer and Investor may hereinafter be referred to individually as a "Party" or jointly as the "Parties").

 

WHEREAS, Issuer issued a certain debt security in the form of a convertible promissory note in the principal face amount of twenty two thousand two hundred twenty five dollars (USD $22,250) to Tide Poo1 Venture Corporation ("Original Holder") as of February 20, 2014, a copy of which convertible promissory note is annexed hereto as Exhibit A and made a part hereof (the "Debt Securities Instrument");

 

WHEREAS, pursuant to a certain Debt Securities Assignment and Purchase Agreement between Original Holder and Investor, and confirmed by the Issuer, dated as of September 8, 2014, a copy of which is annexed hereto as Exhibit B (the "Debt Assignment and Purchase Agreement"), Investor has heret0fore acquired from Original Holder all rights and interest in and to the debt securities reflected in the Debt Securities Instrument, in the principal and interest amount of twenty three thousand four hundred eight dollars and twenty two cents {USD$23,408.22) (the ..Debt Securities" ) in consideration of a cash sum following such securities having become eligible for resale based on certain conditions pursuant to exemption from registration under Rule 144 (such securities acquisition, the "144 Debt Conveyance..}, and Investor is now the sole Beneficial Owner of the Debt Securities;

 

WHEREAS, notwithstanding that, in accordance with its stated terms, the Debt Securities Instrument has language regarding the rights of exchange or convertibility into shares of the common stock of lssuer, $0.001 par value ("Par Value") per share (the "Issuer Common Stock"), and without regard to such terms of "conversion" provisions in the Debt Securities Instrument, Investor desires to exchange the Debt Securities from time to time hereinafter for equity securities in the form of unrestricted shares of Issuer Common Stock, and Issuer desires to facilitate such exchange, in each case pursuant to their respective economic interests and in each case as more specifically and fully set forth herein; and

 

WHEREAS, subject to certain conditions, and pursuant to Section 3(a)(9) of the Securities Act, one or more exchanges of the Debt Securities for shares of Issuer Common Stock (each, a "Exchange") while beneficially held by Investor is/are eligible to be effected without registration as more specifically and fully provided herein;

 

NOW, THEREFORE, the Parties hereby acknowledge. represent, warrant, covenant and agree, in each case as applicable, as follows for the benefit of each other as well as the benefit of the securities legal counsel and securities transfer agent professiona1s involved in the 144 Debt Conveyance and any one or more 3(a)(9) Exchanges hereunder (such transactions collectively, the "Transactions"):

 

1.                   Recitals. The foregoing recitals are hereby incorporated by reference into this Agreement and made a part hereof.

 

2.                   Definitions. For purposes of this Agreement, the following terms, when appearing in their capitalized forms as follows, shall have the corresponding assigned meanings:

 

"144 Debt Conveyance" - shall have the meaning specified in the second paragraph of the recitals to this Agreement.

 

"3(a)(9) Exchange" - shall have the meaning specified in the fifth paragraph of the recitals to this Agreement.

"Affiliate'' - with respect to any specified Person, any other Person who, directly or indirectly, through one or more intermediaries, Controls, is Controlled By, or is Under Common Control With, such specified Person.

"Agreement" - shall have the meaning specified in the preamble above.

 

"Authorization" - any authorization, approval, consent, certificate, license, permit or franchise of or from any Governmental Authority or pursuant to any Law.

"Beneficial Owner" - with respect to any shares means a Person who shall be deemed to be the beneficial owner of such shares (i) which such Person or any of its Affiliates or associates (as such terms is defined in Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly or indirectly, (ii) which such Person or any of its Affiliates or associates has, directly or indirectly, (A) the right to acquire (whether such right is exercisable immediately or subject only to the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of consideration rights, exchange rights, warrants or options, or otherwise, or (B) the right to vote pursuant to any agreement, arrangement or understanding, (iii) which are beneficially owned, directly or indirectly, by any other Persons with whom such Person or any of its Affiliates or associates or any Person with whom such Person or any of its Affiliates or associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any such shares, or (iv) pursuant to Section 13(d) of the Exchange Act and any rules or regulations promulgated thereunder.

 

"'Clearing Date" - the first date upon which both {i) the Exchange Shares under any Exchange Notice have been deposited into the Investor's designated brokerage account, and (ii) the Investor has thereafter received information from its brokerage firm that it may execute trades involving such Exchange Shares.

 

“Control" (including ••controlled By" and "Under Common Control With) - the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or credit arrangement or otherwise.

 

“Current Form 10 Information" - for a given registrant/company, such information as is or may be required by the SEC to satisfy the financial and other disclosure requirements of SEC Form 10 within the meaning of Rule 144.

 

 
 

 

“Current Public Information" - in an appropriate format the information concerning a given issuer specified in paragraphs (a)(S)(i) to (xiv) inclusive, and paragraph (a)(5)(xvi), of Rule l Sc2-l l of the Rules and Regulations promulgated under the Exchange Act.

 

“Debt Securities" - shall have the meaning specified in the second paragraph of the recitals to this Agreement.

 

“Debt Securities Instrument" - shall have the meaning specified in the first paragraph of the recitals to this Agreement.

 

“DTC" - The Depository Trust Company, a subsidiary of DTCC. "DTCC'' -The Depository Trust & Clearing Corporation.

 

"DTC Eligibility" / "DTC Eligible'" - in respect of a given security, its eligibility to be traded electronically in book-entry form through OTC.

 

"DWAC" - DTC's Deposit Withdrawal Agent Commission system.

 

"Exchange Act" - the Securities and Exchange Act of 1934, as amended.

 

"Exchange Amount" - shall have the meaning specified in Section 2.1 of this Agreement.

 

"Exchange Cap" - the maximum number of shares of Issuer Common Stock that Issuer may issue pursuant to this Agreement and the transactions contemplated hereby without (i) breaching Issuer's obligations under the applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Issuer Common Stock may be listed or quoted, or (ii) obtaining stockholder approval under the applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Issuer Common Stock may be listed or quoted.

 

“Exchange Notice" - a written notice to the Investor executed by a duly authorized officer of the Issuer and including an Exchange Request, in each case as the same may be deemed amended in accordance with Section 2.4.3.4.

"Exchange Notice Date" - shall have the meaning specified in Section 2.4.1 of this

 

“Exchange Notice Date/Time Stamp" - shall have the meaning specified in Section 2.4.l of this Agreement.

"Exchange Request" - shall have the meaning specified in Section 2.1 of this Agreement.

 

"Exchange Shares"- shall have the meaning specified in Section 2.1 of this Agreement

 

"Exchange Shares Delivery Period" - in relation to any given Exchange Notice, the period commencing upon the date and time indicated in the Exchange Notice Date/Time Stamp and continuing thereafter for twenty-eight (28) Trading Hours.

 

"FAST Program” - DTC's Fast Automated Securities Transfer program participation in which is a required for OTC Eligibility.

 

"FINRA" - shall mean the Financial Industry Regulatory Authority.

 

"Governmental Authority" means any entity or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to United States federal, state, local, or municipal government, foreign, international, multinational or other government, including any department, commission, board, agency, bureau, subdivision, instrumentality. Official or other regulatory, administrative or judicial authority thereof: and any non-governmental regulatory body to the extent that the rules and regulations or orders of such body have the force of Law.

 

"Gypsy Swap" - any series of transactions in which, by arrangement or otherwise, the resale of an outstanding unrestricted security by the then holder thereof results directly or indirectly, and no matter the sequence of such transactions in a capital infusion into the issuing company.

 

2
 

 

"Investor" - shall have the meaning specified in the preamble to this Agreement.

 

"Investor Holding Period" - shall have the meaning specified in Section 2.1 of this Agreement

 

"Issuer" -shall have the meaning specified in the preamble to this Agreement.

 

"Issuer Common Stock" - shall have the meaning specified in the fourth paragraph of the recitals to this Agreement.

 

"Issuer's Share Delivery Obligation" - shall have the meaning specified in Section

2.4.3.3 of this Agreement.

 

"Knowledge" - of a given Person, and with respect to any fact or matter, the actual knowledge of the directors and executive officers of such Person and each of its Subsidiaries, together with such knowledge that such directors, executive officers and other employees could be expected to discover after due investigation concerning the existence of the fact or matter in question.

 

"Law" means any statute, law (including common law), constitution, treaty, ordinance, code, order, decree, judgment, rule, regulation and any other binding requirement or determination of any Governmental Authority.

 

"Liens" means any liens, claims, charges, security interests, mortgages, pledges, easements, conditional sale or other title retention agreements, defects in title, covenants or other restrictions of any kind, including, any restrictions on the use, voting, transfer or other attributes of ownership.

 

"Material Adverse Effect" - with respect to any Person, any state of facts, development, event, circumstance, condition, occurrence or effect that, individually or taken collectively with all other preceding facts, developments, events, circumstances, conditions, occurrences or effects (a) is materially adverse to the condition (financial or otherwise), business, operations or results of operations of such Person, or (b) impairs the ability of such Person to perform its obligations under this Agreement.

 

"Officer's Certificate" - shall have the meaning specified in Section 2.4.3.2 of this Agreement.

 

"Officer's Certificate Deadline" - shall have the meaning specified in Section 2.4.3.2 of this Agreement.

 

"Officer's Certificate Delivery Obligation" - shall have the meaning specified in Section

2.4.3.2 of this Agreement.

 

"Order" - any award, injunction, judgment, decree, stay, order, ruling, subpoena or verdict, or other decision entered, issued or rendered by any Governmental Authority.

 

"Original Holder" - shall have the meaning specified in the first paragraph of the recitals to this Agreement.

 

"OTC" - over-the-counter.

 

"OTCPink" - the OTCMarkets tier for companies that are not SEC Reporting Companies but that regularly file and make available Current Public Information reports and that are current in such filings as of the date hereof.

 

"OTCQB" - the base level OTCMarkets tier for SEC Reporting Companies.

 

"Ownership Limitation" - at any given point in time, 4.99%.

 

"Parties" - shall have the meaning specified in the preamble to this Agreement.

 

"Person" - an individual, a corporation, a partnership, a limited liability company, a trust, an unincorporated association, Governmental Authority, a person (including, without limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act), or any political subdivision, agency or instrumentality of a Governmental Authority, or any other entity or body.

 

3
 

 

"'Principal Market" - as of any given date, whichever of the New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the American Stock Exchange, the OTCQB, or the OTCPink is at the time the principal trading exchange or market for the Issuer Common Stock.

 

"Proceeding” or “Proceedings" - any actions, suits, claims, hearings, arbitrations, mediations, Proceedings (public or private) or governmental investigations that have been brought by any Governmental Authority or any other Person.

 

"Rule 144"- Rule 144 promulgated under the Securities Act.

 

"Rule 405" - Rule 405 of Regulation S-T.

 

"SEC" - shall mean the U.S. Securities and Exchange Commission.

 

"SEC Reporting Company" - any company with a class of common stock registered under Section 12 of the Exchange Act and that, as of the date hereof is, and for at least the ninety (90) day period immediately preceding the date hereof has been, subject to the periodic and other reporting requirements of either Section 13 or 15(d) of the Exchange Act.

 

"Securities Act" - the Securities Act of 1933, as amended.

 

"Shell Company" - a company having no or nominal operations and either (a) no or nominal assets, (b) assets consisting solely of cash and cash equivalents, or (c) assets consisting of any amount of cash and cash equivalents and nominal other assets.

 

"Trading Day" - any day during which the Principal Market shall be open for business.

 

"Trading Hours" - for any given Trading Day, those hours between 9:30 am (U.S) Eastern Time and 4:30 pm (U.S.) Eastern Time.

 

"Transactions" - shall have the meaning specified in the sixth paragraph of the recitals to this Agreement.

 

"Transfer Agent" - as of any given date, the transfer agent firm engaged by Issuer to perform securities transfer agent and related services for the Issuer and which, as of the date of this Agreement, is Holladay Stock Transfer, 2939 North 67 Place. Scottsdale, Arizona 85251.

 

"Transfer Agent Instruction Letter" - sha11 have the meaning specified in Section 2.4.3.1 of this Agreement.

 

"Transfer Agent Instruction Delivery Deadline" - shall have the meaning specified in Section 2.4.3.l of this Agreement.

 

"Transfer Agent Instruction Delivery Requirement" - shall have the meaning specified in

Section 2.4.3.1 of this Agreement.

 

"Transfer Agent Legal Opinion Letter" - shall have the meaning specified in Section of this Agreement.

 

4
 

 

2. The 3(a)(9) Exchange(s).

 

2.1 Generally. Subject to the terms, conditions and limitations of this Agreement, for so long as any amounts payable under the Debt Securities remain (i) unexchanged for shares of Issuer Common Stock hereunder, or (ii) unpaid and outstanding (such period being deemed the "Investor Holding Period"), the Investor shall have a continuing right in its sole and exclusive discretion, through the delivery by Investor to Issuer of an Exchange Notice, to elect to exchange as part of a 3(a)(9) Exchange (in each instance, an "Exchange Request") all or any part of the amount of any principal and/or accrued but unpaid interest thereon (as set forth within any such Exchange Notice, the "Exchange Amount'') for a number of fully-paid and non-assessable shares of Issuer Common Stock equal to (x) the Exchange Amount divided by (y) the lessor of ( A) $.00001 or (B) Par Value (such result in each instance constituting the "Exchange Shares") provided, however, that any and all obligations under the Debt Securities shall remain unaffected during such Investor Holding Period for all or any part thereof remaining unexchanged, including without limitation any events or other terms of default. In correction with this provision, the Debt Securities Instrument shall be deemed to have been incorporated by reference herein with all rights and obligations attendant thereto and arising thereunder to be continuing unaffected hereby but only insofar as not in conflict at any given time with any superseding provisions of this Agreement.

 

2.2 Certain Acknowledgments and Covenants. Each of Issuer and Investor hereby (a) acknowledge that they are aware and understand that, in order to be eligible for exemption from registration under the Securities Act, any 3(a)(9) Exchange(s) hereunder may not involve (i) any additional consideration beyond the Debt Securities being surrendered/exchanged by the Investor, or (ii) any payment by the Issuer of any commission or other remuneration either directly or indirectly for the solicitation of such exchange(s), and (b) covenant that any 3(a)(9) Exchange(s) hereunder shall not involve (i) any additional consideration beyond the Debt Securities being surrendered/exchanged by the Investor, or (ii) any payment by the Issuer of any commission or other remuneration either directly or indirectly for the solicitation of such exchange(s).

 

2.3                Resale Eligibility of Exchange Shares. Given the issuance date and nature of the Debt Securities, the eligibility for resale exemption from registration of the 144 Debt Conveyance, and the fact that a duly qualified 3(aX9) Exchange does nothing to affect the tradeability status of the securities exchanged, any Exchange Shares, upon issuance, shall be eligible for unrestricted resale under Section 4(1) of the Securities Act.

 

2.4Mechanics and Related Matters.

 

2.4.1           Delivery of Exchange Notice. Any given Exchange Notice shall be deemed to have been delivered to the Issuer as of the date (the "Exchange Notice Date"} and time of dispatch by email to the Issuer as set forth on the email so dispatched, provided, however, that no reasonably compelling basis upon which to challenge such date and time exists and has been provided to Investor (in each case, the "Exchange Notice Date/Time Stamp”).

 

2.4.2           Certain Exchange Notice Limitations. Anything in this Agreement to the contrary notwithstanding, in no event shall any Exchange Notice be deemed valid (i) if and to the extent that fulfillment of the Exchange Request contained therein would cause the aggregate number of shares of Issuer Common Stock beneficially owned by the Investor and its affiliates, including those in relation to which it/they have a right to acquire within sixty (60) days, to exceed the Ownership Limitation, or if at such time the Issuer Common Stock is listed or quoted on The Nasdaq Stock Market or any other U.S. national securities exchange, and to the extent that that fulfillment of the Exchange Request contained therein would cause the aggregate number of shares of Issuer Common Stock issued pursuant to this Agreement, when combined with all shares of Issuer Common Stock issued pursuant to any transactions with which they may be aggregated with other transactions for purposes of and under applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may at such time be listed or quoted, would cause the aggregate number of shares of Issuer Common Stock that would be deemed issued pursuant to this Agreement, to exceed the Exchange Cap. In the event that .any Exchange Notice shall have been delivered by Investor to Issuer but is invalid to any extent in accordance with the foregoing, such Exchange Notice shall be void ab initio but only to the extent of such invalidity.

 

2.4.3           Delivery and Settlement of Exchange Shares.

 

2.4.3.1      Transfer Agent Instruction Requirement. Upon receipt of an Exchange Notice, Issuer shall immediately, but in no event more than two (2) Trading Days (the 'Transfer Agent Instruction Delivery Deadline"), deliver a letter to Transfer Agent, by email as a .pdf attachment and with a cc (courtesy copy) email to investor, such letter to be in the form annexed hereto as Exhibit D and incorporated by reference herein, inclusive of the unanimous written board consent annexed thereto (the ''Transfer Agent Instruction Letter"), in each case filled in as appropriate based on the information set forth in the corresponding Exchange Notice, or deemed set forth in the corresponding Exchange Notice in accordance with Section 2.4.3.4 below (the ''Transfer Agent Instruction Delivery Requirement").

 

2.4.3.2      Officer's Certificates. In connection with the delivery of any Exchange Shares, the cost of obtaining any format written legal opinion reasonably requested by Transfer Agent, including any one or more concluding that such Exchange Shares be delivered free of any restrictive legend (each, a "Transfer Agent Legal Opinion Letter"), shall be borne by Investor, and it shall be within the exclusive discretion of Investor as to what legal firm shall be engaged for this purpose. Promptly upon delivery via email by Investor's designated counsel to the president and chief executive officer of Issuer at the email address provided in Section 5 of this Agreement (but in no event more than two [2] Trading Days) (the "Officer's Certificate Deadline") of any officer's certificates identified in such email as being required by Investor's designated counsel for purposes of Investor's designated counsel being able to deliver the Transfer Agent Legal Opinion Letter (each, an "Officer's Certificate"), the president and chief executive officer of Issuer shall duly execute and return to Investor's designated counsel, in .pelf format at the email address from which the corresponding unexecuted Officer's Certificate(s) had been received, such duly executed Officer's Certificate (the "Officer's Certificate Delivery Obligation''). In the event the Officer's Certificate Deadline is exceeded by the Issuer, the Issuer shall pay to the Investor $2,000 in cash per day that the Officer's Certificate is exceeded.

 

5
 

 

2.4.3.3      Share Delivery Obligation. Subject only to the limitations set forth in Section 2.4.2 above and any delays in delivery to Transfer Agent of the Transfer Agent Legal Opinion Letter, and within the applicable Exchange Share Delivery Period, Issuer shall be obligated to and shall take any and all steps required to either (a) if Transfer Agent is not participating in the DTC FAST Program during the applicable Exchange Share Delivery Period, and/or the Exchange Shares are not DTC Eligible, deliver for settlement to the window of Investor's brokerage account (as designated in the Transfer Agent Instruction Letter) physical certificates representing the Exchange Shares deliverable pursuant to the corresponding Exchange Request, or (b) if Transfer Agent is participating in the OTC FAST Program during the applicable Exchange Share Delivery Period, and/or the Exchange Shares are OTC Eligible, cause such transfer agent to effectuate delivery and settlement of such Exchange Shares electronically, in book-entry form, by appropriately crediting the account of the Investor's prime broker (as designated in the Transfer Agent Instruction Letter) with DTC through its DWAC System and providing proof satisfactory to the Investor thereof (in relation to any given Exchange Request, the “Issuer's Share Delivery Obligation").

 

3.                Representations and Warranties of Issuer. Issuer hereby represents and warrants to Investor, which representations and warranties, excepting (c) below, sbal1 be deemed to be repeated by Issuer on each day on which any amounts payable under the Debt Securities, including interest, remain (i) unexchanged for shares of Issuer Common Stock hereunder, or (ii) unpaid and outstanding, that

 

(a)                 it is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Nevada;

 

(b)                 it has taken all requisite corporate and other action to authorize. and it bas full corporate power and authority without any required further action. to (i) carry on its present business as currently conducted, (ii) own its properties and assets, (iii) execute, deliver, and perform all of its obligations under this Agreement, (iv) have borrowed and to repay with interest the indebtedness evidenced by the Debt Securities, and (v) issue and deliver to Investor or its designee any and all Exchange Shares potentially deliverable pursuant to this Agreement;

 

(c)                 its capitalization as of the date of this Agreement includes (i) ______________ (____) shares of Issuer Common Stock authorized, of which ________________(______________) shares are issued and outstanding, and (ii) _________________ (_________________) shares of Issuer preferred stock, par value $0.001 per share authorized, of [Series A,B. C, D] are issued and outstanding, and _____________ (_____) notes/debentures in the combined amount of ______________dollars ($________________________) that, in accordance with their terms, are "convertible" into capital stock of Issuer, issued and outstanding;

 

(d)                 the Debt Securities constitute a legal, valid and binding, and past due obligation of Issuer, enforceable against Issuer in accordance with the terms thereof, subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar Laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law), there is no dispute relating to the validity of such obligation, and any defenses to its validity have been waived in their entirety;

 

(e)                 the execution, delivery and performance of this Agreement, the payment of all amounts due under the Debt Securities by Issuer, and the consummation of the Transactions. do not and will not (i) violate any provision of its articles of incorporation or bylaws, (ii) conflict with or result in the breach of any material provision of, or give rise to a default under, any agreement with respect to indebtedness or of any other material agreement to which Issuer is a party or by which it or any of its properties or assets are bound, (iii) conflict with any Law, statute, rule or regulation or any Order, judgment or ruling of any court or other agency of government to which it is subject or any of its properties or assets may be bound or affected, in each case except where such conflict would not have a Material Adverse Effect on Issuer, or (iv) result in the creation or imposition of any Lien, charge, mortgage, encumbrance or other security interest or any segregation of assets or revenues or other preferential arrangement (whether or not constituting a security interest) with respect to any present or future assets revenues or rights to the receipt of income of issuer;

 

(f)                  it is currently an SEC Reporting Company.

 

(g)                 it is not a Shell Company, and, if it ever was a Shell Company, it (i) has ceased to be a Shell Company; (ii) has filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the twelve (12) month period immediately preceding the date of this Agreement (or for such shorter period as it has been required to file such reports and materials), other than current reports on Form 8-K. and (iii} has filed Current Form 10 Information with the SEC reflecting its status as an entity that is no longer a Shell Company, and at least one (1) year has elapsed since such Current Form 10 Information was filed;

 

(h)                 the Issuer Common Stock currently trades publicly on the OTCQB market on under the symbol "NYXO" and is not currently subject to any trading halts, suspensions, delistings or similar actions imposed by the SEC, FINRA, or any other regulatory or similar authorities and no members of its management or board of directors is aware or has any reason to be aware of any such threatened halts, suspensions, delistings or similar actions;

 

(i)                   the Issuer Common Stock is currently DTC Eligible, Transfer Agent is participating in the DTC FAST Program, and no DTC "chill" has been imposed upon the Issuer Common Stock;

 

6
 

 

(j)                  its management understands what a Gypsy Swap is and that such arrangements are deemed to constitute unlawful schemes to evade the registration requirements of the Securities Act, and has no knowledge of any such arrangements in connection with the Transactions;

 

(k)                 there are no legal actions, suits, arbitration proceedings, investigations or other Proceedings pending or, to the reasonable knowledge of Issuer's officers or directors threatened against Issuer which, if resolved unfavorably would have a Material Adverse Effect on the financial condition of Issuer or the validity or enforceability of, or Issuer's ability to perform its obligations under. the Debt Securities and/or this Agreement; and

 

(l)                   all governmental and other consents, authorizations, approvals, licenses and orders that were required to have been obtained by Issuer with respect to the Debt Securities and/or its issuance were duly obtained and remain in full force and effect and all conditions of any such consents, Authorizations, approvals, licenses and orders have been complied with.

 

4.                   Covenants of Issuer. In addition to the other obligations hereunder and under the Debt Securities, and for so long as any amounts payable under the Debt Securities, including interest, remain (i) unexchanged for shares of Issuer Common Stock hereunder, or (ii) unpaid and outstanding, Issuer hereby covenants to the Investor as follows:

 

(a)                 upon issuance, any Exchange Shares shall be duly authorized, fully paid and nonassessable:

 

(b)                 it shall refrain from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing, any material non-public information to Investor without also disseminating such information to the public in accordance with applicable Law, unless prior to disclosure of such information Issuer identifies such information as being material non-public information And provides Investor with the opportunity to accept or refuse to accept such material non-public information for review;

 

(c)                 it shall timely file all reports required by it to be filed, in each case in full compliance with the content requirements thereof, and shall meet all other of its obligations under the Exchange Act;

 

(d)                 it shall take any and all steps as may be necessary to insure that the Issuer Common Stock continues to trade publicly and does not become the subject of any trading halts, suspensions, delistings or similar actions imposed by the SEC, FINRA, or any other regulatory or similar authorities;

 

(e)                 it shall take any and all steps as may be necessary to insure that the Issuer Conunon Stock continues to be DTC Eligible, that Transfer Agent continue to participate in the DTC FAST Program, and that no OTC "chill" is imposed upon the Issuer Common Stock;

 

(f)                  it shall take any and all steps as may be necessary to insure that it avoid becoming or otherwise being deemed by the SEC a Shell Company;

 

(g)                 it shall not issue any shares of Issuer Common Stock under this Agreement which, when aggregated with all other shares of Issuer Common Stock then beneficially owned by Investor and its affiliates, including those in relation to which it/they have a right to acquire within sixty (60) days. would result in the beneficial ownership by Investor and its affiliates to exceed the Ownership Limitation, and, upon the written or telephonic request of Investor from time t-0 time, Issuer shall confirm to Investor within one (1) Trading Day of such request the number of shares of Issuer Common Stock then outstanding;

 

(h)                 it shall not initiate or otherwise execute any share buybacks of the Issuer Common Stock that would have the effect of increasing Investor's percentage beneficial ownership together with its affiliates, including those in relation to which it/they have a right to acquire within sixty (60) days, to exceed the Ownership Limitation;

 

(i)                   if the Common Stock is listed or quoted on The Nasdaq Stock Market or any other U.S. national securities exchange during the Investor Holding Period, it shall not issue any shares of Issuer Common Stock pursuant to this Agreement to the extent that after giving effect thereto, the aggregate number of all shares of Issuer Common Stock that would be issued pursuant to this Agreement, together with all shares of Issuer Common Stock issued pursuant to any transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Issuer Common Stock may be listed or quoted, would exceed the Exchange Cap, unless and until Issuer elects to solicit stockholder approval of the transactions contemplated by this Agreement and the stockholders of Issuer have in fact so approved the transactions contemplated by this Agreement in accordance with the applicable rules and regulations of The Nasdaq Stock Market, any other Principal Market on which the Issuer Common Stock may be listed or quoted, and the Issuer's articles of incorporation and bylaws; and

 

(j)                  it shall not knowingly be a participant in any Gypsy Swap in connection with the Transactions or otherwise.

 

7
 

 

5.                   Notices. Except as otherwise expressly set forth herein, any notice, demand or request relating to any matter set forth herein shall be made in writing and shall be deemed effective when hand delivered or when mailed, postage pre-paid by registered or certified mail return receipt requested, when picked-up by or delivered to a recognized overnight courier service, or when sent by email to either Issuer at its address below, or to Investor at its address below, or such other address as either Party shall have notified the other in writing as provided herein from and after the date hereof.

 

If to Issuer:

 

Nyxio Technologies Corp.

1330 S.W. 3rd Ave.

Portland, OR 97201

Att: Giorgio Johnson

 

If to Investor:

 

Beaufort Capital Partners LLC

660 White Plains Road, Suite 455

Tanytown. NY 10591

Att: Leib Schaeffer

 

6.                   Governing Law. This Agreement and the Exhibits hereto shall be governed by and interpreted and enforced in accordance with the Laws of the State of New York, without giving effect to any choice of Law or conflict of Laws rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of New York.

 

7.                   Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

8.                   Counterparts. This Agreement may be executed and delivered (including by facsimile or email .pdf file format attachment transmission) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

 

9.                   Integration; Modification. This Agreement, including the Exhibits hereto, constitutes the entirety of the rights and obligations of each of the Investor and Issuer with respect to the subject matter hereof. No provision of this Agreement may be modified except by an instrument in writing signed by the Party against whom the enforcement of any such modification is or may be sought.

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

 

8
 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by the respective officers thereunto duly authorized, in each case as of the date first written above.

 

"ISSUER"

 

NYXIO TECHNOLOGIES CORP.

 

By: /s/ Giorgio Johnson

Name: Giorgio Johnson

Title: Chief Executive Officer

 

 

"INVESTOR"

 

BEAUFORT CAPITAL PARTNERS LLC

 

 

By: /s/ Leib Schaeffer

Leib Schaeffer

Title: Managing Member

 

9
 



CERTIFICATIONS

 

I, Giorgio Johnson, certify that;

 

1.   I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2014 of Nyxio Technologies Corp. (the “registrant”);

 

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 19, 2014

 

/s/ Giorgio Johnson

By: Giorgio Johnson

Title: Chief Executive Officer



CERTIFICATIONS

 

I, Mark Gustavson, certify that;

 

1.   I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2014 of Nyxio Technologies Corp. (the “registrant”);

 

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 19, 2014

 

/s/ Mark Gustavson

By: Mark Gustavson

Title: Chief Financial Officer



CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly Report of Nyxio Technologies Corp. (the “Company”) on Form 10-Q for the quarter ended September 30, 2014 filed with the Securities and Exchange Commission (the “Report”), I, Giorgio Johnson, Chief Executive Officer of the Company, and I, Mark Gustavson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1.The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

 

2.The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.

 

By: /s/ Giorgio Johnson
Name: Giorgio Johnson
Title: Principal Executive Officer, Principal Financial Officer and Director
Date: November 19, 2014

By: /s/ Mark Gustavson
Name: Mark Gustavson
Title: Principal Financial Officer
Date: November 19, 2014

 

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Nyxio Technologies (CE) (USOTC:NYXO)
Historical Stock Chart
Von Nov 2024 bis Dez 2024 Click Here for more Nyxio Technologies (CE) Charts.
Nyxio Technologies (CE) (USOTC:NYXO)
Historical Stock Chart
Von Dez 2023 bis Dez 2024 Click Here for more Nyxio Technologies (CE) Charts.