EXHIBIT 10.3

 

Warrant

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
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 AND REASONABLY
APPROVED BY THE COMPANY), 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.

 

COMMON STOCK PURCHASE WARRANT

 

Number of shares: 5,000,000

Holder: Greentree Financial Group, Inc.

  

Exercise Price per Share: $0.03

Warrant No. 2016-001

  

Expiration Date: November 15, 2019

Issue Date: November 15, 2016

 

FOR VALUE RECEIVED, APPYEA, Inc., a South Dakota corporation (the “Company”),
hereby certifies that Greentree Financial Group, Inc., or its designated assigns
(the “Warrant Holder”), is entitled to purchase the securities set forth below.

 

This Warrant entitles the Warrant Holder to purchase from the Company at any
time after the Issue Date and before the Expiration Date, Five million
(5,000,000) shares (the “Warrant Shares”) of common stock (the “Common Stock”)
of the Company at an exercise price of $0.03 per share (as adjusted from time to
time as provided in Section 7 hereof, the “Exercise Price”), at any time and
from time to time from and after the Issue Date and through and including 5:00
p.m. New York time on the Expiration Date.

 

This Warrant is being issued pursuant to that certain Loan Agreement, dated as
of November 15, 2016 by and between the Company and the Warrant Holder, (the
“Loan Agreement”). Capitalized terms used herein but not otherwise defined
herein, shall have the meanings given to them in the Loan Agreement.

 

This Warrant is subject to the following terms and conditions:

 

1. Registration of Warrant. The Company shall register this Warrant upon records
to be maintained by the Company for that purpose (the “Warrant Register”), in
the name of the record Warrant Holder hereof from time to time. The Company may
deem and treat the registered Warrant Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Warrant Holder, and for all other purposes, unless provided notice to the
contrary in accordance herewith.

 

2. Investment Representation. The Warrant Holder by accepting this Warrant
represents that the Warrant Holder is acquiring this Warrant for its own account
or the account of an affiliate for investment purposes and not with the view to
any offering or distribution and that the Warrant Holder will not sell or
otherwise dispose of this Warrant or the underlying Warrant Shares in violation
of applicable securities laws. The Warrant Holder acknowledges that the
certificates representing any Warrant Shares will bear a legend indicating that
they have not been registered under the United States Securities Act of 1933, as
amended (the “1933 Act”) and may not be sold by the Warrant Holder except
pursuant to an effective registration statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws. If this Warrant was acquired by the Warrant Holder
pursuant to the exemption from the registration requirements of the 1933 Act
afforded by Regulation S thereunder, the Warrant Holder acknowledges and
covenants that this Warrant may not be exercised by or on behalf of a Person
during the one year distribution compliance period (as defined in Regulation S)
following the date hereof. “Person” means an individual, partnership, firm,
limited liability company, trust, joint venture, association, corporation, or
any other legal entity.

 

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3. Validity of Warrant and Issue of Shares. The Company represents and warrants
that this Warrant has been duly authorized and validly issued and warrants and
agrees that all of Warrant Shares that may be issued upon the due exercise of
the rights represented by this Warrant will, when issued upon such exercise, be
duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof. The Company further
warrants and agrees that during the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have authorized
and reserved a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant.

 

4. Registration of Transfers and Exchange of Warrants.

 

a. Subject to compliance with the legend set forth on the face of this Warrant,
the Company shall register the transfer of this Warrant, or any portion of this
Warrant, in the Warrant Register, upon delivery by the Warrant Holder to the
Company, pursuant to Section 10 of (i) this Warrant, and (ii) a duly completed
and executed written assignment. Upon any such registration or transfer, a new
warrant to purchase Common Stock, in substantially the form of this Warrant (any
such new warrant, a “New Warrant”), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall be issued to
the transferring Warrant Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance of such transferee of all of
the rights and obligations of a Warrant Holder of a Warrant.

 

b. This Warrant is exchangeable, upon the surrender hereof by the Warrant Holder
to the office of the Company specified in or pursuant to Section 10 for one or
more New Warrants, evidencing in the aggregate the right to purchase the number
of Warrant Shares which may then be purchased hereunder. Any such New Warrant
will be dated the date of such exchange, and will have the same Expiration Date
as the original Warrant for which the New Warrant was exchanged.

 

5. Exercise of Warrants.

 

a. Exercise of this Warrant shall be made upon delivery to the Company pursuant
to Section 10, of (i) this Warrant; (ii) a duly completed and executed election
notice, in the form attached hereto (the “Election Notice”) and (iii) payment of
the Exercise Price. Payment of the Exercise Price may be made at the option of
the Warrant Holder either (a) in cash, wire transfer or by certified or official
bank check payable to the order of the Company equal to Exercise Price per share
in effect at the time of exercise multiplied by the number of Warrant Shares
specified in the Election Notice, or (b) through a cashless exercise provided in
Section 5(b) below. The Company shall promptly (but in no event later than three
(3) business days after the “Date of Exercise,” as defined herein) issue or
cause to be issued and cause to be delivered to the Warrant Holder in such name
or names as the Warrant Holder may designate in the Election Notice, a
certificate for the Warrant Shares issuable upon such exercise, with such
restrictive legend as required by the 1933 Act, as applicable. Any person so
designated by the Warrant Holder to receive Warrant Shares shall be deemed to
have become holder of record of such Warrant Shares as of the Date of Exercise
of this Warrant. All Warrant Shares delivered to the Warrant Holder the Company
covenants, shall upon due exercise of this Warrant, be duly authorized, validly
issued, fully paid and non-assessable.

 

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b. If the closing price per share of the Common Stock (as quoted by the OTC
Markets or other principal trading market, if applicable) reported on the day
immediately preceding the Date of Exercise (the “Fair Market Value”) of one
share of Common Stock is greater than the Exercise Price of one Warrant Share
(at the date of calculation as set forth below), in lieu of exercising this
Warrant for cash, the Warrant Holder may elect to receive that number of Warrant
Shares computed using the following formula:

 

X=Y (A-B)

A

 

Where X= the number of shares of Common Stock to be issued to the Warrant Holder

 

Y= the number of shares of Warrant Shares purchasable under this Warrant or, if
only a portion of this Warrant is being exercised, the portion of this Warrant
being exercised (at the date of such calculation)

 

A= Fair Market Value

 

B= Exercise Price (as adjusted to the date of such calculation)

 

For purposes of Rule 144 promulgated under the 1933 Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction in the manner described above shall be deemed to have been
acquired by the Warrant Holder, and the holding period for the Warrant Shares
shall be deemed to have commenced, on the date this Warrant was originally
issued.

 

c. A “Date of Exercise” means the date on which the Company shall have received
(i) this Warrant (or any New Warrant, as applicable), (ii) the Election Notice
(or attached to such New Warrant) appropriately completed and duly signed, and
(iii) payment of the Exercise Price (if this Warrant is exercised on a cash
basis) for the number of Warrant Shares so indicated by the Warrant Holder to be
purchased.

 

d. This Warrant shall be exercisable at any time and from time to time for such
number of Warrant Shares as is indicated in the attached Form of Election to
Purchase. If less than all of the Warrant Shares which may be purchased under
this Warrant are exercised at any time, the Company shall issue or cause to be
issued, at its expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares for which no exercise has been evidenced by
this Warrant.

 

e. Notwithstanding any other provision of this Warrant, the Warrant Holder may
not exercise this Warrant if such exercise would cause Warrant Holder’s
beneficial ownership (as defined by Section 13(d) of the Securities Exchange Act
of 1934, as amended) of the Common Stock of the Company to exceed 4.9% of its
total issued and outstanding Common Stock or voting shares. Upon not less than
sixty-one (61) days advance written notice, at any time or from time to time,
the Warrant Holder at its sole discretion, may waive this provision of this
Warrant.

 

6. Common Share Issuance. Upon receipt by the Company of a written request from
Warrant Holder to exercise any portion of any Warrant, subject to any
limitations on exercise contained in any Warrant, the Company shall have three
(3) business days (“Delivery Date”) to request issuance of the shares of Common
Stock rightfully listed in such request. If the Company fails to timely deliver
the shares through willful failure or deliberate hindrance, the Company shall
pay to Warrant Holder in immediately available funds $1,000 per day past the
Delivery Date that the shares are actually issued. Any amounts due under this
Section shall be paid by the fifth (5th) day of the month following the month in
which they accrued. The Company agrees that the right to exercise its Warrants
is a valuable right to Warrant Holder and a material consideration of it
entering this Agreement. The parties agree that it would be impracticable and
extremely difficult to ascertain the amount of actual damages caused by a
failure of the Company to timely deliver shares as required hereby. Therefore,
the parties agree that the foregoing liquidated damages provision represents
reasonable compensation for the loss which would be incurred by the Warrant
Holder due to any such breach. The parties agree that this Section is not
intended to in any way limit Warrant Holder’s right to pursue other remedies,
including actual damages and/or equitable relief.

 

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7. Adjustment of Exercise Price and Number of Shares. The character of the
shares of stock or other securities at the time issuable upon exercise of this
Warrant and the Exercise Price therefor, are subject to adjustment upon the
occurrence of the following events:

 

a. Adjustment for Reorganization, Consolidation, Merger, Etc. In case of any
consolidation or merger of the Company with or into any other corporation,
entity or person, or any other corporate reorganization, in which the Company
shall not be the continuing or surviving entity of such consolidation, merger or
reorganization (any such transaction being hereinafter referred to as a
“Reorganization”), then, in each case, the Holder of this Warrant, on exercise
hereof at any time after the consummation or effective date of such
Reorganization (the “Effective Date”), shall receive, in lieu of the shares of
stock or other securities at any time issuable upon the exercise of the Warrant
issuable on such exercise prior to the Effective Date, the stock and other
securities and property (including cash) to which such Holder would have been
entitled upon the Effective Date if such holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided in this
Warrant). The Company shall ensure that the surviving entity in any
Reorganization specifically assumes the Company’s obligations under this
Warrant.

 

b. Adjustments for Stock Dividends; Combinations, Etc. In case the Company shall
do any of the following (an “Event”):

 

(i) declare a dividend or other distribution on its Common Stock payable in
Common Stock of the Company,

 

(ii) subdivide the outstanding Common Stock pursuant to a stock split or
otherwise, or

 

(iii) reclassify its Common Stock, then the number of shares of Common Stock or
other securities at the time issuable upon exercise of this Warrant shall be
appropriately adjusted to reflect any such Event; however, there shall be no
adjustment to the Exercise Price or issuable Warrant Shares in the event of a
reverse stock split or other reduction in the authorized Common Stock of the
Company.

 

c. Certificate as to Adjustments. In case of any adjustment or readjustment in
the price or kind of securities issuable on the exercise of this Warrant, the
Company will promptly give written notice thereof to the holder of this Warrant
in the form of a certificate, certified and confirmed by the Board of Directors
of the Company, setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.

 

8. Registration Rights. If, after the date hereof, the Company shall prepare and
file with the United States Securities and Exchange Commission (the
“Commission”) a registration statement relating to an offering for its own
account or the account of others under the 1933 Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
1933 Act) or their then equivalents relating to equity securities to be issued
solely in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, then the Company shall send to the Warrant Holder written notice of such
determination and, unless the Warrant Holder objects to the registration of the
Warrant Shares or any part thereof in writing within ten (10) calendar days
after receipt of such notice, the Company shall include in such registration
statement all of the Warrant Shares, subject to customary cutbacks applicable to
all holders of registration rights. To the extent not all of the Warrant Shares
may be included for registration in the registration statement, as a result of
the Commission’s application of Rule 415 under the 1933 Act, priority in such
registration statement will be given to the other Common Stock included therein
in preference to the Warrant Shares except no preference shall be given to
shares held by affiliates. The obligations of the Company under this Section may
be waived by the Warrant Holder. Notwithstanding anything to the contrary
herein, the registration rights granted to the Warrant Holder shall not be
applicable for such times as such Warrant Shares may be sold by the Holder
thereof without restriction pursuant to Rule 144 of the 1933 Act.

 

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9. Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. The number of
full Warrant Shares that shall be issuable upon the exercise of this Warrant
shall be computed on the basis of the aggregate number of Warrants Shares
purchasable on exercise of this Warrant so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 8, be issuable on
the exercise of this Warrant, the Company shall, at its option, (i) pay an
amount in cash equal to the Exercise Price multiplied by such fraction or (ii)
round the number of Warrant Shares issuable, up to the next whole number.

 

10. Notice. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given (i) on the date they are (a) delivered if
delivered in person or (b) sent, if sent by email; (ii) on the date initially
received if delivered by facsimile transmission followed by registered or
certified mail confirmation; (iii) on the date delivered by an overnight courier
service; or (iv) on the third business day after it is mailed by registered or
certified mail, return receipt requested with postage and other fees prepaid as
follows:

 

If to the Company:

APPYEA, Inc.

777 Main Street, Suite 600

Forth Worth, TX 76102

Email Address:

Attn: Douglas O. McKinnon

 

If to the Warrant Holder:

Greentree Financial Group, Inc.

7951 S.W. 6th Street, Suite 216

Plantation, Florida 33324

Email Address: chriscottone@gtfinancial.com

Attn: R. Chris Cottone

 

11. Miscellaneous.

 

a. This Warrants is being granted pursuant to the terms of that certain Loan
Agreement, dated as of November 15, 2016 by and between the Company and the
Warrant Holder (the “Loan Agreement”). If not otherwise defined herein, all
capitalized terms herein shall have the meanings given to them in the Loan
Agreement. Further, all of the terms, representations, warranties, agreements,
covenants and conditions set forth in the Loan Agreement are incorporated herein
by reference. To the extent that there is a conflict between any condition, term
or provision of this Warrant and the Loan Agreement, the conditions, terms, and
provisions set forth herein shall specifically supersede the conflicting
conditions, provisions and/or terms in the Loan Agreement.

 

b. This Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Warrant may
be amended only in writing and signed by the Company and the Warrant Holder.
Warrant Holder may assign this Warrant without consent from the Company but in
accordance with the restrictions herein.

 

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c. Nothing in this Warrant shall be construed to give to any person or
corporation other than the Company and the Warrant Holder any legal or equitable
right, remedy or cause of action under this Warrant; this Warrant shall be for
the sole and exclusive benefit of the Company and the Warrant Holder.

 

d. This Warrant shall be governed by and construed in accordance with the laws
of the State of Florida, without regard to conflict of laws provisions. All
disputes arising out of or in connection with this Warrant, or in respect of any
legal relationship associated with or derived from this Warrant, shall only be
heard in any competent court residing in Broward County Florida. Company agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any manner
provided by law. The Company further waives any objection to venue in any such
action or proceeding on the basis of inconvenient forum. The Company agrees that
any action on or proceeding brought against the Warrant Holder shall only be
brought in such courts.

e. The headings herein are for convenience only, do not constitute a part of
this Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

 

f. In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonably
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

 

g. The Warrant Holder shall not, by virtue hereof, be entitled to any voting or
other rights of a shareholder of the Company, either at law or equity, and the
rights of the Warrant Holder are limited to those expressed in this Warrant.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
the authorized officer as of the date first above stated.

 

 APPYEA, Inc.      By:/s/ Douglas O. McKinnon

 

Name:

Douglas O. McKinnon  Title:Chief Executive Officer 

 

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FORM OF ELECTION TO PURCHASE

 

(To be executed by the Warrant Holder to exercise the right to purchase shares
of Common Stock under the foregoing Warrant)

 

To: APPYEA, Inc.

 

The undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby irrevocably elects to purchase (check applicable box):

 

¨________ shares of the Common Stock covered by such Warrant; or

 

 

¨the maximum number of shares of Common Stock covered by such Warrant pursuant
to the cashless exercise procedure set forth therein.

 

 

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):

 

 

¨$__________ in lawful money of the United States; and/or

 

 

¨the cancellation of such portion of the attached Warrant as is exercisable for
a total of _______ shares of Common Stock (using a Fair Market Value of $_______
per share for purposes of this calculation); and/or

 

 

¨the cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 5 of the Warrant, to exercise
this Warrant with respect to the maximum number of shares of Common Stock
purchasable pursuant to the cashless exercise procedure set forth in Section 5.

 

After application of the cashless exercise feature as described above,
_____________ shares of Common Stock are required to be delivered pursuant to
the instructions below.

 

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the “Securities Act”), or pursuant to an exemption from
registration under the Securities Act.

 

Name of Warrant Holder:

 

 

 

(Print)

 

 

  

 

 

 

(By:)

 

 

  

 

 

 

(Name:)

 

 

  

 

 

 

(Title:)

 

  

 

 

 

Signatures must conform in all respects to the name of the Warrant Holder on the
face of the Warrant.

 

 

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