Material Agreement Form 8 K

Item 1.01 Entry into a Material Definitive Agreement.

On September 18, 2024, NovAccess Global Inc. ("we," "NovAccess" or the "company") entered into a securities purchase agreement (the "SPA") with AJB Capital Investments, LLC ("AJB") and issued a promissory note in the principal amount of $65,000 (the "note") to AJB pursuant to the SPA. NovAccess will use the loan proceeds for the repayment of debt, operations, and to pay expenses related to filing the company's June 30, 2024 Quarterly Report on Form 10-Q. We expect to file the June 10-Q in October.

The AJB note has an original issuance discount of 10% of the principal, bears interest at 12% a year, and is due on March 18, 2025. We must repay the note with the proceeds of an offering in connection with uplisting to a national securities exchange exceeding $5.0 million and may otherwise prepay the note at any time without penalty. Under the terms of the note, we may not sell a significant portion of our assets without the approval of AJB, may not issue additional debt that is not subordinate to AJB, must comply with the company's reporting requirements under the Securities Exchange Act of 1934, and must maintain the listing of the company's common stock on the OTC Market or other exchange, among other restrictions and requirements. Our failure to make required payments under the note or to comply with any of these covenants, among other matters, would constitute an event of default. Upon an event of default under the SPA or note, the note will bear interest at 18%, AJB may immediately accelerate the note due date, AJB may convert the amount outstanding under the note into shares of NovAccess common stock at a discount to the market price of the stock, and AJB will be entitled to its costs of collection, among other penalties and remedies. In addition, depending on the nature of the default, all amounts outstanding under the note will be multiplied by two as a default penalty.

In connection with the loan, we issued a seven-year prefunded stock purchase warrants to AJB to purchase a total of two million shares of our common stock for $0.0001 a share (the "warrant").

We provided customary representations and covenants to AJB in the SPA. The company's breach of any representation or failure to comply with the covenants would constitute an event of default. We also entered into a fourth amendment to the February 15, 2022 security agreement with AJB (as amended, the "security agreement") pursuant to which we granted to AJB a security interest in all of the company's assets, including the equity of StemVax, LLC, securing the company's obligations under the SPA and note. In addition, we entered into a registration rights agreement with AJB (the "registration agreement") pursuant to which we agreed to file with the Securities and Exchange Commission a Form S-1 by December 17, 2024 to register for resale the shares issuable upon conversion of the note and exercise of the warrants.

The SPA, note, warrant, security agreement and registration agreement are filed as exhibits to this Current Report on Form 8-K. The descriptions above are qualified in their entirety by reference to the full text of these documents.

On August 16, 2024, AJB loaned the company $33,340 on similar terms to the September 18 loan described above. In connection with the August 16 loan, we issued one million shares of our common stock to AJB as a commitment fee (the "commitment fee shares")