Exhibit 99.1
NOTICE OF DEFAULT AND
NOTICEOFSALE OF COLLATERAL
Reference is made totheSenior Secured Redeemable Convertible Debenture (the “Debenture”) issued by Gopher Protocol Inc., aNevada corporation (the “Company” or “Corporation”) to DiscoverGrowthFund, LLC, a U.S. Virgin Islandslimited liability company (the “Investor” or “Holder”) on December 3, 2018, pursuant to the Securities Purchase Agreement of even date therewith (the “Agreement”).
Pursuant to Section V.Gofthe Agreement, “G. Events of Default. Company shall, at Investor’s option, bein default under this Agreement upon the happening of any of the following events or conditions (each, an ‘Event ofDefault’):… (b)the failure by Company
to perform any of its other obligations undertheDebenture, this Agreement or any Transaction Document within 10 business daysof notice from Investor ofthe same; …or (g) the occurrence of any 3or more Trigger Events under theDebenture.”
Pursuant to Section V.G(g) of the Agreement, Investor hereby declares Company in default under the Agreementdueto the occurrence of any 3ormoreTrigger Events under the Debenture. At least thefollowing Trigger Events are known to have occurred to date:
1. Company replaced Empire Stock Transfer Inc. as Company’s transferagentbefore areputable registered transfer agent agreed in writing to serve as Company’s transfer agent and to be bound byall terms and conditions ofthe Transfer Agent Instructions. Debenture §I.H.1.c, Transfer AgentInstructions, p. 2.
2. Company failed to engageasuitable replacement reputable registered transfer agent that agreed to serve as transfer agent for Company and be bound by the terms andconditions ofthe Transfer Agent Instructionsas soonas practicable and in any event within 2Trading Days. Debenture §I.H.1.c, Transfer Agent Instructions, p. 2.
3. On May 20, 2019, Companymadean objection and instructionto its transferagent, West Coast Stock Transfer Inc., notto comply with the Delivery Notice fromInvestor dated May 17, 2019. Debenture §I.H.1.i.
4. Effective May 22, 2019, Company’s Common Stock isnotdesignated fortrading on theOTCQBor ahigher stockmarket.Debenture§I.H.1.p, §I.G.6.c(ii).
5. OnMay24, 2019,Company issued a pressrelease relating to and referencing Investor, theDebenture and the transactions contemplated thereby, without providing it to Investor for review and approval prior to issuing. Debenture §I.H.d, Agreement §IV.D.
6. On May 24, 2019, Company filedacurrent report on Form 8-Krelating to and referencing Investor, the Debenture and the transactions contemplated thereby, without providing itto Investor forreviewandapproval prior tofiling. Debenture§I.H.d,
Agreement§IV.D.
7. On May 27, 2019, Company advised Investor’s brokers thataregistration statement is not effective and available for the resale of all Conversion Shares. Debenture § I.H.1.g.
8. On May 27, 2019, Company advised Investor’s brokers thataregistration statement is not effective and available for the resale of all Conversion Shares, and an exemption is not available for theresale of all theConversion Shares without restriction. Debenture §I.H.1.p, §I.G.6.c(iv).
9. Company states thatitpermitted its transfer agentto issue shares of CommonStock to Holder which, when aggregated with all other shares of Common Stock then deemed beneficially owned by Holder, would result in Holder owning more than 4.99%of all Common Stock outstanding immediately after giving effect to such issuance. Debenture §I.H.1.c, §I.G.7.
In addition, Pursuant to Section V.G(b) of the Agreement, Investor hereby gives notice ofthefailure by Company to perform its obligations under the Debenture and the Agreement by reasonofeach ofthe foregoing.
Pursuant to Section V.Hofthe Agreement, “H. Remedies. Upon theoccurrence ofany Event ofDefault and at any time thereafter, Investormaydeclare all Obligations secured hereby immediately due and payable and shall have, in addition to any remedies provided herein or by any applicable law or in equity, all theremediesof asecured party under the UCC. …”
Pursuant toSection V.H ofthe Agreement, Investor herebydeclaresall Obligations secured by the Agreement immediately due and payable.
Pursuant toSection V.H ofthe Agreement, Investor herebyprovides Company with notice of Investor’s public sale and disposition of all of theCollateral at 10:00 amEasterntimeon Monday, June 24, 2019 at 5330 Yacht Haven Grande, Suite 206, St. Thomas VI00802. Pursuant to Section V.H(d) of the Agreement, Company is hereby required to assemble the Collateral and make itavailable to Investor atsuch place prior to suchtime.
The foregoing is without waiver of any of Investor’s right or remedies, including, butnotlimited to, the rightto damages forCompany’s multiple unexcused material breaches of the Agreement, Debenture and Transaction Documents.
All of the foregoing are without waiver of any rights or remedies of Investor, all of which are expressly reserved.
Dated: May 28, 2019 DISCOVER GROWTH FUND, LLC
By:
John Kirkland
President of G.P. of Member
