0001683168-17-002117.txt : 20170814 0001683168-17-002117.hdr.sgml : 20170814 20170814164539 ACCESSION NUMBER: 0001683168-17-002117 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 56 CONFORMED PERIOD OF REPORT: 20170630 FILED AS OF DATE: 20170814 DATE AS OF CHANGE: 20170814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DTHERA SCIENCES CENTRAL INDEX KEY: 0001586372 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS BUSINESS SERVICES [7380] IRS NUMBER: 900925768 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-191175 FILM NUMBER: 171030986 BUSINESS ADDRESS: STREET 1: 9921 CARMEL MOUNTAIN ROAD, SUITE 118 CITY: SAN DIEGO STATE: CA ZIP: 92129 BUSINESS PHONE: (858) 215-6360 MAIL ADDRESS: STREET 1: 9921 CARMEL MOUNTAIN ROAD, SUITE 118 CITY: SAN DIEGO STATE: CA ZIP: 92129 FORMER COMPANY: FORMER CONFORMED NAME: Knowledge Machine International, Inc. DATE OF NAME CHANGE: 20141107 FORMER COMPANY: FORMER CONFORMED NAME: Songbird Development Inc. DATE OF NAME CHANGE: 20130910 10-Q 1 dthera_10q-063017.htm FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-191175

DTHERA SCIENCES

(Exact name of registrant as specified in its charter)

Nevada	90-0925768
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7310 Miramar Rd., Suite 350, San Diego, CA	92126
(Address of principal executive offices)	(Zip Code)

(858) 215-6360

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant 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). Yes x No o

Indicate by check mark whether the registrant has been subject to such filing requirements for the past 90 days.

Yes o No x

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). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

The number of shares outstanding of the registrant’s common stock on August 10, 2017, was 25,492,525.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION	3
Item 1. Financial Statements (unaudited)	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	19
Item 4. Controls and Procedures	20
PART II – OTHER INFORMATION	21
Item 1A. Risk Factors	21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 5. Other Information	22
Item 6. Exhibits	22
SIGNATURES	23

EXPLANATORY NOTE: as discussed herein, Dthera Sciences (the “Company”) effectuated a reverse stock split (the “Reverse Split”) of its common stock which took effect on July 25, 2017. The ratio of the Reverse Split was 1-for-3, meaning one new share for each three prior shares of the Company’s common stock. Although the Reverse Split took effect after the end of the quarterly period covered by this Report, all share totals and amounts in this Report are provided on a post-Reverse-Split basis, unless otherwise indicated.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

DTHERA SCIENCES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of

	June 30,			December 31,
	2017			2016
		(Unaudited)
ASSETS

CURRENT ASSETS
Cash	$	179,100		$	12,191
Deposits		1,000			1,000
TOTAL CURRENT ASSETS		180,100			13,191

LONG TERM ASSETS
Property and equipment, net		50,347			914
TOTAL LONG TERM ASSETS		50,347			914

TOTAL ASSETS	$	230,447		$	14,105

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	168,032		$	268,564
Accounts payable and accrued expenses, related party		–			3,515
Derivative liabilities		–			234,502
Notes payable		–			20,000
Convertible notes payable, net		–			67,345
TOTAL CURRENT LIABILITIES		168,032			593,926
TOTAL LIABILITIES		168,032			593,926

Preferred stock, 1,000,000 shares authorized. $0.001 par value; redeemable preferred stock series A, 150,000 designated; $0.0001 par value; 112,690 shares issued and outstanding as at June 30, 2017 and December 31, 2016		11			11

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 66,666,667 shares authorized; $0.001 par value; 14,431,059 and 12,060,367 shares issued and outstanding as of June 30, 2017 and December 31, 2016		14,431			12,060
Additional paid in capital		3,834,694			1,386,508
Accumulated deficit		(3,786,721	)		(1,978,400	)
Total Stockholders' Equity (Deficit)		62,404			(579,832	)
Total Liabilities and Stockholders' Equity (Deficit)	$	230,447		$	14,105

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DTHERA SCIENCES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended June 30,			For the Three Months Ended June 30,			For the Six Months Ended June 30,			For the Six Months Ended June 30,
	2017			2016			2017			2016

Sales	–			–			–			–
Cost of services	–			–			–			–
GROSS PROFIT	–			–			–			–

OPERATING EXPENSES
Amortization and depreciation		255			236			433			473
General and administrative		1,138,442			97,686			1,441,389			252,193
Professional fees		182,547			23,894			231,894			29,152
TOTAL OPERATING EXPENSES		1,321,244			121,816			1,673,716			281,818

OPERATING LOSS		(1,321,244	)		(121,816	)		(1,673,716	)		(281,818	)

OTHER EXPENSES
Interest expense		–			(20,132	)		(185,847	)		(35,838	)
Impairment of intangible assets		–			(58,960	)		–			(58,960	)
Gain on derivative liability		–			–			142,835			–
Gain on extinguishment of debt		–			–			(91,593	)		–
TOTAL OTHER EXPENSES		–			(79,092	)		(134,605	)		(94,798	)

NET LOSS	$	(1,321,244	)	$	(200,908	)	$	(1,808,321	)	$	(376,616	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic and diluted		7,206,135			12,060,367			13,447,438			12,060,367

Loss per common share
Basic and diluted	$	(0.18	)	$	(0.01	)	$	(0.13	)	$	(0.03	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DTHERA SCIENCES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

(Unaudited)

	2017			2016

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(1,808,321	)	$	(376,616	)
Adjustments for non-cash items:
Amortization and depreciation		433			473
Amortization of debt discount		172,655			4,425
Impairment of intangible assets		–			58,960
Loss on extinguishment of debt		91,593			–
Gain on derivative liability		(142,835	)		–
Options issued for services		1,051,538			11,785
Operating expense paid in behalf of the company		–			22,130
Changes in operating assets and liabilities:
Prepaid expenses		–			21,390
Accounts payable and accrued liabilities		(104,038	)		118,795
NET CASH USED IN OPERATING ACTIVITIES		(738,975	)		(138,658	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(49,866	)		–
NET CASH USED IN INVESTING ACTIVITIES		(49,866	)		–

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		1,215,750			–
Proceeds from issuance of notes payable, related parties		50,000			85,000
Payments on notes payable		(70,000	)		(61,000	)
Proceeds from issuance of convertible notes payable		–			100,000
Payments on convertible notes payable		(240,000	)		–
NET CASH PROVIDED BY FINANCING ACTIVITIES		955,750			124,000

NET CHANGE IN CASH AND CASH EQUIVALENTS		166,909			(14,658	)

CASH AND CASH EQUIVALENTS
Beginning of period		12,191			27,238

End of period	$	179,100		$	12,580

Cash paid for interest	$	19,890		$	–

NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued in extinguishment of debt	$	183,260		$	–
Common stock issued for assets	$	–		$	58,960

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DTHERA SCIENCES

Notes to Condensed Consolidated Financial Statements

June 30, 2017 and December 31, 2016

NOTE 1– CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements of Dthera Sciences (the “Company”) have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2017, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2016 audited financial statements. The results of operations for the periods ended June 30, 2017 and 2016 are not necessarily indicative of the operating results for the full years.

NOTE 2 – GOING CONCERN

The Company's financial statements are prepared using U.S. GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of the date of this Report, the Company had an accumulated deficit of $3,786,721 and no revenues to cover its operating costs, which raises substantial doubt about its ability to continue as a going concern. As of the date of this Report, the Company had not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.

The future of the Company as an operating business will depend on its ability to (1) obtain sufficient capital contributions and/or financing as may be required to sustain its operations and (2) to achieve adequate revenues from its operations. Management's plan to address these issues includes, (a) continued exercise of tight cost controls to conserve cash, (b) obtaining additional financing, (c) placing revenue producing services into place (d) identifying and executing on additional revenue generating opportunities.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Dthera Sciences (formerly Knowledge Machine International, Inc.) is a Nevada corporation, and was incorporated on December 27, 2012.

Dthera Sciences is a digital therapeutics company based in San Diego, California, which is focused on improving the quality of life of patients and their families. The Company's lead product, ReminX, is an artificial-intelligence-powered digital therapeutic designed to improve the quality of life (QoL) and reduce anxiety in patients with Alzheimer's disease and other forms of dementia. On September 21, 2016, the Company acquired a new operating subsidiary, EveryStory, Inc., a Delaware corporation (“EveryStory”). Following the acquisition (referred to herein as the “EveryStory Transaction”), the Company’s business is to develop a Digital Therapeutic technology designed to deliver Reminiscence Therapy to certain patient populations, principally patients suffering from Alzheimer’s disease and dementia with the goal of a Quality of Life benefit and reduction in anxiety in those populations. As of the date of this Report, Dthera Sciences Operations, Inc., was our only subsidiary. In connection with the EveryStory transaction, the Company dissolved its other former subsidiary entity and terminated its prior business operations.

Effective July 25, 2017, a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-3 (one share of new common stock for each three shares of old common stock) (the “Reverse Split”), took effect in the Market, following a filing of a Certificate of Change with the State of Nevada and authorization from the Financial Industry Regulatory Authority (“FINRA”).

Accounting Basis

The Company’s financial statements are prepared using the accrual basis of accounting in accordance with U.S. GAAP.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates are made in relation to the allowance for doubtful accounts and the fair value of certain financial instruments.

Principles of Consolidation

The consolidated financial statements include the accounts of Dthera Sciences and its subsidiaries. All significant inter-Company accounts and transactions have been eliminated.

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

	Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

	Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	Level 3 - Unobservable inputs reflecting the Company's assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments.

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3.

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under Accounting Standards Codification (“ASC”) 815, "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion feature.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of it financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.

For option-based simple derivative financial instruments, the Company uses the Multinomial Lattice option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Stock-Based Compensation

The Company accounts for share based payments in accordance with ASC 718, Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company estimates the fair value of the award using a valuation technique. For this purpose, the Company uses the Black-Scholes option pricing model. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders.

Compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock.

ASC 505, "Compensation-Stock Compensation," establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.

Loss Per Share

Basic loss per Common Share is computed by dividing losses attributable to Common shareholders by the weighted-average number of shares of Common Stock outstanding during the period.

Diluted loss per Common Share is computed by dividing loss attributable to Common shareholders by the weighted-average number of Shares of Common Stock outstanding during the period increased to include the number of additional Shares of Common Stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding convertible Preferred Stock, stock options, warrants, and convertible debt. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s Common Stock can result in a greater dilutive effect from potentially dilutive securities.

For the six months ended June 30, 2017 and 2016, all of the Company’s potentially dilutive securities (warrants and options) were excluded from the computation of diluted earnings per share as they were anti-dilutive. The total number of potentially dilutive Common Shares that were excluded were 1,369,033 for the six months ended June 30, 2017.

Reclassification

Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation.

Recent Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09 Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 was issued as part of the FASB’s simplification initiative and is intended to improve the accounting for share-based payment transactions. The areas for simplification in ASU 2016-09 involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. ASU 2016-09 is effective for annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is permitted in any interim or annual period provided that the entirety of ASU 2016-09 is adopted. If an entity early adopts ASU 2016-09 in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The adoption of this standard did not have a material impact on our consolidated financial statements.

In April 2017, the FASB issued ASU No. 2016-10 Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services (a consensus of the FASB Emerging Issues Task Force) (“ASU 2016-10”). ASU 2016-10 amends certain aspects of the FASB’s new revenue standard, ASU 2014-09. ASU 2016-10 identifies performance obligations and provides licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU No. 2014-09. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods within those periods. The Company is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”). ASU 2016-12 provides for amendments to ASU No. 2014-09, Revenue from Contracts with Customers, amending the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. Specifically, ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. The Company is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures.

Management has considered all other recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.

NOTE 4 – PROPERTY AND EQUIPMENT

The Company’s property and equipment were comprised of the following as of June 30, 2017, and December 31, 2016:

	June 30, 2017			December 31, 2016
Computer & Equipment	$	4,676		$	2,816
Assets Used to Fulfill Contract Obligations		48,006			–
Less: Accumulated Depreciation		(2,335	)		(1,902	)
Net Property and Equipment	$	50,347		$	914

Depreciation expense for the six months ended June 30, 2017 and 2016, was $433 and $473, respectively.

NOTE 5 – INTANGIBLE ASSETS

The Company’s intangible assets were comprised of the following of June 30, 2017, and December 31, 2016:

	June 30, 2017		December 31, 2016
Technology asset purchase	$	–	$	58,960
Less: Accumulated Amortization		–		–
Less: Impairment		–		(58,960	)
Net Intangible Assets	$	–	$	–

The Company impaired intangible assets related to the technology asset purchase and patent purchase due to no revenue production, totaling $0 and $58,960, for the six months ended June 30, 2017 and 2016, respectively.

NOTE 6 – LOANS PAYABLE

Notes Payable

Notes payable consisted of the following as of June 30, 2017, and December 31, 2016:

Balance December 31, 2016	$	20,000
Cash additions		50,000
Expense additions		–
Cash payments		(70,000	)
Conversions		–
Balance June 30, 2017	$	–

On August 3, 2016, the Company entered into a promissory note purchase agreement with an unrelated individual for $20,000. This note was due on demand. The Company repaid this promissory note on April 13, 2017.

On February 3, 2017, the Company issued a short-term note to an unrelated party individual for $50,000 due on demand. The note bore an interest rate of 10% per annum interest within the 90 day period and would increase to 20% interest if not fully paid back within 90 days. On April 9, 2017, the Company repaid the full balance of $50,000.

Convertible Notes Payable

Notes payable due to non-related parties consisted of the following as of June 30, 2017, and December 31, 2016:

Balance December 31, 2016	$	67,345
Cash Payments		(240,000	)
Conversions		–
Debt discount		172,655
Balance June 30, 2017	$	–

Effective September 22, 2016, the Company conducted a private offering of convertible notes (the “Note Offering”) to raise additional capital that would remain in the Company following the Closing of the EveryStory Transaction. In the convertible note offering, the Company raised an aggregate of $240,000, which was to be a component of the post-Closing capitalization of the Company. In the Note Offering, investors entered into a securities purchase agreement (the “Note SPA”) and were issued a convertible redeemable promissory note (collectively, the “Convertible Notes”). Pursuant to the terms of the Note SPA, each investor represented and warranted that it was an accredited investor and that he or she was purchasing the Convertible Notes for his or her own account, and not with a view to distribution, as well as other standard representations made in private transactions. Also pursuant to the Note SPA, the Company had the right to put an additional Convertible Note (in the same principal amount as purchased by the applicable investor) beginning on January 3, 2017, subject to certain conditions. The Convertible Notes bore interest at a rate of 10%, and were to mature on September 13, 2017, if not converted or prepaid prior to that. The Convertible Notes could convert into shares of the Company's common stock at a price for each share of Common Stock equal to 65% of the lowest closing bid price of the Common Stock as reported on the OTC Market platform on which the Company’s shares are quoted or any exchange upon which the Common Stock may be traded in the future ("Exchange"), on the date of the closing of the EveryStory Transaction. Up to 50% of the Convertible Notes could be repaid by the Company any time prior to 180 days after the issuance of the Convertible Notes, with a 30% premium to be paid in connection with the prepayment. As a result of this transaction a debt discount of $240,000 was recorded against the note. As of June 30, 2017, interest expense of $172,655 was recorded as part of the amortization of the debt discount, leaving a debt discount balance of $0.

In March 2017, the Company modified the interest rate on the Convertible Notes to 15% per annum and repaid the Convertible Notes in the original principal amount of $240,000. In connection with the repayment of the Convertible Notes, the Company repaid a total of $240,000 in principal and $18,000 in interest, and agreed to issue 83,300 pre-split/27,768 shares of the Company’s common stock to the holders of the Convertible Notes. The shares of stock were issued pursuant to Section 4(a)(2) of the Securities Act of 1933 and regulations promulgated thereunder. Each of the holders of the Convertible Notes represented to the Company that it was an accredited investor, that it was acquiring the shares for its own account and for investment purposes, and not with an intent to distribute. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the additional shares issued and increase in annual interest rate did result in significant and consequential changes to the economic substance of the debt and thus resulted in loss on extinguishment of the debt of $91,593.

NOTE 7 –DERIVATIVE LIABILITIES

The Company evaluates its fair value hierarchy disclosures each quarter. The Company has convertible notes with embedded conversion features, which is accounted for as a derivative liability and measured at fair value on a recurring basis. As of June 30, 2017, this derivative liability had an estimated fair value of $0.

The following table presents information about our derivative liability, which was our only financial instrument measured at fair value on a recurring basis using significant inputs other than level one inputs that are either directly or indirectly observable (Level 2) as of June 30, 2017:

Balance at December 31, 2016	$	234,502
Conversion		(91,667	)
Change in Fair Value of Derivative		(142,835	)
Balance at June 30, 2017	$	–

The fair value of this derivative liability was calculated using the multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. These models are based on future projections of the various potential outcomes. The features in the notes that were analyzed and incorporated into the model included the conversion feature with the reset provisions; redemption provisions; and the default provisions. Assumptions used to calculate the fair value of the derivative liability were as follows:

	June 30,
	2017
Expected term in years		0.51 years
Risk-free interest rates		0.89%
Volatility		48.05%
Dividend yield		0%

In addition to the assumptions above, the Company also takes into consideration whether or not the Company would participate in another round of financing and if that financing is registered or not and what that stock price would be for the financing at that time. The Company notes that the notes have matured and is no longer calculating a derivative value for these notes.

NOTE 8 – PREFERRED STOCK

The Company has authorized 1,000,000 shares of Preferred Stock, of which it has designated 150,000 shares of $0.0001 par value per share Series A Redeemable Preferred Stock (the “Series A Preferred”). The Series A Preferred has a stated value of $1.00 per share, of which 112,690 and 112,690 shares were issued and outstanding as of June 30, 2017, and December 31, 2016, respectively.

On September 13, 2016, the Company issued the 112,690 shares of Series A Preferred to the CEO and CTO in exchange for amounts owed to them which included $6,096 of accrued expenses, $95,591 of related party loans, $10,000 of convertible notes payable and $1,003 of accrued interest on the convertible notes payable. The shares of Series A Preferred are redeemable at any time for cash on a dollar-per-dollar basis at a redemption price of $1.00 per share. If not redeemed for cash, according to the A&R Agreement the shares of Series A Preferred can be converted into shares of Common Stock using a post-split conversion price of $0.30 per share pursuant to the A&R Agreement.

Series A Preferred

The Series A Preferred have the following rights and preferences:

Redeemable at any time at the option of the holder for cash on a dollar-per-dollar basis at a redemption of $1.00 per share.

Convertible into shares of Common Stock using a conversion price of $0.30 per share.

No general voting rights until converted into Common Stock.

Entitled to receive dividends at a rate per annum of 8%

Liquidation preference upon a liquidation event.

NOTE 9 – COMMON STOCK

The Company has authorized 200,000,000 pre-split/66,666,667 post-split shares of $0.001 par value per share Common Stock, of which 43,293,151 and 36,181,101 pre-split/14,431,059 and 12,060,367 post-split shares were issued outstanding as of June 30, 2017, and December 31, 2016, respectively.

Six Months Ended June 30, 2017

During six months ended June 30, 2017, pursuant to a private placement offering (the “Private Offering”) the Company issued 7,028,750 pre-split/2,342,924 post-split shares of common stock for gross proceeds of approximately $1,215,750.

On March 10, 2017, the Company issued 83,300 pre-split/27,768 post-split shares of the Company’s common stock to the holders of the Convertible Notes as part of the modification and settlement of the notes, fair-valued at $183,260.

Year Ended December 31, 2016

On June 5, 2016, EveryStory issued 88,000 shares of its common stock, which were exchanged for 616,133 pre-split/205,378 post-split shares of Dthera common stock for the purchase agreement for an SIT Patent for a value of $58,960.

On August 3, 2016, EveryStory issued 10,000 shares of its common stock, which exchanged for 70,015 pre-split/23,338 post-split shares of Dthera common stock, for a value of $6,700 of accrued interest.

On September 15, 2016, EveryStory issued 25,000 shares of its common stock, which were exchanged for 175,038 pre-split/58,346 post-split shares of Dthera common stock valued at $16,750 for services.

On September 16, 2016, EveryStory issued 37,500 shares of its common stock, which were exchanged for 263,325 pre-split/87,775 post-split shares of Dthera common stock valued at $25,125 in settlement of $60,000 of accrued consulting fees. This resulted in a gain on settlement of $34,875.

On September 21, 2016, as part of the A&R Agreement, EveryStory issued 625,033 shares of its common stock, which were exchanged for 4,388,997 shares of Dthera common stock, for the conversion of debt for a value of $730,174. In connection with the A&R Agreement, the parties agreed that the prior shareholders of the Company would own an aggregate of 16,000,000 pre-split/5,333,334 post-split shares of the Company’s common stock as part of the agreement totaling $56,354. The reverse stock split is discussed in more detail in Note 1 above.

From November to December 2016, the Company issued 314,500 pre-split/104,833 post-split shares of common stock at $0.20 per share for cash proceeds of $62,900, pursuant to the Private Offering.

NOTE 10 – STOCK PURCHASE OPTIONS

Stock Purchase Options

During the six months ended June 30, 2017, the Company did not issue any stock purchase options. As the holders of the Company’s outstanding options are employees and non-employees, the values attributable to non-employee options are remeasured on a quarterly basis and amortized over the service period and until they have fully vested over a 3 year vesting period. Stock options issued to employees are valued on the date of issuance and amortized over the service period until they have fully vested over a 3 year vesting period. The Company believes that the fair value of the stock options is more reliably measurable than the fair value of the services received. The fair value of the non-employee stock options granted was revalued at each reporting date using the Black-Scholes valuation model. As of June 30, 2017, the Company remeasured the options at a value of $4,607,123 to be recognized over the vesting period, of which $1,051,538 has been recognized.

During the year ended December 31, 2016, EveryStory issued non-employee options to purchase a total of 106,100 shares of EveryStory common stock, which would exchange for 742,860 pre-split/247,620 post-split shares of Dthera common stock, which were originally valued at $63,678. EveryStory issued the options in conjunction with services. The EveryStory options were converted into Dthera options on September 21, 2016, pursuant to the A&R Agreement. As the options holders are non-employees, the values attributable to these options are remeasured on a quarterly basis and amortized over the service period and until they have fully vested over a 3 year vesting period. The Company believes that the fair value of the stock options is more reliably measurable than the fair value of the services received. The fair value of the stock options granted was revalued at each reporting date using the Black-Scholes valuation model. As of December 31, 2016, the Company remeasured the options at a value of $1,609,669 to be recognized over the vesting period, of which $199,969 has been recognized.

The following table summarizes the changes in options outstanding of the Company during the six months ending June 30, 2017:

	Number of Options		Weighted Average Exercise Price $
Outstanding, December 31, 2016		1,382,351		0.29

Outstanding, June 30, 2017		1,382,351		0.29

Exercisable, June 30, 2017		1,134,727		0.29

As of June 30, 2017, the Company had $3,355,616 in unrecognized expense related to future vesting of stock options.

NOTE 11 – FAIR VALUE MEASUREMENTS

Liabilities measured at fair value on a recurring basis at June 30, 2017, are summarized as follows:

	Level 1		Level 2		Level 3		Total
Fair value of options	$	–	$	4,682,580	$	–	$	4,682,580
Fair value of derivatives	$	–	$	–	$	–	$	–

Liabilities measured at fair value on a recurring basis at December 31, 2016, are summarized as follows:

	Level 1		Level 2		Level 3		Total
Fair value of options	$	–	$	–	$	1,609,699	$	1,609,699
Fair value of derivatives	$	–	$	234,502	$	–	$	234,502

Fair value is calculated using the Black-Scholes options pricing model for options and the Binomial Lattice model for derivative liabilities.

NOTE 12- SUBSEQUENT EVENTS

In accordance with ASC 855, Company’s management reviewed all material events through the date of this filing and determined that there were the following material subsequent events to report:

Reverse Stock Split

On July 25, 2017, a reverse stock split (the “Reverse Split”) of the Company’s authorized and outstanding common stock took effect. The ratio of the Reverse Split was 1:3, meaning one new share for each three old shares of the Company’s common stock. In lieu of issuing fractional shares, the Company’s transfer agent was instructed to round up to the nearest whole share.

Following the Reverse Split, the Company had 66,666,667 shares of common stock authorized, and had 14,431,059 shares of common stock outstanding.

Pursuant to Nevada corporate law, the Reverse Split was approved by the Board of Directors. Because the Reverse Split applied both to the outstanding shares and to the authorized shares of common stock of the Company, no shareholder approval was required.

Private Offerings

On July 12, 2017, the Company commenced two parallel private offerings of its securities. The aggregate amount sought to be raised in the two offerings is $975,000.

Investor Offering

The first private offering is offered to investors (the “Investor Offering”), in which the Company is selling units (the “Units”) which consist of four shares of the Company’s common stock and warrants to purchase one additional share of common stock. The per unit price is $0.04 pre-split/$0.12 post-split, and the exercise price for the warrants is $0.15 pre-split/$0.45 post-split. The warrants cannot be exercised until two years from the purchase date (subject to certain conditions), and expire four years after the purchase date.

As of August 10, 2017, the Company had sold an aggregate of 11,061,466 shares of its common stock for $331,841 and issued warrants to purchase an additional 3,227,854 shares in the Investor Offering.

The foregoing summary of the terms and conditions of the Investor Offering does not purport to be complete, and is qualified in its entirety by reference to the full text of the Investment Unit Purchase Agreement and the form of warrant, which were filed as exhibits to a Current Report on Form 8-K filed on July 25, 2017.

Employee/Consultant Offering

The second private offering is being offered to employees and consultants of the Company (the “Employee Offering”), in which the Company is selling shares of its common stock at a purchase price of $0.03 per share, the same price as in the Investor Offering; however, there are no warrants in the Employee Offering. The shares sold in the Employee Offering include restrictions on their resale, and the Company reserves the right to repurchase the shares (the “Repurchase Right”) on terms as agreed between the Company and the employee or consultant. Per the Employee and Consultant Share Purchase Agreement, the Company’s Repurchase Rights will terminate (subject to certain conditions) following a term of not less than 5 months or more than 36 months from the purchase date.

As of August 10, 2017, the Company had sold an aggregate of 0 shares of its common stock for $0 in the Employee Offering.

The foregoing summary of the terms and conditions of the Employee Offering does not purport to be complete, and is qualified in its entirety by reference to the full text of the Employee and Consultant Share Purchase Agreement which was filed as an exhibit to a Current Report on Form 8-K filed on July 25, 2017.

Preferred Shares

On August 2, 2017, the Company redeemed 42,690 shares of Series A Preferred with a stated value of $1.00 per share for $42,690.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of our balance sheets and statements of income. This section should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016, and our interim financial statements and accompanying notes to these financial statements. All amounts are in U.S. dollars.

Forward-Looking Statement Notice

This quarterly report on Form 10-Q of Dthera Sciences (the “Company”) contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies or prospects. In addition, from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Forward-looking statements can be identified by the use of forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should” or “anticipate” or their negatives or other variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical or current matters. These forward-looking statements may be included in, but are not limited to, various filings made by us with the SEC, press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, those set forth in our most recent annual report referenced below.

This report identifies important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements, particularly those set forth under Item 1A – Risk Factors as disclosed in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 17, 2017.

All forward-looking statements attributable to us or persons acting on our behalf speak only as of the date of this report and are expressly qualified in their entirety by the cautionary statements included in this report. We undertake no obligations to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. In evaluating forward-looking statements, you should consider these risks and uncertainties.

Overview

On September 21, 2016, the Company acquired a new operating subsidiary, EveryStory, Inc., a Delaware corporation (“EveryStory”). The Company is developing a Digital Therapeutic technology called ReminX, which is designed to deliver Reminiscence Therapy to certain patient populations, initially patients suffering from Alzheimer’s disease and dementia with the goal of a Quality of Life benefit and reduction in anxiety in those populations. The Company was incorporated in the State of Nevada on December 27, 2012. We conducted this business through October 22, 2014. On October 22, 2014, we acquired an operating subsidiary, Knowledge Machine, Inc., a Nevada corporation, (“Knowledge Machine”), which focused on new technologies, acquiring licensing rights to those technologies, and marketing the licensed technologies, and we sold off our edged tools business. In connection with the EveryStory transaction, we dissolved Knowledge Machine, and terminated the technology licensing and marketing operations.

Our principal offices are located at 7310 Miramar Rd., Suite 350, San Diego, CA 92126.

The Company qualifies as an “emerging growth company” as defined in the Jumpstart our Business Startups Act (the “JOBS Act”).

Dthera Business and Platform

Key components of the Platform include the ability to record audio narratives that are linked to specific photos and which can be played when the photos are viewed; the ability to import photos directly from computers or mobile devices; cloud-based data storage of the photos and the audio recordings; and multiple playback capabilities; collaborative creation and sharing of stories. The Platform was designed for mobile device platforms to enable users to record and store photos and audio easily and conveniently.

The Company’s technology Platform streamlines the creation of personalized digital stories, and management is focused on the goal of becoming the first clinically-proven Digital Therapeutic technology targeting patients with Alzheimer's disease and Dementia. Dthera already has received a US patent (issued in 2010) that broadly covers the use of the Company’s technology in Senior Living facilities. The Company has recently concluded a clinical trial with UCSD which produced positive results indicating that the Company’s ReminX Platform is an effective anxiety reduction and quality of life therapy for those with Alzheimer’s disease or Dementia (“ADOD”).

EveryStory conducts its operations from its facilities located in San Diego, California.

Plan of Operations

Revenue Model

Digital Therapeutics Business Model

Dthera intends to offer the Digital Therapeutics technology directly to the families of ADOD patients as a clinical supported therapy. Additionally, Dthera intends to partner directly with Senior Living management firms, to introduce to the resident and the resident’s families starting in the summer of 2017.

In both the direct-to-User and the Senior Living business models, management anticipates that the product, which will include a digital tablet in the patient’s room, with monthly and/or yearly rates for participation in the program.

Additionally, Dthera intends to seek partners in international markets to help make introductions to the Senior Living-type markets and other implementation techniques.

Once Dthera has begun implementation of the Digital Therapeutics and Reminiscence Therapy applications of the Platform, Dthera’s management intends to further explore other applications of the Platform targeting other indications with patients that could benefit from the core technology.

Results of Operations –Three Months Ended June 30, 2017, Compared to the Three Months Ended June 30, 2016

Gross Revenue. Gross revenue for the three months ended June 30, 2017 and 2016, was $0. Accordingly, there were no costs of goods sold. The Company was previously operating in the edged tools market but that business was sold and a new operating subsidiary was acquired which is operating in the technology market. This new line of business is in the development stage and has not yet recognized any revenue.

Operating Expenses

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2017, totaled $1,138,442, a 1,065% increase compared to general and administrative expenses of $97,686 for the three months ended June 30, 2016. The increase is due to the Company’s amortizing stock and options as compensation compared to the prior three month period.

Professional fees

Professional fees for the for the three months ended June 30, 2017 totaled $182,547, a 664% increase compared to professional fees of $23,894 for the three months ended June 30, 2016. The increase is due to the Company’s incurring more expenses as a result of the 2016 audit, an increase in accounting services, and an increase in compensation to consultants.

Other Expenses

Interest Expenses

Interest expenses for the three months ended June 30, 2017, totaled $0, a 100% decrease compared to interest expenses of $20,132 for the three months ended June 30, 2016. The decrease is due all notes converting in the last quarter and no longer accruing interest and amortization of debt discounts due to payment of all convertible notes in the prior quarter compared to the prior period.

Net Loss. For the reasons stated above, the Company’s net loss for the three months ended June 30, 2017, was $1,321,244, compared to net loss of $200,908 during the three months ended June 30, 2016.

Results of Operations –Six Months Ended June 30, 2017, Compared to the Six Months Ended June 30, 2016

Gross Revenue. Gross revenue for the six months ended June 30, 2017 and 2016, was $0. Accordingly, there were no costs of goods sold. The Company was previously operating in the edged tools market but that business was sold and a new operating subsidiary was acquired which is operating in the technology market. This new line of business is in the development stage and has not yet recognized any revenue.

Operating Expenses

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2017, totaled $1,441,389, a 472% increase compared to general and administrative expenses of $252,193 for the six months ended June 30, 2016. The increase is due to the Company’s amortizing stock and options as compensation compared to the prior six month period.

Professional fees

Professional fees for the for the six months ended June 30, 2017 totaled $231,894, a 695% increase compared to professional fees of $29,152 for the six months ended June 30, 2016. The increase is due to the Company’s incurring more expenses as a result of the 2016 audit and review of quarter one of 2016, an increase in accounting services, and an increase in compensation to consultants.

Other Expenses

Interest Expenses

Interest expenses for the six months ended June 30, 2017, totaled $185,847, a 419% increase compared to interest expenses of $35,838 for the six months ended June 30, 2016. The increase is due notes accruing interest and the full amortization of debt discounts due to payment of all convertible notes in the current period.

Gain on Derivative Liabilities

Gain on Derivative Liabilities for the six months ended June 30, 2017, totaled $142,835, a 100% increase compared to gain on derivative liabilities of $0 for the six months ended June 30, 2016. The increase is due to the Company’s entering into a derivative instrument and closing it during the current period.

Loss on Extinguishment of Debt

Loss on settlement of debt for the six months ended June 30, 2017, totaled $91,593, a 100% increase compared to loss on settlement of debt of $0 for the six months ended June 30, 2016. The increase is due to the Company’s issuing stock in addition to paying the notes and accrued interest in cash in the settlement during the current period.

Impairment of Intangible Assets

Impairment of Intangible Assets for the six months ended June 30, 2017, totaled $0, a 100% decrease compared to Impairment of Intangible Assets of $58,960 for the six months ended June 30, 2016. The decrease is due to the Company’s impairing the intangible asset purchase with stock in the prior period.

Net Loss. For the reasons stated above, the Company’s net loss for the six months ended June 30, 2017, was $1,808,321, compared to net loss of $376,616 during the six months ended June 30, 2016.

Liquidity and Capital Resources

As of June 30, 2017, the Company had cash of $179,100 and deposits of $1,000. The Company had current liabilities of $168,032 consisting of accounts payable and accounts payable and accrued expenses. As of June 30, 2017, the Company had a working capital of $12,068.

The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. The Company has incurred losses since inception to June 30, 2017, with an accumulated deficit of $3,786,721.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity capital expenditures or capital resources.

Recent Developments

Reverse Stock Split

Following the Reverse Split, the Company had 66,666,667 shares of common stock authorized, and had 14,431,059 shares of common stock outstanding.

Private Offerings

On July 12, 2017, the Company commenced two parallel private offerings of its securities. The aggregate amount sought to be raised in the two offerings is $975,000. (Please note: The dollar amounts and share totals provided below in connection with the two offerings are given as post-reverse-split figures.)

Investor Offering

The first private offering is offered to investors (the “Investor Offering”), in which the Company is selling units (the “Units”) which consist of four shares of the Company’s common stock and warrants to purchase one additional share of common stock. The per unit price is $0.12 (equal to $0.03 per share), and the exercise price for the warrants is $0.45. The warrants cannot be exercised until two years from the purchase date (subject to certain conditions), and expire seven years after the purchase date.

As of August 10, 2017, the Company had sold an aggregate of 11,061,466 shares of its common stock for $331,841 and issued warrants to purchase an additional 3,227,854 shares in the Investor Offering.

Employee/Consultant Offering

As of August 10, 2017, the Company had sold an aggregate of 0 shares of its common stock for $0 in the Employee Offering.

Preferred Shares

On August 2, 2017, the Company redeemed 42,690 shares of Series A Preferred with a stated value of $1.00 per share for $42,690.

Results of Clinical Trail

On April 10, 2017, the Company announced the conclusion of a clinical study conducted at University of California San Diego School of Medicine, which demonstrated positive results of its product, ReminX on patients with Alzheimer's disease and Dementia. The study was conducted by J. Vincent Filoteo, PhD, Professor of Psychiatry and Neuropsychology Section Chief in the Department of Psychiatry at UC San Diego School of Medicine.

In the study, subjects were shown personalized video slideshow stories, which were created by the Platform itself, displaying moments from various points in their life along with narration provided by family members.

The underlying science behind the product is called “Reminiscence Therapy,” which is a well-known and well-understood cognitive behavioral therapy, primarily used with the elderly, to both reduce anxiety and increase the quality of life in patients with dementia or those experiencing isolation. Reminiscence Therapy is usually provided either in a one-on-one setting or in groups. One of the key limitations to Reminiscence Therapy in the past was that it is very labor intensive, typically involving a family member or caregiver sitting with the patient manually going through the stories, therefore rendering it not easily scalable.

The Platform enables an immediate implementation of the core features of Reminiscence Therapy that can be provided to patients at any time. Dthera’s Platform allows for the key elements of the therapy to be delivered through a Digital Therapeutic software. Driven by a proprietary artificial intelligence engine, Dthera's software helps families populate stories so that patients in long term care facilities have constant access to personalized Reminiscence Therapy.

Dr. Filoteo stated: “The results of this proof-of-concept study are very promising and have the potential to help herald a new way to deliver a form of relief to patients suffering with dementia and related anxiety or depression. Our results indicate that the use of this software led to an immediate and significant decrease in anxiety and depression in our patients, which was also observed by their caregivers. These significant results, which were larger in magnitude than expected, form the basis to further investigate the neuropsychiatric mechanisms that underlie improved mood through the use of this software technology.”

Dthera’s management believes that digital therapeutics – the use of software to create a medical effect in patients – is an exciting new frontier for medicine, and that this clinical study supports that the ReminX Platform can be used to scale out otherwise labor-intensive medical practices.

Digital Health Summer Summit Presentation

The Company was invited to present at the Digital Health Summer Summit in San Diego. The Digital Health Summer Summit took place June 19-20 in San Diego, California, and offered programming around cutting-edge health and medical technologies, and featured speakers who are innovators, thought leaders, and disrupters in digital health. The summit was co-located at the San Diego Convention Center with the 2017 BIO International Convention (BIO), the world's largest biotechnology convention, which was held June 17-22.

Mr. Cox presented as one of three companies on "Who's Dominating Digital Therapeutics?" on Tuesday, June 20, 2017.

Mr. Cox stated: “We are honored and excited to be presenting alongside such important innovators as Click Therapeutics and Neurotrack. They have long been market leaders in the digital therapeutics space, and we are excited to be part of the growing community raising awareness and importance for digital therapeutics. . . . It is particularly gratifying to be part of the program the year the event is being held here in San Diego, where our company is headquartered.”

Product Rollout

During the second and third quarters of 2017, the Company has achieved several major milestones in its plan to roll out its ReminX product and related services to senior living and dementia treatment facilities, including three pilot programs in place with major senior living firms (representing over 50 communities around the US).

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, the Company is not required to provide the disclosure required by this item.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer who is also our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 15(d)-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by the Report, we did not have a formal audit committee and there was a lack of segregation of duties.

Changes in internal control over financial reporting

There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during our most recent fiscal quarter ended June 30, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1A. Risk Factors

See “Item 1A – Risk Factors” as disclosed in Form 10-K as filed with the Commission on April 17, 2017.

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

Investor Offering

The first private offering is offered to investors (the “Investor Offering”), in which the Company is selling units (the “Units”) which consist of four shares of the Company’s common stock and warrants to purchase one additional share of common stock. The per unit price is $0.12 (equal to $0.03 per share), and the exercise price for the warrants is $0.45. The warrants cannot be exercised until two years from the purchase date (subject to certain conditions), and expire seven years after the purchase date.

As of August 10, 2017, the Company had sold an aggregate of 11,061,466 shares of its common stock for $331,841 and issued warrants to purchase an additional 3,227,854 shares in the Investor Offering.

Employee/Consultant Offering

As of August 10, 2017, the Company had sold an aggregate of 0 shares of its common stock for $0 in the Employee Offering.

The securities offered and sold and to be sold by the Company in the Investor Offering and the Employee Offering were not and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The Investor Offering and the Employee Offering were and are being made in reliance on the private offering exemption of Section 4(a)(2) of the Securities Act and/or the private offering safe harbor provisions of Rule 506 of Regulation D based on the following factors: (i) the number of offerees or purchasers, as applicable, (ii) the absence of general solicitation, (iii) investment representations obtained from the security holders in each of the transactions, (iv) the provision of appropriate disclosure, and (v) the placement of restrictive legends on the certificates reflecting the securities.

Item 5. Other Information.

Preferred Shares

On August 2, 2017, the Company redeemed 42,690 shares of Series A Preferred with a stated value of $1.00 per share for $42,690.

Item 6. Exhibits

Exhibit Number	Title of Document
10.1	Form of Investment Unit Purchase Agreement
10.2	Form of Warrant for Investor Offering
10.3	Form of Employee and Consultant Share Purchase Agreement
31.1	Certification by Principal Executive and Financial Officer
32.1	Certification of Principal Executive and Financial Officer
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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.

	Dthera Sciences

Date: August 14, 2017	By:	/s/ Edward Cox
		Edward Cox Chief Executive Officer, Chief Financial Officer (Principal Executive Officer and Principal Financial Officer)

EX-10.1 2 dthera_ex1001.htm FORM OF INVESTMENT UNIT PURCHASE AGREEMENT

Exhibit 10.1

DTHERA SCIENCES

INVESTMENT UNIT PURCHASE AGREEMENT

PLEASE READ THE FOLLOWING LEGENDS CAREFULLY:

DTHERA SCIENCES (THE “COMPANY”) IS OFFERING TO SELL INVESTMENT UNITS (“UNITS”), EACH UNIT COMPOSED OF (I) FOUR (4) SHARES OF THE COMPANY’S COMMON STOCK AND (II) A WARRANT TO PURCHASE ONE ADDITIONAL SHARE OF THE COMPANY’S COMMON STOCK. THE UNITS BEING OFFERED FOR SALE PURSUANT TO THIS AGREEMENT INVOLVE A HIGH DEGREE OF RISK AND, THEREFORE, SHOULD BE CONSIDERED EXTREMELY SPECULATIVE. THEY SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE POSSIBILITY OF THE LOSS OF THEIR ENTIRE INVESTMENT.

THIS AGREEMENT INVOLVES SUBSTANTIAL RISK, INCLUDING, BUT NOT LIMITED TO, RISKS ARISING FROM THE COMPANY’S LACK OF OPERATING HISTORY, FINANCIAL ASSETS AND REVENUES, COMPETITION, LACK OF DIVERSIFICATION, AND THE ABSENCE OF A MARKET FOR AND RESTRICTIONS ON THE TRANSFERABILITY OF THE UNITS AND THE SECURITIES UNDERLYING SAID UNITS.

THIS AGREEMENT OF THE COMPANY IS OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (“SEC”) AND APPLICABLE STATE SECURITIES COMMISSIONS. HOWEVER, THE SECURITIES AND EXCHANGE COMMISSION AND SUCH STATE COMMISSIONS HAVE NOT MADE AN INDEPENDENT DETERMINATION THAT THE UNITS OFFERED HEREBY ARE EXEMPT FROM REGISTRATION. IN ADDITION, THE UNITS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY SUCH STATE SECURITIES COMMISSION, NOR HAVE ANY SUCH AGENCIES PASSED UPON THE ACCURACY OR ADEQUACY OF THIS AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS AGREEMENT OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM ANY OF OUR MANAGEMENT, AGENTS, REPRESENTATIVES OR EMPLOYEES, AS INVESTMENT, LEGAL, TAX, OR ACCOUNTING ADVICE. THE PURCHASER OF THE UNITS SHOULD CONSULT ITS OWN ATTORNEY, ACCOUNTANT AND OTHER PROFESSIONAL ADVISORS AS TO LEGAL, TAX, ACCOUNTING AND OTHER RELATED MATTERS CONCERNING THE PURCHASE OF THE UNITS.

ANY REPRODUCTION OR DISTRIBUTION OF THIS AGREEMENT, IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF ITS CONTENTS, WITHOUT OUR PRIOR WRITTEN CONSENT, IS STRICTLY PROHIBITED.

FORMER EVERYSTORY SHAREHOLDERS: THIS OFFERING IS BEING CONDUCTED BY THE COMPANY IN CONNECTION WITH THE COMPANY’S EFFORTS TO ALIGN THE OWNERSHIP OF THE COMPANY MORE CLOSELY WITH THE OWNERSHIP PERCENTAGES PREVIOUSLY DISCUSSED PRIOR TO THE SHARE EXCHANGE TRANSACTION BETWEEN THE COMPANY (THEN KNOWN AS KNOWLEDGE MACHINE INTERNATIONAL, INC.) AND THE HOLDERS OF SECURITIES OF EVERYSTORY, INC. BY SIGNING BELOW, YOU WAIVE ANY CLAIM THAT YOU MAY HAVE AGAINST THE COMPANY RELATING TO THE SHARE EXCHANGE TRANSACTION BETWEEN THE COMPANY AND THE HOLDERS OF EVERYSTORY SECURITIES. PLEASE SEEK LEGAL COUNSEL IF YOU HAVE ANY QUESTIONS RELATING TO THIS WAIVER.

THE UNITS OFFERED FOR SALE UNDER THIS AGREEMENT ARE OFFERED SUBJECT TO WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFERING WITHOUT PRIOR NOTICE TO THE PURCHASER PURSUANT TO THE TERMS OF THIS AGREEMENT; AND TO CERTAIN OTHER CONDITIONS SPECIFIED HEREIN. THE COMPANY RESERVES THE RIGHT TO ACCEPT OR REJECT ANY AGREEMENT, IN WHOLE OR IN PART, FOR ANY REASON OR NO REASON.

THE UNITS OFFERED UNDER THIS AGREEMENT MAY BE SUBSCRIBED FOR AND PURCHASED ONLY IF A POTENTIAL INVESTOR IS AN ACCREDITED INVESTOR, AS THAT TERM IS DEFINED IN THE GENERAL RULES AND REGULATIONS PROMULGATED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED.

THE COMMON STOCK AND WARRANTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, THE APPLICABLE STATE SECURITIES LAWS AND THE APPLICABLE LAWS OF ANY OTHER RELEVANT JURISDICTION PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. IN ADDITION, THE COMMON STOCK AND WARRANTS OFFERED HEREUNDER SHALL ALSO BE SUBJECT TO LOCK UP PERIODS AS SET FORTH IN THE AGREEMENT AND WARRANT. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF A PURCHASE OF THE COMMON STOCK AND WARRANTS COMPRISING THE UNITS FOR AN INDEFINITE PERIOD OF TIME. THERE IS ONLY A LIMITED MARKET FOR THE COMPANY’S COMMON STOCK AND THERE WILL BE NO PUBLIC MARKET FOR THE WARRANTS, AND THERE IS NO OBLIGATION ON THE PART OF ANY PERSON TO REGISTER THE COMMON STOCK AND WARRANTS UNDER THE SECURITIES ACT, ANY STATE SECURITIES LAWS OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION. INVESTMENT IN THE COMMON STOCK AND WARRANTS INVOLVES CERTAIN SIGNIFICANT INVESTMENT RISKS, INCLUDING RISKS OF LOSS OF CAPITAL OR ENTIRE INVESTMENT.

THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE UNITS IN ANY STATE WHERE IT WOULD BE UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION AND DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION TO ANY MEMBER OF THE GENERAL PUBLIC. THIS AGREEMENT CONSTITUTES AN OFFER ONLY TO THE PERSON OR ENTITY NAMED A PARTY HERETO, AND WHOSE SIGNATURE IS REQUIRED BELOW, AND ONLY IF IT IS SIGNED ON BEHALF OF THE COMPANY. ANY DISTRIBUTION OF THIS AGREEMENT TO ANY PERSON OR ENTITY OTHER THAN THE PERSON OR ENTITY NAMED BELOW IS UNAUTHORIZED.

IN MAKING AN INVESTMENT DECISION, THE POTENTIAL INVESTOR MUST RELY ON ITS OWN EXAMINATION OF THE UNITS AND THE COMPANY, AS WELL AS THE TERMS OF THIS AGREEMENT AND THE COMPANY’S OTHER GOVERNING DOCUMENTS.

THIS AGREEMENT CONTAINS PROPRIETARY AND CONFIDENTIAL INFORMATION OF DTHERA SCIENCES; BY ACCEPTING DELIVERY OF THIS AGREEMENT THE PURCHASER AGREES NOT TO DISCLOSE ANY INFORMATION CONTAINED HEREIN EXCEPT TO HIS OR ITS LEGAL COUNSEL AND OTHER PROFESSIONAL ADVISORS IN CONNECTION WITH AN EVALUATION OF THE ADVISABILITY OF INVESTING IN THE COMPANY BY PURCHASING THE SECURITIES UNDER THIS AGREEMENT.

INVESTMENT UNIT PURCHASE AGREEMENT

THIS INVESTMENT UNIT PURCHASE AGREEMENT (“Agreement”) is made effective as of the _____ day of ________, 2017, by and among Dthera Sciences, Inc., a Nevada corporation (the “Company”), and the undersigned investor (the “Investor”).

RECITALS

WHEREAS, the Investor wishes to purchase from the Company, and the Company wishes to sell and issue to the Investor, upon the terms and conditions stated in this Agreement, that number of investment units set forth on the signature page hereto (the “Units”), each Unit composed of (i) FOUR (4) shares of the Company’s Common Stock priced at $0.03 per share (the “Common Stock”) and (ii) a warrant (the “Warrant”) to purchase one additional share of the Company’s Common Stock at $0.45 per share (the shares of Common Stock issuable upon exercise of the Warrant are referred to herein as the “Warrant Shares”); and

WHEREAS, the Company and the Investor agree to be bound by the terms of this Agreement relating to conditions, restrictions, and terms of the Warrants and the Shares.

NOW, THEREFORE, in consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Purchase and Issuance of the Units; Restrictions on Resale of Shares of Common Stock.

1.1. Subject to the terms and conditions of this Agreement, Investor hereby agrees to purchase, and the Company hereby agrees to sell and issue to the Investor, the number of Units set forth opposite the Investor’s name on the signature page attached hereto for a purchase price equal to the product of (x) the number of Units subscribed for and (y) $0.12 per Unit (the “Purchase Price”). The Purchase Price is payable by check made payable to the order of “Dthera Sciences” or by wire transfer of immediately available funds delivered contemporaneously herewith as follows:

	Bank Name:	Square 1 Bank

	Bank Address:	406 Blackwell Street, Suite 240
		Durham, NC 27701

	ABA/Routing #
	Acct #:
	Acct Name:	EveryStory, Inc.

	FBO:
		(Investor Name)

1.2. The shares of Common Stock purchased pursuant to the Offering are subject to restrictions on their resale as follows:

(a) One half of the shares of common stock purchased may not be resold until that date which is twelve (12) months from the Closing Date; and

(b) The remaining one half of the shares of common stock purchased may not be resold until that date which is eighteen (18) months from the Closing Date.

(c) The Board of Directors of the Company has the right, but not the obligation, as determined in the Board’s sole discretion, to shorten the restrictive periods set forth above for one or more investors in this Offering, including the Investor, on a case by case basis.

2. Closing.

2.1. The closing shall be held on ________________, 2017, at a mutually convenient place as the Company and the Investor mutually shall agree upon, orally or in writing (which time and place are designated as the “Closing”; the date of the Closing referred to hereinafter as the “Closing Date”).

2.2. At Closing, the Company shall deliver, or cause to be delivered promptly thereafter, to Investor (i) a stock certificate representing the Common Stock in the Units purchased by Investor and (ii) a Warrant representing the Warrants in the Units purchased by Investor, against delivery to the Company by the Investor of payment therefor by check or by wire transfer. The Company and Investor shall also deliver such other documents as are called for herein.

3. Representations and Warranties of the Company. The following representations and warranties are qualified in their entirety by the SEC Filings, as defined below. Should any representation or warranty of the Company contain any term that contradicts anything in the SEC Filings, the SEC Filing shall control. Accordingly, the Company hereby represents and warrants to the Investor that as of the Closing Date, and subject to the aforementioned qualification that:

3.1. Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own its properties.

3.2. Authorization. The Company has full power and authority and has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Units and the shares of Common Stock and Warrant included therein, including the Warrant Shares (collectively, the “Securities”). The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

3.3. Valid Issuance. The Common Stock, the Warrant and the transaction contemplated hereby have each been duly and validly authorized. Upon the due exercise of the Warrant, the Warrant Shares will be validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor. The Company has reserved a sufficient number of shares of Common Stock for issuance upon the exercise of the Warrants, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.

3.4. Consents. The execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been or will be made pursuant to applicable state securities laws and post-sale filings pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods. Subject to the accuracy of the representations and warranties of Investor set forth in Section 4 hereof, the Company has taken and will take all action necessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the Warrant Shares upon due exercise of the Warrant, and (iii) the other transactions contemplated by the Transaction Documents from any provision of the Company’s Articles of Incorporation or Bylaws that is or could reasonably be expected to become applicable to the Investor as a result of the transactions contemplated hereby. For purposes of this Agreement, “Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein

3.5. Delivery of SEC Filings; Business. The Company has made available to the Investor through the EDGAR system maintained by the SEC, true and complete copies of the Company’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2016, the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, and all other reports filed by the Company pursuant to the Securities Exchange Act of 1934 (collectively, the “SEC Filings”). Investor is encouraged to carefully review the SEC Filings, including the specific Risk Factors set forth therein. At the time of filing thereof, the SEC Filings complied as to form in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

3.6. Use of Proceeds. The net proceeds of the issuance and sale of the Common Stock and the Warrant hereunder shall be used by the Company for working capital and general corporate purposes. Proceeds received pursuant to this Agreement shall be immediately available to the Company for its use.

3.7. No Conflict, Breach, Violation or Default. The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Articles of Incorporation or the Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investor through the EDGAR system), or (ii) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of its assets or properties, or (iii) any agreement or instrument to which the Company is a party or by which the Company is bound.

3.8. Financial Statements. The financial statements included in the SEC Filings present fairly, in all material respects, the consolidated financial position of the Company as of the dates shown and its consolidated results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis (“GAAP”) (except as may be disclosed therein or in the notes thereto). Except as set forth in the financial statements of the Company included in the SEC Filings filed prior to the date hereof, the Company has not incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since the date of such financial statements, none of which, individually or in the aggregate, have had or could reasonably be expected to have a material adverse effect on the Company.

3.9. No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D of the 1933 Act) in connection with the offer or sale of any of the Securities.

3.10. Private Placement. Subject to the accuracy of the representations and warranties of Investor set forth in Section 4 hereof, the offer and sale of the Securities to the Investor as contemplated hereby is exempt from the registration requirements of the 1933 Act.

4. Representations and Warranties of the Investor. Investor hereby represents and warrants to the Company that:

4.1. Authorization. Investor: (i) if a natural person, represents that the Investor has reached the age of 21 and has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Securities, such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational or trust documents, such entity has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Securities, the execution and delivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Investor is executing this Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant to this Agreement and make an investment in the Company, and represents that this Agreement constitutes a legal, valid and binding obligation of such entity. The execution and delivery of this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Investor is a party or by which it is bound.

4.2. Purchase Entirely for Own Account. The Securities to be received by Investor hereunder will be acquired for Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to Investor’s right at all times to sell or otherwise dispose of all or any part of Securities in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by Investor to hold the Securities for any period of time. Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

4.3. Investment Experience. Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

4.4. Disclosure of Information. Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities. Investor acknowledges receipt of copies of the SEC Filings via the EDGAR system of the Securities and Exchange Commission (www.sec.gov). Neither such inquiries nor any other due diligence investigation conducted by Investor shall modify, amend or affect Investor’s right to rely on the Company’s representations and warranties contained in this Agreement; provided, Investor shall not rely on representations except those expressly set forth in this Agreement.

4.5. Restricted Securities; Rule 144 Restriction Period for Common Stock; Additional Restrictions on Resale.

(a) The Common Stock and Warrant to be purchased hereunder will not be registered and shall be characterized as “restricted securities” under the federal securities laws, and under such laws such securities may be resold without registration under the 1933 Act only in certain limited circumstances. Each certificate evidencing Common Stock to be issued hereunder shall bear a legend in substantially the following form:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT OR THE ISSUER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE ISSUER, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT. IN ADDITION, THE SECURITIES ARE SUBJECT TO CERTAIN RESTRICTIONS UNDER THAT CERTAIN INVESTMENT UNIT PURCHASE AGREEMENT ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF THIS CERTIFICATE.

(b) In addition, the Warrant issued hereunder shall bear a legend in substantially the following form:

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT. THIS SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS DURING THE FIRST YEAR.

(c) The Investor acknowledges and agrees that, as “restricted securities,” the Common Stock to be purchased by it may not be transferred, hypothecated, sold or otherwise disposed of until (i) a registration statement with respect to such securities is declared effective under the 1933 Act, or (ii) the Company receives an opinion of counsel for the holder(s) of such Common Stock, reasonably satisfactory to counsel for the Company, that an exemption from the registration requirements of the 1933 Act is available. In addition, Investor agrees that Investor will not, for a period of not less than one (1) year from the date hereof, sell in any public market any Common Stock, or any interest therein, purchased pursuant to this Agreement.

4.6. Accredited Investor. Investor is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act (“Accredited Investor”). By initialing the appropriate space(s) below, Investor hereby represents that Investor falls into one of the following categories:

_____ (i) a bank as defined in Section 3(a)(2) of the Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity;

_____ (ii) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;

_____ (iii) an insurance company as defined in Section 2(13) of the Act;

_____ (iv) an investment company registered under the Investment Company Act of 1940 (the “Investment Company Act”);

_____ (v) a business development company as defined in Section 2(a)(48) of the Investment Company Act;

_____ (vi) a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended;

_____ (vii) a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

_____ (viii) an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if either:

_____ (A) the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company or registered investment adviser,

_____ (B) the employee benefit plan has total assets in excess of $5,000,000, or

_____ (C) the plan is a self-directed plan with investment decisions made solely by Persons that are Accredited Investors;

_____ (ix) a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

_____ (x) an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation, a Massachusetts or similar business trust, or a partnership, in each case, not formed for the specific purpose of making an investment in the Company, and in each case, with total assets in excess of $5,000,000;

_____ (xi) a director or executive officer of the Company issuing the Units being offered or sold, or a director, executive officer, or general partner of a general partner of that issuer;

_____ (xii) a natural person whose individual net worth, or joint net worth with his or her spouse, excluding the value of the person’s primary residence and any amount of debt secured by his or her primary residence incurred within the past 60 days, at the time of his or her purchase exceeds $1,000,000;

_____ (xiii) a natural person who has an individual income in excess of $200,000 in each of the two most recent years or joint income with that Person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

_____ (xiv) a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of making an investment in the Company whose purchase of the Securities offered is directed by a sophisticated Person as described in Rule 506(b)(2)(ii) of Regulation D; or

_____ (xv) an entity in which all of the equity owners are Accredited Investors.

4.7. No General Advertisement. Investor did not learn of the investment in the Securities as a result of any public advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television, radio or internet or presented at any seminar or other general advertisement. Rather, Investor learned of the investment in the Securities through its prior contact with the Company, its agents and/or its affiliates.

4.8. Prohibited Transactions. During the last thirty (30) days prior to the date hereof, neither Investor nor any affiliate of Investor which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to Investor’s investments or trading or information concerning Investor’s investments, including in respect of the Securities, or (z) is subject to Investor’s review or input concerning such affiliate’s investments or trading (collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to effect any short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the 1934 Act) with respect to the Common Stock, granted any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derived any significant part of its value from the Common Stock or otherwise sought to hedge its position in the Securities (each, a “Prohibited Transaction”). Prior to the earliest to occur of (i) the date that the Registration Statement (as defined in the Registration Rights Agreement) is declared effective by the SEC or (ii) the date on which the Registration Statement is required to be declared effective by the SEC under the terms of the Registration Rights Agreement, Investor shall not, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in a Prohibited Transaction.

4.9. Contemporaneous Offering. By signing below, the Investor understands, acknowledges, and agrees that the Company has another offering of its securities, separate and apart from this Offering, to certain employees and consultants of the Company (the “Employee Offering”), whereby the Company is selling shares of its common stock, subject to different rights and limitations from those applicable to this Offering.

5. Conditions to Closing.

5.1. Conditions to the Investor’s Obligations. The obligation of Investor to purchase the Common Stock and the Warrant at the Closing is subject to the fulfillment to Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by Investor:

(a) The representations and warranties made by the Company in Section 3 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 3 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date. The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

(b) The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and sale of the Securities and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

(d) No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(e) No stop order or suspension of trading shall have been imposed by the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

5.2. Conditions to Obligations of the Company. The Company’s obligation to sell and issue the Common Stock and the Warrant at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

(a) The representations and warranties made by the Investor in Section 4 hereof (the “Investor Representations”), shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investor Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investor shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

(b) The Investor shall have executed and delivered the Registration Rights Agreement.

6. Covenants and Agreements of the Company.

6.1. Reservation of Common Stock. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of providing for the exercise of the Warrant, such number of shares of Common Stock as shall from time to time equal the number of shares sufficient to permit the exercise of the Warrant issued pursuant to this Agreement in accordance with their respective terms.

6.2. Reports. The Company will furnish to the Investor and/or its assignees such information relating to the Company and any subsidiaries as from time to time may reasonably be requested by the Investor and/or its assignees; provided, however, that the Company shall not disclose material nonpublic information to the Investor, or to advisors to or representatives of the Investor, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investor, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto.

6.3. No Conflicting Agreements. The Company will not take any action, enter into any agreement or make any commitment that would conflict or interfere in any material respect with the Company’s obligations to the Investor under the Transaction Documents.

6.4. Compliance with Laws. The Company will comply in all material respects with all applicable laws, rules, regulations, orders and decrees of all governmental authorities.

6.5. Termination of Covenants. The provisions of Sections 6.2 through 6.4 shall terminate and be of no further force and effect on earlier to occur of (i) the date on which the Company’s obligations under the Registration Rights Agreement to register or maintain the effectiveness of any registration covering the Registrable Securities (as such term is defined in the Registration Rights Agreement) shall terminate; or (ii) Rule 144 becoming available to the Investor with respect to the resale of the applicable Securities then held by Investor.

7. Survival and Indemnification.

7.1. Survival. The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement.

7.2. Indemnification.

(a) By the Investor. Investor agrees to indemnify and hold harmless the Company and its affiliates and their respective directors, officers, employees and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which the Company may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of Investor under the Transaction Documents, and will reimburse the Company for all such amounts as they are incurred by the Company.

8. Miscellaneous.

8.1. Successors and Assigns. This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investor, as applicable, provided, however, that Investor may assign its rights and delegate its duties hereunder in whole or in part to an affiliate or to a third party acquiring some or all of its Securities in a private transaction without the prior written consent of the Company, after notice duly given by Investor to the Company, provided, that no such assignment or obligation shall affect the obligations of Investor hereunder. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.2. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed and transmitted via electronic transmission, which shall be deemed an original.

8.3. Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.4. Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

If to the Company:

Dthera Sciences

9921 Carmel Mountain Road, Suite 118

San Diego, CA 92129

Attention: Edward Cox, CEO

With a copy to:

Kirton McConkie, PC

50 E. South Temple, Suite 400

Salt Lake City, Utah 84111

Attention: C. Parkinson Lloyd, Esq.

If to the Investor:

to the addresses set forth on the signature page hereto.

8.5. Expenses. The parties hereto shall pay their own costs and expenses in connection herewith. In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party which does not prevail in such proceedings shall pay the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.

8.6. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.

8.7. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

8.8. Entire Agreement. This Agreement, including the other Transaction Documents, constitutes the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

8.9. Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

8.10. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the state and federal courts located in San Diego County, California for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

8.11. Company Acceptance. This Agreement is not binding on the Company unless and until the Company executes the signature page set forth below.

[signature page follows]

The undersigned has (have) executed this Investment Unit Purchase Agreement on this ____day of __________ 2017.

The Investor:


Signature		Signature of Spouse/Partner (if applicable)


Individual or Entity Name (and Title, if applicable)		Name




Address		Address


Federal Identification or Social Security No.		Federal Identification or Social Security No.


State of Domicile/Organization/Incorporation

Additional Information for Notice:	Facsimile:
	Email:

Aggregate Purchase Price:		$

Number of Units:

	Shares:

	Warrants:

Date:

, 2017

IN WITNESS WHEREOF, the Company has executed this Investment Unit Purchase Agreement or caused its duly authorized officer to execute this Agreement as of the date set forth below.

The Company:	DTHERA SCIENCES


	By:
	Name:
	Title:

	Date of Execution: _______ ___, 2017

EX-10.2 3 dthera_ex1002.htm FORM OF WARRANT FOR INVESTOR OFFERING

Exhibit 10.2

SUBJECT TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON __________________, 2021 (THE “EXPIRATION DATE”).

_________________, 2017

DTHERA SCIENCES

WARRANT TO PURCHASE SHARES OF
COMMON STOCK

For VALUE RECEIVED, _____________________________ (“Warrantholder”) is entitled to purchase, subject to the provisions and conditions of this Warrant (the “Warrant”), from Dthera Sciences, a Nevada corporation (“Company”), at any time and not later than 5:00 P.M., Eastern time, on the Expiration Date (as defined above), at an exercise price per share equal to $0.45 (the exercise price in effect being herein called the “Warrant Price”), that number of shares (“Warrant Shares”) of the Company’s Common Stock (“Common Stock”) as set forth on the Signature Page hereto. The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as described herein.

Section 1. Record Keeping. The Company shall maintain books for the transfer and registration of the Warrant for purposes of the Company’s books and records. Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in the name of the Warrantholder on the Company’s books and records.

Section 2. Transfers. As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration. Subject to such restrictions, the Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon surrender hereof for transfer, properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and the surrendered Warrant shall be canceled by the Company.

Section 3. Exercise of Warrant; Mandatory Exercise Period; Forfeiture of Warrants.

(a) Subject to Section ____ below, the Warrant shall not be exercisable until __________________________, 2019 (the “Warrant Exercisable Date”), at which time, the entire Warrant shall become exercisable.

(b) If, during the term of the Warrant, including prior to the Warrant Exercisable Date, the Company’s common stock trades on the NASDAQ or another national exchange at price of more than $2.50 for 30 consecutive trading days, then the holders of the Warrants shall have thirty (30) days to exercise the Warrants (the “Mandatory Exercise Period”). After the 30-day Mandatory Exercise Period terminates, any unexercised Warrants will be forfeited, and the Warrantholder shall lose any and all rights to such unexercised Warrants.

(c) Subject to the provisions hereof, the Warrantholder may exercise this Warrant, subject and pursuant to Warrant Exercisable Date and the Mandatory Exercise Period descriptions set forth above, at any time prior to the Expiration Date, upon surrender of the Warrant, together with delivery of a duly executed Warrant exercise form, in the form attached hereto as Appendix A (the “Notice of Exercise”) and payment by cash, certified check or wire transfer of funds of the aggregate Warrant Price for that number of Warrant Shares then being purchased, to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder). The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder or the Warrantholder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered (or the date evidence of loss, theft or destruction thereof and security or indemnity satisfactory to the Company has been provided to the Company), the Warrant Price shall have been paid and the completed Notice of Exercise shall have been delivered. Certificates for the Warrant Shares so purchased shall be delivered to the Warrantholder within a reasonable time after this Warrant shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall be designated by the Warrantholder, as specified in the Notice of Exercise. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the right to purchase the number of shares with respect to which this Warrant shall not then have been exercised. As used herein, “business day” means a day, other than a Saturday or Sunday, on which banks in New York City, New York are open for the general transaction of business. Each exercise hereof shall constitute the re-affirmation by the Warrantholder that the representations and warranties contained in that certain Investment Unit Purchase Agreement entered into by and between the Company and the Warrantholder (the “Purchase Agreement”) are true and correct in all material respects with respect to the Warrantholder as of the time of such exercise. Notwithstanding the foregoing, to effect the exercise of the Warrant hereunder, the Warrantholder shall not be required to physically surrender this Warrant to the Company unless the entire Warrant is exercised. The Warrantholder and the Company shall maintain records showing the amount exercised and the dates of such exercise. The Warrantholder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provision of the paragraph, following exercise of a portion of the Warrant, the number of Warrant Shares of this Warrant may be less than the amount stated on the face hereof.

(d) Company’s Failure to Timely Deliver Securities. If within seven (7) Trading Days after the Company’s receipt of the facsimile copy of a Notice of Exercise the Company shall fail to issue and deliver a certificate to the Warrantholder and register such shares of Common Stock on the Company’s share register or, if the Company’s common shares are publicly trading, credit the Warrantholder’s balance account with the Depository Trust & Clearing Corporation for the number of shares of Common Stock to which the Warrantholder is entitled upon the Warrantholder’s exercise hereunder.

Section 4. Compliance with the Securities Act of 1933. This Warrant may only be exercised by the Warrantholder if the Warrantholder is an “accredited investor” as defined by Rule 501 of Regulation D. The Company may cause the legend set forth on the first page of this Warrant to be set forth on each Warrant, and a similar legend on any security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary.

Section 5. Payment of Taxes. The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid. The Warrantholder shall be responsible for income taxes due under federal, state or other law, if any such tax is due.

Section 6. Mutilated or Missing Warrants. In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon surrender and cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company.

Section 7. Reservation of Common Stock. At any time when this Warrant is exercisable, the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of Common Stock, at least a number of shares of Common Stock equal to 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of this Warrant then outstanding. The Company agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company.

Section 8. Adjustments.

(a) If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then (i) the Warrant Price in effect immediately prior to the date on which such change shall become effective shall be adjusted by multiplying such Warrant Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such change and (ii) the number of Warrant Shares purchasable upon exercise of this Warrant shall be adjusted by multiplying the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior to the date on which such change shall become effective by a fraction, the numerator of which is shall be the Warrant Price in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the Warrant Price in effect immediately after giving effect to such change, calculated in accordance with clause (i) above. Such adjustments shall be made successively whenever any event listed above shall occur.

(b) If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company’s assets to another corporation shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Warrantholder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Warrantholder, at the last address of the Warrantholder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may be entitled to purchase, and the other obligations under this Warrant. The provisions of this paragraph (b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.

(c) In case the Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends or distributions referred to in Section 8(a)), or subscription rights or warrants, the Warrant Price to be in effect after such payment date shall be determined by multiplying the Warrant Price in effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price per share of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Company’s Board of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately prior to such payment date.

(d) An adjustment to the Warrant Price shall become effective immediately after the payment date in the case of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment.

(e) In the event that, as a result of an adjustment made pursuant to this Section 8, the Warrantholder shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Warrant.

(f) To the extent permitted by applicable law and the listing requirements of any stock market or exchange on which the Common Stock is then listed, the Company from time to time may decrease the Warrant Price by any amount for any period of time if the period is at least twenty (20) days, the decrease is irrevocable during the period and the Board shall have made a determination that such decrease would be in the best interests of the Company, which determination shall be conclusive provided however, that the Warrant Price may not be decreased below the Market Price on the date of the execution of the Subscription Agreement. Whenever the Warrant Price is decreased pursuant to the preceding sentence, the Company shall provide written notice thereof to the Warrantholder at least five (5) days prior to the date the decreased Warrant Price takes effect, and such notice shall state the decreased Warrant Price and the period during which it will be in effect.

Section 9. Fractional Interest. The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant. If any fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an amount in cash equal to the Market Price (determined in accordance with Section 3(b)) of such fractional share of Common Stock on the date of exercise.

Section 10. Benefits. Nothing in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the Warrantholder.

Section 11. Notices to Warrantholder. Upon the happening of any event requiring an adjustment of the Warrant Price, the Company shall promptly give written notice thereof to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Failure to give such notice to the Warrantholder or any defect therein shall not affect the legality or validity of the subject adjustment.

Section 12. Identity of Transfer Agent. The Transfer Agent for the Common Stock is Interwest Transfer Co., Inc., in Salt Lake City, Utah. Upon the appointment of any subsequent transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the exercise of the rights of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the name and address of such transfer agent.

Section 13. Notices. Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively given and received as hereinafter described (i) if given by personal delivery, then such notice shall be deemed received upon such delivery, (ii) if given by telex or facsimile, then such notice shall be deemed received upon receipt of confirmation of complete transmittal, (iii) if given by certified mail return receipt requested, then such notice shall be deemed received upon the day such return receipt is signed, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. Copies of such notices shall also be transmitted by email to the email address provided for on the signature page of the Subscription Agreement. All notices shall be addressed as follows: if to the Warrantholder, at its address as set forth in the Company’s books and records and, if to the Company, at the address as follows, or at such other address as the Warrantholder or the Company may designate by ten days’ advance written notice to the other:

If to the Company:

Dthera Sciences

9921 Carmel Mountain Road, Suite 118

San Diego, CA 92129

Attention: Edward Cox, CEO

With a copy to (which copy shall not constitute notice):

Kirton | McConkie

50 E. South Temple, Suite 400

Salt Lake City, UT 84111

Attention: C. Parkinson Lloyd

Section 14. Successors. All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its respective successors and assigns hereunder.

Section 15. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Warrant shall be governed by, and construed in accordance with, the internal laws of the State of California, without reference to the choice of law provisions thereof. The Company and, by accepting this Warrant, the Warrantholder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of California located in San Diego County and the United States District Court for the Southern District of California for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Warrant. The Company and, by accepting this Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. The Company and, by accepting this Warrant, the Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

Section 16. No Rights as Stockholder. Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a stockholder of the Company by virtue of its ownership of this Warrant.

Section 17. Amendment; Waiver. Any term of this Warrant may be amended or waived (including the adjustment provisions included in Section 8 of this Warrant) upon the written consent of the Company and the holders of Warrants representing at least 50.1% of the number of shares of Common Stock then subject to all outstanding Warrants (the “Majority Holders”); provided, that (x) any such amendment or waiver must apply to all Warrants; and (y) the number of Warrant Shares subject to this Warrant, the Warrant Price and the Expiration Date may not be amended, and the right to exercise this Warrant may not be altered or waived, without the written consent of the Warrantholder.

Section 18. Remedies; Other Obligations; Breaches and Injunctive Relief. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Warrantholder right to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Warrantholder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Warrantholder shall be entitled, in addition to all other available remedies, an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

Section 19. Section Headings. The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit or restrict the provisions hereof.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as of the _____ day of _____________, 2017.

DTHERA SCIENCES

By: ________________________________________

Name: Edward Cox

Title: Chief Executive Officer

NUMBER OF WARRANTS GRANTED: __________________________________________

APPENDIX A

DTHERA SCIENCES
NOTICE OF EXERCISE FORM

To Dthera Sciences:

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price and surrender of the Warrant, _______________ shares of Common Stock (“Warrant Shares”) provided for therein, and requests that certificates for the Warrant Shares be issued as follows:

Name

Address

Federal Tax ID or Social Security No.

and delivered by certified mail to the above address, or (if the Company’s Common Stock is publicly traded) electronically (provide DWAC Instructions):

_____________________________________

or other (specify):

_____________________________________

and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s Assignee as below indicated and delivered to the address stated below.

[Signature page follows.]

Appendix A
Warrant Exercise Form

Dated: ___________________, ____


Signature		Signature of Spouse/Partner (if applicable)


Individual or Entity Name (and Title, if applicable)		Name (please print)




Address		Address


Federal Identification or Social Security No.		Federal Identification or Social Security No.

		Assignee:





Note: The signature must correspond with the name of the Warrantholder as written on the first page of the Warrant in every particular, without alteration or enlargement or any change whatever, unless the Warrant has been assigned.

Appendix A
Warrant Exercise Form

EX-10.3 4 dthera_ex1003.htm FORM OF EMPLOYEE AND CONSULTANT SHARE PURCHASE AGREEMENT

Exhibit 10.3

DTHERA SCIENCES

EMPLOYEE AND CONSULTANT SHARE PURCHASE AGREEMENT

PLEASE READ THE FOLLOWING LEGENDS CAREFULLY:

DTHERA SCIENCES (THE “COMPANY”) IS OFFERING TO SELL SHARES OF ITS COMMON STOCK (THE “SHARES”) TO CERTAIN EMPLOYEES AND CONSULTANTS OF THE COMPANY. THE SHARES BEING OFFERED FOR SALE PURSUANT TO THIS AGREEMENT INVOLVE A HIGH DEGREE OF RISK AND, THEREFORE, SHOULD BE CONSIDERED EXTREMELY SPECULATIVE. THEY SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE POSSIBILITY OF THE LOSS OF THEIR ENTIRE INVESTMENT.

THIS AGREEMENT OF THE COMPANY IS OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (“SEC”) AND APPLICABLE STATE SECURITIES COMMISSIONS. HOWEVER, THE SECURITIES AND EXCHANGE COMMISSION AND SUCH STATE COMMISSIONS HAVE NOT MADE AN INDEPENDENT DETERMINATION THAT THE SHARES OFFERED HEREBY ARE EXEMPT FROM REGISTRATION. IN ADDITION, THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY SUCH STATE SECURITIES COMMISSION, NOR HAVE ANY SUCH AGENCIES PASSED UPON THE ACCURACY OR ADEQUACY OF THIS AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS AGREEMENT OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM ANY OF OUR MANAGEMENT, AGENTS, REPRESENTATIVES OR EMPLOYEES, AS INVESTMENT, LEGAL, TAX, OR ACCOUNTING ADVICE. THE PURCHASER OF THE SHARES SHOULD CONSULT ITS OWN ATTORNEY, ACCOUNTANT AND OTHER PROFESSIONAL ADVISORS AS TO LEGAL, TAX, ACCOUNTING AND OTHER RELATED MATTERS CONCERNING THE PURCHASE OF THE SHARES.

ANY REPRODUCTION OR DISTRIBUTION OF THIS AGREEMENT, IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF ITS CONTENTS, WITHOUT OUR PRIOR WRITTEN CONSENT, IS STRICTLY PROHIBITED.

THE SHARES OFFERED FOR SALE UNDER THIS AGREEMENT ARE OFFERED SUBJECT TO WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFERING WITHOUT PRIOR NOTICE TO THE PURCHASER PURSUANT TO THE TERMS OF THIS AGREEMENT; AND TO CERTAIN OTHER CONDITIONS SPECIFIED HEREIN. THE COMPANY RESERVES THE RIGHT TO ACCEPT OR REJECT ANY AGREEMENT, IN WHOLE OR IN PART, FOR ANY REASON OR NO REASON.

THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, THE APPLICABLE STATE SECURITIES LAWS AND THE APPLICABLE LAWS OF ANY OTHER RELEVANT JURISDICTION PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. IN ADDITION, THE SHARES OFFERED HEREUNDER SHALL ALSO BE SUBJECT TO LOCK UP PERIODS AS SET FORTH IN THE AGREEMENT. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF A PURCHASE OF THE SHARES FOR AN INDEFINITE PERIOD OF TIME. THERE IS ONLY A LIMITED MARKET FOR THE COMPANY’S COMMON STOCK, AND THERE IS NO OBLIGATION ON THE PART OF ANY PERSON TO REGISTER THE COMMON STOCK UNDER THE SECURITIES ACT, ANY STATE SECURITIES LAWS OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION. INVESTMENT IN THE SHARES INVOLVES CERTAIN SIGNIFICANT INVESTMENT RISKS, INCLUDING RISKS OF LOSS OF CAPITAL OR ENTIRE INVESTMENT.

THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE SHARES IN ANY STATE WHERE IT WOULD BE UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION AND DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION TO ANY MEMBER OF THE GENERAL PUBLIC. THIS AGREEMENT CONSTITUTES AN OFFER ONLY TO THE PERSON OR ENTITY NAMED A PARTY HERETO, AND WHOSE SIGNATURE IS REQUIRED BELOW, AND ONLY IF IT IS SIGNED ON BEHALF OF THE COMPANY. ANY DISTRIBUTION OF THIS AGREEMENT TO ANY PERSON OR ENTITY OTHER THAN THE PERSON OR ENTITY NAMED BELOW IS UNAUTHORIZED.

IN MAKING AN INVESTMENT DECISION, THE POTENTIAL INVESTOR MUST RELY ON ITS OWN EXAMINATION OF THE SHARES AND THE COMPANY, AS WELL AS THE TERMS OF THIS AGREEMENT AND THE COMPANY’S OTHER GOVERNING DOCUMENTS.

EMPLOYEE AND CONSULTANT SHARE PURCHASE AGREEMENT

THIS EMPLOYEE AND CONSULTANT SHARE PURCHASE AGREEMENT (“Agreement”) is made effective as of the _____ day of _____, 2017, by and among Dthera Sciences, Inc., a Nevada corporation (the “Company”), and the undersigned.

RECITALS

WHEREAS, the Company desires to offer to certain of its employees and consultants (each, an “Investor”) the opportunity to acquire shares of the Company’s common stock (the “Offering”), pursuant to and subject to the terms as set forth in this Agreement; and

WHEREAS, the Company and the Investor agree to be bound by the terms of this Agreement relating to conditions, restrictions, and terms of the Shares.

1. Purchase and Issuance of the Shares; Restrictions on Resale; Company Repurchase Right.

1.1. Subject to the terms and conditions of this Agreement, Investor hereby agrees to purchase, and the Company hereby agrees to sell and issue to the Investor, the number of Shares set forth opposite the Investor’s name on the signature page attached hereto for a purchase price equal to the product of (x) the number of Shares subscribed for and (y) $0.03 per Share (the “Purchase Price”).

1.2. The Purchase Price may be paid as follows:

(a) payable at Closing by check made payable to the order of “Dthera Sciences” or by wire transfer of immediately available funds delivered contemporaneously herewith as follows:

	Bank Name:	Square 1 Bank

	Bank Address:	406 Blackwell Street, Suite 240
		Durham, NC 27701

	ABA/Routing #
	Acct #:
	Acct Name:	EveryStory, Inc.

	FBO:
		(Investor Name)

1.3. The shares of Common Stock purchased pursuant to the Offering are subject to restrictions on their resale as follows:

(a) One third of the shares of common stock purchased may not be resold until that date which is the earlier of (a) twelve (12) months from the date that the Company's common stock is accepted for trading on the NASDAQ or another national market, or (b) twenty-four (24) months from the Closing Date.

(b) An additional one third of the shares of common stock purchased may not be resold until that date which is the earlier of (a) eighteen (18) months from the date that the Company's common stock is accepted for trading on the NASDAQ or another national market, or (b) thirty (30) months from the Closing Date.

(c) The final one third of the shares of common stock purchased may not be resold until that date which is the earlier of (a) twenty-four (24) months from the date that the Company's common stock is accepted for trading on the NASDAQ or another national market, or (b) thirty-six (36) months from the Closing Date.

(d) The Board of Directors of the Company has the right, but not the obligation, as determined in the Board’s sole discretion, to shorten the restrictive periods set forth above for one or more investors in this Offering, including the Investor, on a case by case basis.

1.4. The shares of Common Stock purchased pursuant to the Employee Offering will also be subject to a repurchase right (the “Repurchase Right”) held by the Company that will take effect if the employee or consultant is not employed by or continuing to provide services to the Company, respectively, at any point prior to the expiration schedule set forth in Exhibit A. The Company's Repurchase Right will terminate and expire following a term of not less than 5 months from the date of purchase of the Shares or more than 36 months after the date of the purchase of the Shares, to be agreed upon by the Company and the Investor on an individual basis, as set forth in Exhibit A hereto.

(a) The Company may exercise the Repurchase Right (as applicable) by paying to the employee any cash paid for the shares of Common Stock subject to the Repurchase Right and by releasing the employee from any obligation under a promissory note, if applicable, for the shares of Common Stock subject to the Repurchase Right, or any combination thereof, as applicable.

(b) Upon the termination of employment with the Company by an employee purchaser, or the termination of providing services to the Company by a consultant purchaser, such employee or consultant must pay cash for any shares no longer subject to the Repurchase Right within 15 days of such termination to the extent not fully paid for, or all such shares shall become subject to the Repurchase Right of the Company.

1.5. Under no circumstances may the Company require an Investor to purchase shares in the market to satisfy the Company’s Repurchase Right. The Repurchase Right applies only to shares of the Company’s Common Stock purchased in the Employee Offering that the Investor holds as of the date the Company exercises the Repurchase Right.

1.6. Additionally, in the event that there is an “Equity-based Change of Control” in the Company prior to the expiration of all of the Repurchase Rights as outlined above, any unexpired Repurchase Rights shall expire as of the closing of the Equity-based Change of Control. For purposes of this Agreement, “Equity-based Change of Control” shall mean any change in the ownership of more than fifty percent (50%) of the voting capital stock of the Company in one or more related transactions in which shares of the acquiring entity are exchanged for shares of the Company’s common stock; provided, however, that in the event that the acquiring entity is a publicly traded entity, such entity shall have the right to impose similar repurchase rights on any shares issued in exchange for the shares that would otherwise still be subject to the Company’s Repurchase Right.

2. Closing.

2.1. The closing shall be held on _____ _____, 2017, at a mutually convenient place as the Company and the Investor mutually shall agree upon, orally or in writing (which time and place are designated as the “Closing”; the date of the Closing referred to hereinafter as the “Closing Date”).

2.2. At Closing, the Company shall deliver, or cause to be delivered promptly thereafter, to Investor (i) a stock certificate representing the Common Stock purchased by Investor, against delivery to the Company by the Investor of payment therefor by check or by wire transfer. The stock certificate may also be held in book entry with the transfer agent if the investor so chooses and will still be considered delivered. The Company and Investor shall also deliver such other documents as are called for herein.

3.2. Authorization. The Company has full power and authority and has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Shares (the “Securities”). The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

3.3. Valid Issuance. The Common Stock and the transaction contemplated hereby have each been duly and validly authorized. The Shares when issued will be validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.

3.4. Consents. The execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been or will be made pursuant to applicable state securities laws and post-sale filings pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods. Subject to the accuracy of the representations and warranties of Investor set forth in Section 4 hereof, the Company has taken and will take all action necessary to exempt (i) the issuance and sale of the Securities, and (ii) the other transactions contemplated by the Transaction Documents from any provision of the Company’s Articles of Incorporation or Bylaws that is or could reasonably be expected to become applicable to the Investor as a result of the transactions contemplated hereby. For purposes of this Agreement, “Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein

3.6. Use of Proceeds. The net proceeds of the issuance and sale of the Common Stock hereunder shall be used by the Company for working capital and general corporate purposes. Proceeds received pursuant to this Agreement shall be immediately available to the Company for its use.

4. Representations and Warranties of the Investor. Investor hereby represents and warrants to the Company that:

4.5. Restricted Securities; Rule 144 Restriction Period for Common Stock; Additional Restrictions on Resale.

(a) The Common Stock to be purchased hereunder will not be registered and shall be characterized as “restricted securities” under the federal securities laws, and under such laws such securities may be resold without registration under the 1933 Act only in certain limited circumstances. Each certificate evidencing Common Stock to be issued hereunder shall bear a legend in substantially the following form:

(b) The Investor acknowledges and agrees that in addition to the restrictions contractually imposed by this Agreement, as “restricted securities,” the Common Stock to be purchased by it may not be transferred, hypothecated, sold or otherwise disposed of until (i) a registration statement with respect to such securities is declared effective under the 1933 Act, or (ii) the Company receives an opinion of counsel for the holder(s) of such Common Stock, reasonably satisfactory to counsel for the Company, that an exemption from the registration requirements of the 1933 Act is available. In addition, Investor agrees that Investor will not, for a period of not less than one (1) year from the date hereof, sell in any public market any Common Stock, or any interest therein, purchased pursuant to this Agreement.

4.6. Accredited Investor; Non-Accredited Investor.

(a) If the Investor is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act (“Accredited Investor”), by initialing the appropriate space(s) below, Investor hereby represents that Investor falls into one of the following categories: