Item 1.01 Entry into a Material Definitive Agreement.
On September 20, 2022 Clean Energy Technology, Inc., a Nevada corporation (the
"Company") closed the transactions contemplated by the Securities Purchase
Agreement with Mast Hill , L.P. (Mast Hill") dated September 16, 2022 pursuant
to which the Company issued to Mast Hill a $300,000 Convertible Promissory Note,
due September 20, 2023 (the "Note") for a purchase price of $270,000 plus an
original issue discount in the amount of $30,000.00 at an interest rate of
fifteen percent (15%) per annum.
The principal and interest of the Note may be converted in whole or in part at
any time on or following the earlier of (i) upon an event of default or (ii) the
date that the Company consummates an IPO and up listing to a national exchange
(the "Up List Offering"), into common stock of the Company, par value $.001
share ("Common Stock"), subject to anti-dilution adjustments and for certain
other corporate actions subject to a beneficial ownership limitation of 4.99% of
Mast Hill and its affiliates. The per share conversion price into which
principal amount and accrued interest may be converted into shares of Common
Stock equals $0.025. However if the Company consummates the Up List Offering on
or before March 15, 2023, then the conversion price will equal 75% of the
offering price per share of Common Stock (or units) as set in the Up List
Offering. Upon an event of default, the Note will become immediately payable,
and the Company shall be required to pay a default rate of interest of 15% per
annum. If the Company issues an equity security or security convertible into
Common Stock following the issue date of the Note, the conversion price of the
Note will be lowered to such price. Certain existing convertible debt is
excluded from these antidilution provisions. At any time prior to an event of
default, the Note may be prepaid by the Company at a 115% premium. The note
contains customary representations, warranties and covenants of the Company.
The foregoing does not purport to be a complete description of the rights and
obligations of the parties under the Note and is qualified by reference to the
Convertible Promissory Note filed as Exhibit 10.151 to this Current Report on
Form 8-K.
The Securities Purchase Agreement provides customary representations, warranties
and covenants of the Company and Mast Hill as well as providing Mast Hill with
registration rights.
The foregoing does not purport to be a complete description of the rights and
obligations of the parties under the Note and is qualified by reference to the
Securities Purchase Agreement filed as Exhibit 10.152 to this Current Report on
Form 8-K.
The Company issued Mast Hill a five-year warrant ("Warrant") to purchase
3,750,000 shares of Common Stock in connections with the transactions described
above. The Warrant may be exercised, in whole or in part, on the earlier of (i)
on or after March 15, 2023 or (ii) the date that the Company consummates an Up
List Offering. The exercise price of the Warrant is $0.04 per share, however,
that if the Company consummates an Up List Offering on or before March 15, 2023,
then the exercise price equals 120% of the offering price per share of Common
Stock (or unit) as set in the Up List Offering. If (i) the date of an exercise
notice is on or after March 15, 2023 and (ii) the per share price of Common
Stock is greater than the exercise price, then, unless there is an effective
non-stale registration statement the Warrant may be exercised on a cashless
exercise basis.
The foregoing does not purport to be a complete description of the rights and
obligations of the parties under the Note and is qualified by reference to the
Warrant filed as Exhibit 10.153 to this Current Report on Form 8-K.
Item 9.01 Financial Statement and Exhibits.
Exhibit No. Description
10.151 Form of Securities Purchase Agreement between Clean Energy
Technologies, Inc. and Mast Hill Fund, L.P. dated September 16,
2022.
10.152 Form of $300,000 Convertible Promissory Note dated September 16,
2022.
10.153 Form of Warrant
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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