Item 1.01. Entry into a Material Definitive Agreement.
On May 20, 2022, Clubhouse Media Group, Inc. (the "Company") entered into a
Securities Purchase Agreement (the "May 2022 ONE44 SPA") by and between the
Company and ONE44 Capital LLC ("ONE44"). Pursuant to the terms of the May 2022
ONE44 SPA, the Company agreed to issue and sell, and ONE44 agreed to purchase
(the "Purchase"), a convertible promissory note in the aggregate principal
amount of $115,000 (the "May 2022 ONE44 Note"). The May 2022 ONE44 Note has an
original issue discount of $10,000. In addition, the Company agreed to pay
$5,000 in legal fees in connection with execution of the May 2022 ONE44 SPA and
issuance of the May 2022 ONE44 Note. Accordingly, the Company received gross
proceeds of $100,000.Pursuant to the terms of the May 2022 ONE44 SPA, the
Company also agreed to issue 1,155,000 shares of restricted common stock to
ONE44 as additional consideration for the purchase of the May 2022 ONE44 Note.
The May 2022 ONE44 Note bears interest at a rate of 4% per annum and matures on
May 20, 2023. The May 2022 ONE44 Note may be prepaid with the following
penalties/premiums:
Prepay Date Prepay Amount
? 60 days 120% of principal plus accrued interest
61-120 days 130% of principal plus accrued interest
121-150 days 140% of principal plus accrued interest
151-180 days 150% of principal plus accrued interest
The May 2022 ONE44 Note may not be prepaid after the 180th day.
ONE44 is entitled, at its option, at any time after the sixth monthly
anniversary of cash payment, to convert all or any amount then outstanding under
the May 2022 ONE44 Note into shares of common stock at a price per share equal
to 55% of the lowest daily trading VWAP of the Company's common stock for the 20
prior trading days, subject to a 4.99% equity blocker and subject to the terms
of the May 2022 ONE44 Note.
If an Event of Default (as defined in the May 2022 ONE44 Note) occurs, unless
cured within five days or waived, ONE44 may consider the May 2022 ONE44 Note
immediately due and payable and interest will accrue at a rate of 24% per annum,
in addition to certain other remedies.
The foregoing description of the May 2022 ONE44 SPA and the May 2022 ONE44 Note
does not purport to be complete and is qualified in its entirety by reference to
the May 2022 ONE44 SPA and the May 2022 ONE44 Note, copies of which are filed as
Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and which are
incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 above regarding the May 2022 ONE44 Note is
incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number Description
10.1 Securities Purchase Agreement, dated May 20, 2022, by and
between the registrant and ONE44 Capital LLC.
10.2 Convertible Promissory Note, dated May 20, 2022, issued by the
registrant to ONE44 Capital LLC.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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