CLUBHOUSE MEDIA GROUP, INC. Item 1.01. Entry into a Material Definitive Agreement.
Securities Purchase Agreement and Convertible Promissory Note
On
The Note has a maturity date of
The Note provides Investor with conversion rights to convert all or any part of
the outstanding and unpaid principal amount of the Note at any time, from time
to time, and at any time during the period beginning on the date which is one
hundred eighty (180) days following the date of the Note and ending on the later
of: (i) the Maturity Date; and (ii) the date of payment of the Default Amount
(as defined in the Note). Notwithstanding the foregoing, the Investor shall not
be entitled to a conversion under the Note upon which the sum of (1) the number
of shares of common stock,
The conversion price ("Conversion Price") is equal to the lesser of the Variable
Conversion Price (as defined in the Note) and Fixed Conversion Price (as defined
in the Note), which is
During the period conversion rights exist, the Company is required to reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of the Note multiplied by four and one half (4.5) (the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Company's obligations contained in the Note. If, at any time, the Company does not maintain the Reserved Amount, it shall constitute an Event of Default (as defined in the Note).
Other Events of Default under the Note include, but are not limited to: (1)
failure to pay principal or interest on the Note when due; (2) failure to issue
and transfer Common Stock upon exercise by Investor of its conversion rights;
(3) the breach by the Company of any material covenant or other material term or
condition of the Note which remains uncured after 20 days' notice by the
Investor; (4) a breach of representations or warranties contained in the Note by
the Company; (5) certain bankruptcy or insolvency related events; (6) delisting
of the Common Stock resulting in the shares no longer being listed OTC or on any
If an Event of Default has occurred and continues uncured, the Note shall become immediately due and payable. If an Event of Default occurs because the Company fails to issue shares of Common Stock to Investor within three business days of receiving a notice of conversion from Investor, the Company shall pay an amount equal to the Default Amount (defined below) multiplied by two (2) in full satisfaction of the Company's obligations under the Note. If an Event of Default occurs for any other reason that continues uncured (or in the case of an appointment of a receiver, bankruptcy, liquidation, or a similar default that may not be cured), the Company shall pay an amount equal to 150% of the Default Amount (defined below) in full satisfaction of the Company's obligations under the Note.
The "Default Amount" is equal to the sum of (a) accrued and unpaid interest on the principal amount of the Note to the date of payment plus (b) default interest, which is calculated based on a rate of 22% per year (inclusive of the . . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As disclosed in Item 1.01 of this Current Report on Form 8-K, the Company issued the Note to Investor. The disclosure in Item 1.01 hereof concerning the Note is incorporated by reference into this Item 2.03 to the extent applicable.
Item 3.02 Unregistered Sales of
As disclosed in Item 1.01 of this Current Report on Form 8-K, the Company issued the Note to the Investor that is convertible into shares of Company Common Stock. The disclosure in Item 1.01 hereof concerning the Note is incorporated by reference into this Item 3.02 to the extent applicable.
The sale and issuance of the Note as disclosed in Item 1.01 of this Current Report on Form 8-K has been determined to be exempt from registration under the Securities Act of 1933, as amended (the "Act"), in reliance on Section 4(2) of the Act.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On
One share of Series X Preferred Stock is outstanding as of
The Company's Articles provide that in the event that the vote of the Company's shareholders is otherwise required by the Nevada Revised Statutes ("NRS"), the number of authorized shares of common stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Company's stock entitled to vote irrespective of Section 78.2055 or Section 78.207 of the NRS, with no vote of any holders of a particular class of stock, voting as a separate class, being required.
On
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits The following exhibits are filed or furnished with this Current Report on Form 8-K: Exhibit Number Description 3.1 Articles of Amendment to the Articles of Incorporation ofClubhouse Media Group, Inc. , datedJune 23, 2022 . 10.1 Securities Purchase Agreement betweenClubhouse Media Group, Inc. and 1800Diagonal Lending, LLC , datedJune 23, 2022 . 10.2 Convertible Promissory Note issued byClubhouse Media Group, Inc. to 1800Diagonal Lending, LLC , datedJune 23, 2022 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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