Item 1.01 Entry into a Material Definitive Agreement.
On February 18, 2022 ("Issue Date"), Diego Pellicer Worldwide, Inc. (the
"Company") entered into a securities purchase agreement (the "Purchase
Agreement") with GS Capital Partners, LLC ("GS Capital"), pursuant to which GS
Capital purchased a convertible promissory note (the "Note") from the Company in
the aggregate principal amount of $165,000, such principal and the interest
thereon convertible into shares of the Company's common stock at the option of
GS Capital. The transaction contemplated by the Purchase Agreement closed on
February 19, 2022. The Company intends to use the net proceeds ($160,000) from
the Note for general working capital purposes.
The maturity date of the Note is February 17, 2023 (the "Maturity Date"). The
Note shall bear interest at a rate of 8% per annum. Principal payments shall be
made in ten (10) installments each in the amount of US$17,800 commencing on the
ninetieth (90th) day anniversary following the Issue Date and continuing
thereafter each thirty (30) days for ten (10) months. Notwithstanding the
forgoing, the final payment of principal and interest shall be due on the
Maturity Date. GS Capital has the option to convert all or any amount of the
principal face amount of the Note from time to time, and at any time following
an event of default, at the then-applicable conversion price. The conversion
price for the Note shall be equal to the Variable Conversion Price (as defined
herein) (subject to equitable adjustments for stock splits, stock dividends or
rights offerings by the Company relating to the Company's securities or the
securities of any subsidiary of the Company, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events). The
"Variable Conversion Price" shall mean 65% multiplied by the Market Price (as
defined herein) (representing a discount rate of 35%). "Market Price" means the
average of the lowest three (3) trading prices for the Common Stock during the
fifteen (15) trading day period ending on the latest complete trading day prior
to the Conversion Date. Notwithstanding the foregoing, GS Capital shall be
restricted from effecting a conversion if such conversion, along with other
shares of the Company's common stock beneficially owned by GS Capital and its
affiliates, exceeds 4.99% of the outstanding shares of the Company's common
stock. The Note may be prepaid by the Company. Pursuant to the terms of the
Purchase Agreement, the Company paid GS Capital's fees and expenses in the
aggregate amount of $5,000. The Note also contains an original issue discount of
$5,000. The Company will also issue 1,700,000 shares of the Company's common
stock to GS Capital as additional consideration for the purchase of the Note.
The Note contains certain events of default, as well as certain customary events
of default, including, among others, breach of covenants, representations or
warranties, insolvency, bankruptcy, liquidation and failure by the Company to
pay the principal and interest due under the Note. Upon the occurrence and
during the continuation of default, Company will be obligated for further
payments/interest to GS Capital, dependent on the nature of the default
The Note was issued, and any shares to be issued pursuant to any conversion of
the Note shall be issued, in a private placement in reliance upon an exemption
from registration provided by Section 4(a)(2) of the Securities Act and/or
Regulation D promulgated thereunder.
The foregoing description of the Note and the Purchase Agreement does not
purport to be complete and is qualified in their entirety by reference to the
full text of the Purchase Agreement and the Note, which are filed as Exhibits
4.1 and 10.1, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement by a Registrant.
The information set forth in Item 1.01 above is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit No. Description
4.1* 8% Promissory Note, dated February 18, 2022, issued by the Company
to GS Capital Partners, LLC
10.1* Securities Purchase Agreement, dated February 18, 2022, by and
between the Company and GS Capital Partners, LLC
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Filed herewith
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