Kona Gold Beverage, Inc. announced that it has entered into a securities purchase agreement with returning investor, Mast Hill Fund, L.P., a fund managed by Mast Hill Management, LLC for a best effort private placement of a senior secured convertible promissory note with an initial principal amount of $55,706.52 on June 14, 2023. The company will also issue a common stock purchase warrant that is exercisable for the purchase of up to an aggregate of 20,889,945 shares of common stock with a third-party investor. The warrant has a five-year term and is immediately exercisable at an exercise price of $0.003 per share, subject to adjustment and is exercisable by the then-holder on a “cashless” basis.

Pursuant to the securities purchase agreement, the purchase price of the note was $55,706.52, less $8,456.52 in fees, which consisted of an 8% original issue discount of $4,456.52, $2,500 for the Investor’s legal fees, and $1,500 for investment banker related fees. The senior note is due 12 months from its issuance date and is secured by all of our assets and the assets of each of our subsidiaries pursuant to the Security Agreement. The note shall be convertible into shares of common stock at a conversion price of $0.004 per share.

The senior note accrues interest at an annual rate equal to 10% and is due and payable on its maturity date. Interest is payable in cash on the maturity date or, in shares of the common stock at the then-current conversion price if the investor converts the senior note or otherwise accelerates the maturity date, as provided for in the senior note. At our option, we have the right to redeem, in full, the outstanding principal and interest under the senior note prior to its maturity date; provided, that, as of the date of the then-holder’s receipt of the redemption notice, there has not been an event of default.

The company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a $750 administrative fee. The company shall issue securities pursuant to the exemption provided under Regulation D.