Item 1.01 Entry into a Material Definitive Agreement.





Securities Purchase Agreement

On February 25, 2022 (the "Effective Date"), nDivision Inc., a Nevada corporation (the "Company"), entered into a Securities Purchase Agreement (the "Purchase Agreement") with AJB Capital Investments, LLC, a Delaware limited liability company (the "Investor"), with respect to the sale and issuance to the Investor of (i) a promissory note in the principal amount of $600,000 with an original issue discount of $60,000 for a purchase price of $540,000 (the "Note"); (ii) a common stock purchase warrant (the "Warrant") with an exercise price of $0.40 per share (the "Exercise Price") to purchase up to 500,000 shares of the Company's common stock, par value $0.001 per share ("Common Stock"); and (iii) a commitment fee of $150,000 (the "Initial Commitment Fee") in the form of 1,000,000 shares of Common Stock (the "Initial Commitment Fee Shares"), and (iv) an additional commitment fee of $150,000 (the "Extension Commitment Fee" and, together with the Initial Commitment Fee, the "Commitment Fee") in the form of 1,000,000 shares of the Common Stock to be issued upon the extension of the Note's maturity date (the "Extension Commitment Fee Shares" and, together with the Initial Commitment Fee Shares, the "Commitment Fee Shares"). The note can be extended six months at the sole discretion of the Company.

The Company received the aggregate net cash proceeds of $527,500 from the Investor due to a $12,500 reduction in purchase price for legal fees and due diligence expenses of the Investor. The Purchase Agreement provides that the Company may use the proceeds from the sale and issuance of the Note only for working capital and other general corporate purposes. The Purchase Agreement further provides for an adjustment mechanism with respect to the Commitment Fee Shares, which allows the Investor to recuperate any shortfall amount resulting from the sale of the Commitment Fee Shares if the net proceeds from such sale do not at least equal the Commitment Fee.

The Purchase Agreement also contains representations and warranties, other covenants, and other provisions customary for transactions of this nature.

The Note, the Warrant, and the Initial Commitment Fee Shares were issued in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof.

The foregoing summary is not a complete description of all of the terms of the Purchase Agreement and is qualified in its entirety by reference to the full text of the Purchase Agreement filed as Exhibit 10.1 hereto, which is incorporated by reference into this Item 1.01.





The Note

The Note matures on August 25, 2022, and provides for interest to accrue at a rate of ten percent (10%) per annum, or, upon an event of default, the lesser of (i) eighteen percent (18%) per annum, and (ii) the maximum amount permitted under law. The Note may be prepaid at any time, without penalty. The maturity date of the Note may be extended at the sole discretion of the Company up to six months following the date of the original maturity date of the Note. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, breaches of representations and warranties, certain events of bankruptcy, liquidation and suspension of the Common Stock from trading. If such an event of default occurs, the holders of the Notes may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above, as well as the conversion of the Note.

Pursuant to the terms of the Note, the Investor has the right, only following an event of default, to convert all amounts outstanding under the Note into the shares of Common Stock (the "Conversion Shares"). The initial conversion price, following and during an event of default, for the principal and interest of the Note equals the lowest trading price (i) during the previous twenty (20) trading day period ending on the Note issuance date, or (ii) during the previous twenty (20) trading day period ending on date of conversion of the Note, subject to adjustment as provided in the Note.

The Note also contains certain negative covenants, including, among other things, prohibitions on incurrence of indebtedness, sales of assets, stock repurchases, and distributions. So long as the Company has any obligation under the Note, the Company may not, without the Investor's written consent, pay or declare any dividend or other distribution on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock. The Investor may not convert the Note into an amount of shares of Common Stock that would result in the beneficial ownership by the Investor and its affiliates of greater than 4.99% of the number of shares of Common Stock outstanding.

The foregoing summary is not a complete description of all of the terms of the Note and is qualified in its entirety by reference to the full text of the Note filed as Exhibit 10.2 hereto, which is incorporated by reference into this Item 1.01.






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The Warrant

Under the Warrant, the Investor is entitled to exercise the Warrant at the Exercise Price subject to certain adjustments and for a period of three (3) years after the date of the Warrant issuance. The Warrant is exercisable for shares of Common Stock upon the payment in cash of the Exercise Price. The Exercise Price is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock and also upon any distribution of . . .

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.





 (d) Exhibits



Exhibit
No.          Description

  4.1          Common Stock Purchase Warrant dated as of February 25, 2022.
  10.1*        Securities Purchase Agreement dated as of February 25, 2022.
  10.2         Promissory Note in the principal amount of $600,000 dated as of
             February 25, 2022.
  10.3         Security Agreement dated as of February 25, 2022.
104          Cover Page Interactive Data File (the cover page XBRL tags are
             embedded within the inline XBRL document).




*   Schedules, exhibits, and similar attachments have been omitted pursuant to Item
    601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of
    such omitted materials supplementally upon request by the U.S. Securities and
    Exchange Commission.





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