Item 1.01 Entry into a Material Definitive Agreement.
On June 6, 2023, NetBrands Corp., a Delaware corporation (the "Company"),
entered into a securities purchase agreement (the "Purchase Agreement") with
1800 Diagonal Lending LLC, a Virginia limited liability company ("1800
Diagonal"), pursuant to which the Company issued to 1800 Diagonal an unsecured
promissory note in the principal amount of $117,320 (the "Note"). The net
proceeds received by the Company were $100,000, after deducting an original
issue discount in the amount of $12,570 and $4,750 for 1800 Diagonal's legal
fees. The Company intends to use the net proceeds for working capital and
general corporate purposes.
The Note has a principal balance of $117,320, and a stated maturity date of
April 15, 2024. A one-time interest charge of 13%, or $15,251, was applied on
the date of issuance. Interest and outstanding principal shall be paid in nine
payments, each in the amount of $14,730.11 (a total payback to 1800 Diagonal of
$132,571). The first payment is due July 15, 2023, with eight subsequent
payments due each month thereafter. The Note may not otherwise be prepaid in
whole or in part. In the event the Company fails to pay any amount when due
under the Note, the interest rate will increase to 22%. Upon the occurrence and
during the continuation of any event of default under the Note ("Event of
Default"), the Note will become immediately due and payable and the Company is
required to pay to 1800 Diagonal an amount equal to 150% times the sum of (a)
the then outstanding principal amount of the Note, plus (b) any accrued and
unpaid interest on the unpaid principal amount of this Note, plus (c) default
interest, if any, plus (d) any other amounts owed to the 1800 Diagonal pursuant
to the Note. Following any Event of Default, 1800 Diagonal may convert any
amount due under the Note into shares of the Company's common stock (the
"Conversion Shares") at a conversion price equal to 75% multiplied by the lowest
trading price for the Company's common stock during the ten trading days prior
to the conversion date (representing a discount rate of 25% to market);
provided, however, that 1800 Diagonal may not convert any portion of the Note
that would cause it, together with its affiliates, to beneficially own in excess
of 4.99% of the Company's common stock. The Company has agreed to reserve from
its authorized and unissued common stock four times the number of shares that
are actually issuable upon full conversion of the Note to provide for the
issuance of the Conversion Shares. The conversion price and number of shares of
the Company's common stock issuable upon conversion of the Note will be subject
to adjustment from time to time in the event of any combinations,
recapitalization, reclassifications, extraordinary distribution, or similar
event.
The foregoing descriptions of the Purchase Agreement and Note do not purport to
be complete and are qualified in their entirety by reference to the full text of
such documents, copies of which are attached hereto as Exhibits 4.1 and 10.1,
respectively, and 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 contained in Item 1.01 above is incorporated by reference in
this Item 2.03.
Item 3.02 Unregistered Sale of Equity Securities.
The information contained in Item 1.01 above is incorporated herein by reference
in this Item 3.02.
The issuances of the Note, and upon conversion of the Note, the issuance of the
Conversion Shares, are exempt from registration under Section 4(a)(2) of the
Securities Act of 1933, as amended, as transactions by an issuer not involving
any public offering.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
4.1 Promissory Note, dated June 6, 2023, issued to 1800 Diagonal
Lending LLC
10.1 Securities Purchase Agreement, dated June 6, 2023, by and between
the Company and 1800 Diagonal Lending LLC
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)© Edgar Online, source Glimpses
NETBRANDS CORP. 
