UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
On May 20, 2022, Clubhouse Media Group, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “May 2022 ONE44 SPA”) by and between the Company and ONE44 Capital LLC (“ONE44”). Pursuant to the terms of the May 2022 ONE44 SPA, the Company agreed to issue and sell, and ONE44 agreed to purchase (the “Purchase”), a convertible promissory note in the aggregate principal amount of $115,000 (the “May 2022 ONE44 Note”). The May 2022 ONE44 Note has an original issue discount of $10,000. In addition, the Company agreed to pay $5,000 in legal fees in connection with execution of the May 2022 ONE44 SPA and issuance of the May 2022 ONE44 Note. Accordingly, the Company received gross proceeds of $100,000. Pursuant to the terms of the May 2022 ONE44 SPA, the Company also agreed to issue 1,155,000 shares of restricted common stock to ONE44 as additional consideration for the purchase of the May 2022 ONE44 Note.
The May 2022 ONE44 Note bears interest at a rate of 4% per annum and matures on May 20, 2023. The May 2022 ONE44 Note may be prepaid with the following penalties/premiums:
| Prepay Date | Prepay Amount | |
| ≤ 60 days | 120% of principal plus accrued interest | |
| 61-120 days | 130% of principal plus accrued interest | |
| 121-150 days | 140% of principal plus accrued interest | |
| 151-180 days | 150% of principal plus accrued interest |
The May 2022 ONE44 Note may not be prepaid after the 180th day.
ONE44 is entitled, at its option, at any time after the sixth monthly anniversary of cash payment, to convert all or any amount then outstanding under the May 2022 ONE44 Note into shares of common stock at a price per share equal to 55% of the lowest daily trading VWAP of the Company’s common stock for the 20 prior trading days, subject to a 4.99% equity blocker and subject to the terms of the May 2022 ONE44 Note.
If an Event of Default (as defined in the May 2022 ONE44 Note) occurs, unless cured within five days or waived, ONE44 may consider the May 2022 ONE44 Note immediately due and payable and interest will accrue at a rate of 24% per annum, in addition to certain other remedies.
The foregoing description of the May 2022 ONE44 SPA and the May 2022 ONE44 Note does not purport to be complete and is qualified in its entirety by reference to the May 2022 ONE44 SPA and the May 2022 ONE44 Note, copies of which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and which 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 provided in Item 1.01 above regarding the May 2022 ONE44 Note is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit Number | Description | |
| 10.1 | Securities Purchase Agreement, dated May 20, 2022, by and between the registrant and ONE44 Capital LLC. | |
| 10.2 | Convertible Promissory Note, dated May 20, 2022, issued by the registrant to ONE44 Capital LLC. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: May 25, 2022 | CLUBHOUSE MEDIA GROUP, INC. | |
| By: | /s/ Amir Ben-Yohanan | |
| Amir Ben-Yohanan | ||
| Chief Executive Officer | ||