Item 1.01 Entry into a Material
Definitive Agreement.
On June 2, 2022, Eco Innovation
Group, Inc. (the “Company”) entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Coventry
Enterprises, LLC, a Delaware limited liability company (“Coventry”), providing for an equity financing facility (the “Equity
Line”). The Purchase Agreement provides that upon the terms and subject to the conditions in the Purchase Agreement, Coventry is
committed to purchase up to Ten Million Dollars ($10,000,000) of shares of common stock, $0.0001 par value per share (the “Common
Stock”), over the 36-month term of the Purchase Agreement (the “Total Commitment”).
Under the terms of the Purchase
Agreement, Coventry will not be obligated to purchase shares of Common Stock unless and until certain conditions are met, including but
not limited to a Registration Statement on Form S-1 (the “Registration Statement”) becoming effective which registers Coventry’s
resale of any Common Stock purchased by Coventry under the Equity Line. From time to time over the 36-month term of the Purchase Agreement,
commencing on the trading day immediately following the date on which the Registration Statement becomes effective, the Company, in our
sole discretion, may provide Coventry with a draw down notice (each, a “Draw Down Notice”), to purchase a specified number
of shares of Common Stock (each, a “Draw Down Amount Requested”), subject to the limitations discussed below. The actual amount
of proceeds the Company will receive pursuant to each Draw Down Notice (each, a “Draw Down Amount”) is to be determined by
multiplying the Draw Down Amount Requested by the applicable purchase price. The purchase price of each share of Common Stock equals 75%
of the lowest trading price of the Common Stock during the five (5) business days prior to the Draw Down Notice date (the “Pricing
Period”).
The maximum number of shares
of Common Stock requested to be purchased pursuant to any single Draw Down Notice cannot exceed the lesser of (i) 200% of the average
daily share volume of the Common Stock in the five (5) trading days immediately preceding the Draw Down Notice or (ii) an aggregate value
of $250,000.
In order to deliver a Draw Down
Notice, certain conditions set forth in the Purchase Agreement must be met. In addition, the Company is prohibited from delivering a Draw
Down Notice if: (i) the Draw Down Amount Requested in such Draw Down Notice exceeds the Maximum Draw Down Amount Requested; (ii) the sale
of shares of Common Stock pursuant to such Draw Down Notice would cause the Company to issue and sell to Coventry or Coventry to acquire
or purchase a number of shares of Common Stock that, when aggregated with all shares of Common Stock purchased by Coventry pursuant to
all prior Draw Down Notices issued under the Purchase Agreement, would exceed the Total Commitment; or (iii) the sale of shares of Common
Stock pursuant to the Draw Down Notice would cause us to issue and sell to Coventry or Coventry to acquire or purchase an aggregate number
of shares of Common Stock that would result in Coventry beneficially owning more than 4.99% of the issued and outstanding shares of Common
Stock.
The Purchase Agreement contains
customary representations, warranties, and covenants by, among, and for the benefit of the parties. Unless earlier terminated, the Purchase
Agreement will terminate automatically on the earlier to occur of: (i) the 36-month anniversary of the date on which the Registration
Statement becomes effective and (ii) the date on which Coventry has purchased or acquired shares of Common Stock pursuant to the Purchase
Agreement equal to the Total Commitment. Under certain circumstances set forth in the Purchase Agreement, the Company and Coventry each
may terminate the Purchase Agreement on one trading day’s prior written notice to the other, without fee, penalty, or cost.
The Purchase Agreement also
provides for our indemnification of Coventry and its affiliates in the event that Coventry incurs losses, liabilities, obligations, claims,
contingencies, damages, costs, and expenses related to a breach by us of any of our representations, warranties, covenants, or agreements
under the Purchase Agreement or the other related transaction documents or any action, suit, claim, or proceeding instituted against Coventry
or its affiliates due to the transactions contemplated by the Purchase Agreement or other transaction documents, subject to certain limitations.
In connection with the Equity
Line, we also entered into a Registration Rights Agreement, dated June 2, 2022, with Coventry (the “Registration Rights Agreement”),
pursuant to which the Company agreed to register for resale all of the shares issuable in accordance with the Purchase Agreement in a
Registration Statement to be filed with the Securities and Exchange Commission.
The description of certain
terms of the Purchase Agreement and the Registration Rights Agreement set forth herein do not purport to be complete and are qualified
in their entirety by the provisions of such agreements, attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated
by reference herein