EDGM EdgeMode Inc (CE)

Item 1.01 Entry into a Material Definitive Agreement.

On April 25, 2023, Edgemode, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Promissory Note Purchase Agreement”) with an accredited investor (the “Investor”), pursuant to which the Company sold the Investor an unsecured promissory note in the principal amount of $60,000 (the “Promissory Note”). The Company received gross proceeds of $60,000 in consideration of issuance of the Promissory Note.

In addition, on April 26, 2023, the Company entered into a Promissory Note Purchase Agreement with another Investor, pursuant to which the Company sold the Investor an unsecured convertible promissory note in the principal amount of $57,502 Promissory Note. The Company received gross proceeds of $57,502 in consideration of issuance of the Promissory Note.

The Promissory Notes shall bear interest at a rate of ten percent (10%) and have a maturity date of May 25, 2023 and May 26, 2023, respectively. The Promissory Notes are convertible into common shares of the Company beginning on the sixth-month anniversary if not repaid by the maturity date. The Promissory Notes have a prepayment percentage of 130% for the period beginning on the issuance date and ending on the maturity date.

The Investors may in their option, at any time following the 180-day anniversary from the issuance date, as defined in the Promissory Notes, convert all or any part of the outstanding and unpaid amount of the Promissory Notes into fully paid and non-assessable shares of Common Stock. If the Promissory Notes are not repaid on or prior to the maturity date, the conversion price will be $0.20 or 50% of the preceding five day VWAP on the six month anniversary, which is lower, subject to a floor conversion price of $0.01 per share. Furthermore, the Notes contain a “most favored nation” provision that allows each Investor to claim any preferable terms from any future securities, excluding certain except issuances. 

Additionally, the Company agreed to reserve 11,750,200 shares of common stock for issuance upon full conversion of both Promissory Notes.

The Promissory Notes provide for standard and customary events of default such as failing to timely make payments under the Promissory Notes when due, the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements and the failure to maintain a listing on the OTC Markets. The Promissory Notes also contains customary covenants. At no time may the Promissory Notes be converted into shares of the Company’s common stock if such conversion would result in the Investor, or its affiliates owning an aggregate of more than 4.99% of the then outstanding shares of the Company’s common stock.

The Promissory Notes were issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

The description of the Promissory Note Purchase Agreement and the Promissory Notes are not complete and are qualified in its entirety by the full text of the Promissory Note Purchase Agreement and the Promissory Note, filed herewith as Exhibits 10.1 and 10.2, which are incorporated by reference into this Item 1.01.