Item
1.01 Entry Into a Material Definitive Agreement
On December 14, 2021, we consummated a
Securities Purchase Agreement with Rick Uhler (“Purchaser”), whereby we issued to Purchaser ten thousand shares of
our Series A Convertible Preferred Stock convertible into 10,000,000 shares of our common stock, subject to appropriate adjustment
in the event of certain corporate events in consideration of the payment of $125,000. The rights and preferences of our Series
A Convertible Preferred Stock are described in Item 5.03 of this Report on Form 8-K and a copy of the Certificate of Designation
setting forth the rights and preferences of our Series A Convertible Preferred Stock is annexed hereto as Item 3.01. For a complete
statement of the terms and conditions of the Securities Purchase Agreement with Purchaser, please see Exhibit 10.1 hereto.
On
December 14, 2021, we entered into a Securities Purchase Agreement with Marko Radisic (“Buyer”), substantially similar to
the Securities Purchase Agreement with Purchaser described above, whereby we agreed to issue to Buyer ten thousand shares of our Series
A Convertible Preferred Stock convertible into 10,000,000 shares of our common stock, subject to appropriate adjustment in the event
of certain corporate events upon receipt of $125,000. To date, we have not received any of the purchase price from Buyer and have not
issued Buyer any shares of our Series A Convertible Preferred Stock. For a complete statement of the terms and conditions of the Securities
Purchase Agreement with Buyer, please see Exhibit 10.2 hereto.
On December 14, 2021,
we consummated a Securities Purchase Agreement with Quick Capital, LLC (“QC”), whereby we issued to QC a convertible promissory
note (“Convertible Note”) in the principal amount of $200,000 and issued to QC a common stock purchase warrant (the “Warrant”)
to purchase 6,500,000 shares of our common stock as additional consideration for its purchase of the Convertible Note. As a condition
to the purchase and sale the Convertible Note and Warrant, we issued to QC 3,111,111 shares (the “Commitment Shares”) of our
common stock and entered into a Piggy-Back Registration Rights Agreement pursuant to which we are to register for resale under the Securities
Act of 1933, as amended, the Commitment Shares and the shares issuable upon conversion of the Convertible Note and exercise of
the Warrant. In consideration of the Convertible Note and Warrant we received $171,000 after payment of a
brokerage fee of $9,000.
The
principal amount of the Note and all interest accrued thereon is payable on December 10, 2022. The Convertible Note provides for
interest at the rate of 12% per annum, payable at maturity, and is convertible into shares of our common stock at a price of $0.0125
per share, subject to anti-dilution adjustments in the event of certain corporate events as set forth in the Convertible Note.
In addition, subject to certain limited exceptions, if at any time while the Convertible Note remains outstanding, we grant any
option to purchase, sell or grant any right to reprice, or otherwise dispose of, issue or sell any shares of our common stock
or securities or rights convertible into or exercisable for shares of our common stock, at a price below the then conversion price
of the Convertible Note, the holder of the Convertible Note shall have the right to reduce the conversion price to such lower
price.
The
Warrant is exercisable until November 3, 2023, at a price of $0.02 per share, subject to customary anti-dilution adjustments.
In addition, subject to certain limited exceptions, if at any time while the Warrant remains outstanding,
we grant any option to purchase, sell or grant any right to reprice, or otherwise dispose of, issue or sell any shares of our
common stock or securities or rights convertible into or exercisable for shares of our common stock, at a price below the then
exercise price of the Warrant, the holder of the Warrant shall have the right to reduce the exercise price to such lower price.
At any time when the Market Price, as defined in the Warrant, is in excess of the exercise price, the holder of the Warrant shall
have the right to exercise the Warrant by means of a “cashless exercise” in accordance with the formula provided in
the Talos Warrant.
The Commitment Shares and the shares issuable
upon conversion of the Convertible Note and exercise of the Warrant are to be registered under the Securities Act for resale as
provided in the Registration Rights Agreement. QC has agreed to limit sales of the common stock issued upon conversion of Convertible
Note, during the period beginning on the date of issuance of the Convertible Note and ending on the maturity date or the date of
occurrence of an event of default, to the greater of $5,000 or 15% of the Daily Dollar Volume, as defined in the Convertible Note.
For
a complete statement of the terms and conditions of the Convertible Note, Warrant and Registration Rights Agreements, please see
Exhibits 10.3, 10.4 and 10.5 hereto.
