Item
1.01 Entry into a Material Definitive Agreement
Effective
on November 15, 2017, The Chron Organization, Inc. (the “Company”) completed the sale to Crown Bridge Partners, LLC
(“Crown Bridge”) pursuant to a Securities Purchase Agreement (the “SPA”) of a convertible promissory note
in the aggregate principal amount of up to $138,000 (the “November 2017 Crown Bridge Note” or “note”)
and a common stock purchase warrant to purchase 920,000 shares of the Company’s Class A Common Stock (the “November
2017 Crown Bridge Warrant”), both of which were dated November 3, 2017. Crown Bridge purchased the note and agreed to pay
aggregate consideration of up to $120,000 with an original issue discount of $18,000 in tranches as follows: $46,000 of principal
amount was funded by payment of $40,000 on the effective date and the balance may be funded in Crown Bridge’s sole discretion
at any time. The first tranche of funding under the November 2017 Crown Bridge Note carries a prorated original issue discount
of $6,000.00 and bears interest at the rate of 5% per year. Interest accrues daily on the outstanding principal amount of the
note at a rate per annum equal to 5% on the basis of a 365-day year. Any amount of principal or interest on this note which is
not paid when due shall bear interest at the rate of the lesser of (i) twelve (12%) per annum or (ii) the maximum amount allowed
by law from the due date thereof until the same is paid. The principal amount of the note and interest are payable on the maturity
date which is 12 months after the funding date of each tranche.
Crown
Bridge is entitled to, at any time or from time to time, convert the Note into shares of our common stock, at a conversion price
per share equal to sixty percent (60%) of the lowest traded price of the common stock during the twenty (20) trading days immediately
preceding the date of the date of conversion, upon the terms and subject to the conditions of the note. The conversion price of
the note is subject to adjustment in the event of stock splits, stock dividends and similar corporate events. In addition, the
conversion price is subject to adjustment if we issue or sell convertible promissory notes that are convertible for a consideration
per share less than the conversion price then in effect or includes a longer look back period than provided in the note. If this
should occur, the conversion price is reduced to the lowest price at which these securities were issued or are exercisable or
in the case of a more favorable look back period, the look back period shall be adjusted to such greater number of days. The note
contains representations, warranties, events of default, beneficial ownership limitations, prepayment options, and other provisions
that are customary of similar instruments.
The
note is not convertible to the extent that (a) the number of shares of our common stock beneficially owned by Crown Bridge and
(b) the number of shares of our common stock issuable upon the conversion of the note or otherwise would result in the beneficial
ownership by Investor of more than 4.99% of our then outstanding common stock. This ownership limitation can be increased or decreased
to any percentage not exceeding 9.99% by Crown Bridge upon 61 days notice to us.
The
November 2017 Crown Bridge Warrant is exercisable for a period of five years and entitles the holder to purchase shares of the
Company’s Common Stock at an exercise price of $0.05 per share. The exercise price of the November 2017 Crown Bridge Warrant
is subject to proportional adjustment in the event of stock splits, recapitalizations and similar corporate events. In addition,
the exercise price of provided for in the November 2017 Crown Bridge Warrant is subject to adjustment if the Company issues or
sells shares of its Common Stock for a consideration per share less than the conversion price or exercise price then in effect,
or issue options, warrants or other securities convertible or exchange for shares of the Company’s Common Stock at a conversion
or exercise price less than the conversion price or exercise price then in effect. If any of these events should occur, the exercise
price each will be reduced to the lowest price at which these securities were issued or are exercisable. In addition, the November
2017 Crown Bridge Warrant may become exercisable on a cashless basis if the market price of the Company’s Common Stock exceeds
the exercise price then in effect. Market price means the highest traded price of our Common Stock during the 20 trading days
prior to the date of any exercise notice issued by the holder of the November 2017 Crown Bridge Warrant.
Registration
Rights Agreement
. The Company also entered into a piggy back registration rights agreement with Crown Bridge dated as of November
3, 2017, as required pursuant to the terms of the SPA (the “Registration Rights Agreement”). The Registration Rights
Agreement requires the Company to, among other things, include all “registrable” shares of the Company’s Common
Stock issuable under the note on a Form S-1 filed by the Company after the issuance date of the note.
On
November 17, 2017, the Company and Crown Bridge entered into an amendment to the SPA, Convertible Note and others documents entered
into in connection therewith to revise the reference to reflect that all references to common stock mean a reference to the Company’s
Class A common stock, par value $0.001 per share (the “Crown Bridge Amendment”).
The
foregoing descriptions of the SPA, November 2017 Crown Bridge Note, November 2017 Crown Bridge Warrant and Registration Rights
Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the SPA, November
2017 Crown Bridge Note, the November 2017 Crown Bridge Warrant, Registration Rights Agreement Crown Bridge Amendment which are
attached as Exhibits 10.1, 10.2, 10.3, 4.1 and 4.2 respectively to this Current Report on Form 8-K, and are incorporated herein
by reference.