Item 1.01. Entry into a Material Definitive Agreement
On December 31, 2019, Beyond Commerce, Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Securities Purchase Agreement”) with TCA Special Situations Credit Strategies ICAV, an Irish collective asset vehicle (the “Buyer” or “TCA ICAV”), and TCA Beyond Commerce, LLC, a Wyoming limited liability company (“TCA Beyond Commerce”), pursuant to which the Buyer purchased from the Company a senior secured redeemable debenture having an initial principal amount of $900,000 and an interest rate of 16% per annum (the “Initial Debenture”). The Initial Debenture, and any future debentures that may be purchased by Buyer pursuant to the Securities Purchase Agreement (the “Additional Debentures”), is secured through an unconditional and continuing security interest in all of the assets and properties, including after acquired assets, of the Company and each of its subsidiaries, which are acting as guarantors with respect to the Company’s obligations under the Initial Debenture and any Additional Debentures, pursuant to that certain Security Agreement, dated December 31, 2019, entered into by the Company and TCA Beyond Commerce in favor of the Buyer (the “Security Agreement”).In addition, Geordan Pursglove, the Company’s CEO, delivered a personal guaranty with respect to the Company’s obligations under the Securities Purchase Agreement. Additional Debentures may be issued and funded, subject to and upon the approval of the Company and the Buyer, provided that the total value of the Initial Debenture and the Additional Debentures together shall not exceed $5,000,000.
The Securities Purchase Agreement was entered into as part of a larger financing transaction between the Company and the Buyer. As part of this financing transaction, the Company and the Buyer formed TCA Beyond Commerce as a special purpose vehicle to complete the Company’s acquisition of Customer Centered Strategies, L.L.C., a Minnesota limited liability company (“CCS”), while using the funds generated through the Company’s sale of the Initial Debenture. The Company owns 80% of the outstanding common membership interests of TCA Beyond Commerce (the “Common Units”) and the Buyer owns 2,000 Common Units, comprising the remaining 20% of the Common Units issued, as well as 100% of the 250,000 Series A Preferred Units issued and the sole Series B Preferred Unit issued (which is the sole class of equity with voting rights). The Common Units and the Series A Preferred Units are convertible into shares of the Company’s common stock at a 10% discount to the lowest closing bid price during the preceding 20 trading days and such equity will be redeemed pursuant to the Company’s making of installment payments, in accordance with the Operating Agreement of TCA Beyond Commerce. The Company has pledged its interests in TCA Beyond Commerce to TCA ICAV as security for the repayment of the Initial Debenture.
TCA Beyond Commerce entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”), whereby TCA Beyond Commerce acquired 100% of the authorized and issued membership interests of CCS from its sole member (the “CCS Seller”). TCA Beyond Commerce acquired the membership interests for a purchase price $525,000 (the “CCS Purchase Price”), with $175,000 to be paid in cash and the remaining $350,000 to be paid through TCA Beyond Commerce’s issuance of a convertible promissory note with an original principal of $350,000 and a conversion feature that provides the CCS Seller with the right to convert outstanding principal and accrued interest into shares of the Company’s common stock at a price based on the 10-day trailing average price of the Company’s stock (the “CCS Purchase Note”).
In addition to the CCS Purchase Price, the CCS Seller and Service 800, Inc., a Minnesota corporation and subsidiary of the Company (“Service 800”) entered into an employment agreement whereby the CCS Seller will be employed by Service 800 as Vice President of Operations and Technologies for a period of six months
The foregoing descriptions of the Securities Purchase Agreement, Security Agreement, Membership Interest Purchase Agreement, Operating Agreement, Initial Debenture, and the CCS Purchase Note do not purport to be complete and are qualified in their entirety by the full text of their forms, which are filed as exhibits hereto and incorporated herein by reference.