1.01 Entry into a Material Definitive Agreement.
On May 3, 2019, Spectrum Global Solutions,
Inc., a Nevada corporation (the “Company”) and Dominion Capital LLC (the “Holder”) entered into an exchange
agreement (the “Exchange Agreement”) to exchange two Senior Secured Convertible Promissory Notes, with principal amounts
of $1,052,631.58 plus accrued interest and $295,746.73 plus accrued interest respectively, for a single Senior Secured Convertible
Promissory note with a principal amount of $1,571,133.67 (the “Exchange Note”).
The interest on the outstanding principal due
under the Exchange Note accrues at a rate of 12% per annum. All principal and accrued interest under the Exchange Note is due on
October 17, 2020 and is convertible into shares of the Company’s Common Stock. The conversion price in effect on the date
such conversion is effected shall be equal to (i) initially, $0.10 or (ii) on or after the date of the closing of the next public
or private offering of equity or equity-linked securities of the Company in which the Company receives gross proceeds in an amount
greater than $100,000, one hundred and five percent (105%) of the price of the Common Stock issuable in the offering. While during
the first six months that the Exchange Note is outstanding, only interest payments are due to the Holder, beginning in October
2019, and on each monthly anniversary thereafter until maturity, amortization payments are due for principal and interest due under
the Exchange Note. The Exchange Note includes customary events of default, including non-payment of the principal or accrued interest
due on the Exchange Note. Upon an event of default, all obligations under the Exchange Note will become immediately due and payable.
The Holder was granted a right to participate
in future financing transactions of the Company while the Exchange Note remains outstanding.
The foregoing summaries of the terms of the
Exchange Note and the Exchange Agreement are subject to, and qualified in their entirety by, the agreements and instruments attached
hereto as Exhibits 4.1 and 10.1, respectively, which are incorporated by reference herein.
Satisfaction of Promissory Notes
On April 25, 2017, pursuant to the terms of
an Asset Purchase Agreement with InterCloud Systems, Inc. (“InterCloud”), the Company purchased 80.1% of the assets
associated with InterCloud’s “AW Solutions” business (“AWS”) including, but not limited to, fixed
assets, real property, intellectual property, and accounts receivables (collectively, the “Assets”). The purchase price
paid by the Company for the Assets included the issuance to InterCloud of a convertible promissory note in the aggregate principal
amount of $2,000,000 (the “AW Note”) as partial consideration for the acquisition.
On February 27, 2018, pursuant to the terms
of an Asset Purchase Agreement with InterCloud, the Company purchased all of the issued and outstanding capital stock and membership
interests of ADEX Corp. (“ADEX”). The Company issued a convertible promissory note in the aggregate principal amount
of $2,000,000 (the “ADEX Note”, and together with the AW Note, the “Notes”) to InterCloud as partial consideration
for the acquisition of ADEX.
On May 6, 2019, in accordance with terms of
the Notes, the Company issued an aggregate of 15,707,163 shares of the Company’s common stock to InterCloud pursuant to the
automatic forced conversion of all outstanding obligations under the Notes, in full satisfaction thereof. The shares issued were
unregistered and are subject to Rule 144 restrictions.