ATDS DATA443 Risk Mitigation Inc (PK)

On December 7, 2022, Data443 Risk Mitigation, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a certain accredited investor as purchaser (the “Investor”). Pursuant to the Securities Purchase Agreement, the Company sold, and the Investor purchased, $750,000.00 in principal amount of unsecured convertible notes (the “Notes”) and warrants (the “Warrants”).

The Notes are convertible into shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), at a conversion price per share of $0.50, subject to adjustment under certain circumstances described in the Notes. The Notes were issued with an original issue discount of 20%, do not bear interest, and mature on the earlier of (i) twelve months from the date of issuance or (ii) the date that the Common Stock is listed for trading on any of The New York Stock Exchange, The Nasdaq Global Market, The Nasdaq Global Select Market, The Nasdaq Capital Market or the NYSE American (such date, the “Uplisting Date”).

The Warrants are exercisable on or after the date that is four months after the Uplisting Date (the “Initial Exercise Date) and on or prior to the close of business on the five-year anniversary of the Initial Exercise Date. The Warrant entitles the Investor to purchase up to 100% of that number of shares of Common Stock into which the Note may be converted, subject to adjustment under certain circumstances described in the Warrants, and has an exercise price of $1.155.

The Investor will have “piggyback” registration rights that will allow the Investor to elect to have the Common Stock underlying the Notes and the Warrants included in any underwritten public offering of equity securities subsequently initiated by the Company. The Common Stock included in any underwritten public offering initiated by us will be subject to limitation based on the discretion of the underwriter of such offering.

The Notes and Warrants sold were not registered under the Securities Act of 1933, as amended (the “Securities Act”) or the securities laws of any state, and were offered and sold in reliance upon the exemption from registration afforded by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. The Investor is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.

The foregoing descriptions of the Notes, the Warrants and the Purchase Agreement do not purport to be complete descriptions of the rights and obligations of the parties thereunder and are qualified in their entirety by reference to the full text of such agreements, copies of which are attached hereto as Exhibits 4.1, 4.2 and 10.1, respectively.