Item 1.01 Entry into a Material Definitive
Agreement.
Effective April 20, 2023, Edgemode, Inc. (the
“Company”) entered into a Securities Purchase Agreement (the “Promissory Note Purchase Agreement”) with an accredited
investor (the “Investor”), pursuant to which the Company sold the Investor an unsecured promissory note in the principal amount
of $60,760 (the “Promissory Note”). The Promissory Note carries a one-time interest charge of thirteen percent (13%) which
was applied on the issuance date to the principal (22% upon the occurrence of an event of default) and has a maturity date of March 10,
2024. The Promissory Note included an original issue discount of $6,510 and transaction expenses of $4,250. The Company received gross
proceeds of $54,250 in consideration of issuance of the Promissory Note.
The Promissory Note requires that the Company
make monthly payments for accrued interest and outstanding principal, which shall be paid in nine (9) payments each in the amount of $7,628.67
for total repayment to the Investor of $68,658. The first payment shall be due May 15, 2023, with eight (8) subsequent payments each month
thereafter. The Company shall have a five (5) day grace period with respect to each payment. The Company has right to accelerate payments
or prepay in full at any time with no prepayment penalty.
The Investor may in its option, at any time following
an event of default, as defined in the Promissory Note, convert all or any part of the outstanding and unpaid amount of the Promissory
Note into fully paid and non-assessable shares of Common Stock at a conversion price per share equal to 71% of the lowest closing bid
price of the Company’s common stock during the 20 trading days prior to the date of conversion. Additionally, the Company agreed
to reserve five times the number of shares of its common stock which may be always issuable upon conversion of the Promissory Note, or
18,002,962 shares of common stock.
The Promissory Note provides for standard and
customary events of default such as failing to timely make payments under the Promissory Note when due, the failure of the Company to
timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements and the failure to maintain a listing on the
OTC Markets. The Promissory Note also contains customary covenants. At no time may the Promissory Note be converted into shares of the
Company’s common stock if such conversion would result in the Investor, or its affiliates owning an aggregate of more than 4.99%
of the then outstanding shares of the Company’s common stock.
In addition, effective April 20, 2023, the Company
entered into a Securities Purchase Agreement (the “Convertible Note Purchase Agreement”) with the Investor, pursuant to which
the Company sold the Investor an unsecured convertible promissory note in the principal amount of $56,962 (the “Convertible Note”).
The maturity date of the Convertible Note is April
11, 2024. The Convertible Note shall bear interest at a rate of 8% per annum (22% upon the occurrence of an event of default), which interest
shall not be payable until the Convertible Note becomes payable, whether at the maturity date or upon acceleration or by prepayment, as
described below. The Convertible Note included an original issue discount of $2,712 and transaction expenses of $4,250. The Company received
gross proceeds of $54,250 in consideration of issuance of the Convertible Note.
The Investor has the option to convert all or
any amount of the principal face amount of the Convertible Note, beginning on the date which is one hundred eighty (180) days following
the date of the Convertible Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount
(as defined below), each in respect of the remaining outstanding amount of the Convertible Note, to convert all or any part of the outstanding
and unpaid amount of the Convertible Note into common stock at the then-applicable conversion price. The conversion price for the Convertible
Note is equal to 65% of the average of the lowest three (3) closing bid prices for the common stock during the fifteen (15) trading day
period prior to the conversion date. Upon the occurrence and during the continuation of certain events of default, the Convertible Note
will become immediately due and payable and the Company will pay the Investor in full satisfaction of its obligations in the Convertible
Note an amount equal to 150% of an amount equal to the then outstanding principal amount of the Convertible Note plus any interest accrued
upon such event of default or prior events of default (the “Default Amount”). Additionally, the Company agreed to reserve
five times the number of shares of its common stock which may be always issuable upon conversion of the Convertible Note, or 16,877,629
shares of common stock.
The Convertible Note may be prepaid until 180
days from the issuance date. If the Convertible Note is prepaid within 60 days of the issuance date, then the prepayment premium shall
be 115% of the face amount plus any accrued interest, if prepaid after 60 days from the issuance date, but less than but less than 180
days from the issuance date, then the prepayment premium shall be 120% of the face amount plus any accrued interest.
The Convertible Note provides for standard and
customary events of default such as failing to timely make payments under the Convertible Note when due, the failure of the Company to
timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements and the failure to maintain a listing on the
OTC Markets. The Convertible Note also contains customary covenants. At no time may the Convertible Note be converted into shares of the
Company’s common stock if such conversion would result in the Investor, or its affiliates owning an aggregate of more than 4.99%
of the then outstanding shares of the Company’s common stock.
The Promissory Note and Convertible Note were
issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933,
as amended.
The description of the Promissory Note Purchase
Agreement, Promissory Note, Convertible Note Purchase Agreement and Convertible Note above is not complete and is qualified in its entirety
by the full text of the Promissory Note Purchase Agreement, Promissory Note, Convertible Note Purchase Agreement and Convertible Note,
filed herewith as Exhibits 10.1, 10.2, 10.3 and 10.4 respectively, which are incorporated by reference into this Item 1.01.