| Item 1.01 |
Entry into a Material Definitive Agreement. |
AJB Side Letter
On November 10, 2021 (the “Issue Date”),
Tribal Rides International Corp., a Nevada corporation (the “Company”), entered into a Securities Purchase Agreement
(the “SPA”) with AJB Capital Investments, LLC, a Delaware limited liability company (the “Lender”),
for the purchase of a Convertible Promissory Note in the principal amount of $290,000 (the “Note”).
On May 23, 2023, the Company received an additional
$25,000 from the Lender and, in consideration of receipt of the additional funds from the Lender, the Company entered into the Side Letter
(the “Side Letter”) with the Lender pursuant to which the principal of the Note increased by $30,000. In addition,
pursuant to the Side Letter, the Company entered into the Letter Agreement with the Lender pursuant to which a “make whole”
provision was agreed to which is as follows:
Modification
Fee
(i) The Company paid to Purchaser, as a modification fee, $176,000 (the "Modification Fee"), by issuing to Purchaser that number
of shares of the Company's Common Stock equal to such amount. It is agreed that the number of shares of Common Stock issuable to Purchaser
under this Section was 1,600,000 shares at a price per share of $0.11 (the “Modification Fee Shares”).
(ii) Adjustments.
It is the intention of the Company and Purchaser that the Purchaser shall be able to sell (if Purchaser so elects, in Purchaser’s
sole and absolute discretion) the Modification Fee Shares, and generate net proceeds (net of all brokerage commissions and other fees
or charges payable by Purchaser in connection with the sale thereof) from such sale equal to the Modification Fee. The Purchaser shall
use its best efforts to sell the Modification Fee Shares in the principal trading market of the Company’s Common Stock or otherwise,
at any time in accordance with applicable securities laws. At any time, and from time to time, the Purchaser may elect during the period
beginning on the date which is the six (6) month anniversary of November 10, 2021 (the “Closing”) (the “Adjustment Period”),
the Purchaser may deliver to the Company a reconciliation statement showing the net proceeds actually received by the Purchaser from the
sale of the Modification Fee Shares (the “Sale Reconciliation”). If, as of the date of the delivery by Purchaser of the Sale
Reconciliation (the “Sale Reconciliation Date”), the Purchaser has not realized net proceeds from the sale of such Modification
Fee Shares equal to at least the Modification Fee, as shown on the Sale Reconciliation, then the Company shall, within five (5) business
days, either pay in cash the applicable shortfall amount or immediately take all required action necessary or required in order to cause
the issuance of additional shares of Common Stock (priced at the volume weighted average price over the ten (10) day period preceding
the applicable Sale Reconciliation Date) to the Purchaser in an amount sufficient such that, when sold and the net proceeds thereof are
added to the net proceeds from the sale of any of the previously issued and sold Modification Fee Shares, the Purchaser shall have received
total net funds equal to the Modification Fee. If additional shares of Common Stock are issued pursuant to this Section, and after the
sale of such additional issued shares of Common Stock the Purchaser still has not received net proceeds equal to at least the Modification
Fee, then the Company shall again be required to immediately take all required action necessary or required in order to cause the issuance
of additional shares of Common Stock (or the payment of cash) to the Purchaser as contemplated above, and such additional issuances (or
cash payments) shall continue until the Purchaser has received net proceeds from the sale of such Common Stock equal to the Modification
Fee. In the event additional Common Stock is required to be issued as outlined above, the Company shall instruct the Transfer Agent to
issue certificates or book entry statements representing such additional shares of Common Stock to the Purchaser as promptly as practicable
following the Sale Reconciliation Date, and the Company shall in any event cause the Transfer Agent to deliver such certificates or book
entry statements to Purchaser within five (5) business days following the Sale Reconciliation Date; provided, that if by the fifth (5th)
business day following the Sale Reconciliation Date, the Purchaser has not received such additional shares of Common Stock (or payment
in cash), the Purchaser may notify the Transfer Agent directly of the Company’s obligation to deliver such additional shares of
Common Stock, and the Transfer Agent shall issue such additional shares of Common Stock from the Reserved Amount without any further action
by the Company. In the event such certificates or book entry statements representing such additional shares of Common Stock issuable hereunder
shall not be delivered to the Purchaser within ten (10) business days of the Sale Reconciliation Date, same shall be an immediate default
under the Purchase Agreement and the Transaction Documents. Nothing herein contained shall be interpreted to in any way limit the net
proceeds from the sale of the Modification Fee Shares which shall be generated by the Purchaser. The Company’s obligation to pay
the Modification Fee contemplated by this Section through the sale of Modification Fee Shares, shall be an obligation hereunder, secured
by all Transaction Documents. For the avoidance of doubt, all requirements of Rule 144 shall apply to any resale of any additional shares
of Common Stock issued by the Company pursuant to an adjustment as described above (to the extent Rule 144 is relied upon in connection
with such resale), including, without limitation, holding period requirements.
Lastly, pursuant to the Side Letter, the Company
issued to the Lender warrants to purchase up to 750,000 shares of the Company’s Common Stock (the “Warrants”).
The Warrants are exercisable at $0.25, unless adjusted, and terminate five years from issuance.