Current Report Filing (8-k)
May 05 2021 - 3:12PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): April 29, 2021
CLUBHOUSE
MEDIA GROUP, INC.
(Exact
name of registrant as specified in its charter)
Nevada
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333-140645
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99-0364697
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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3651
Lindell Road, D517
Las
Vegas, Nevada 89103
(Address
of principal executive offices) (Zip code)
(702)
479-3016
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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N/A
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N/A
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N/A
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
1.01 Entry Into A Material Definitive Agreement.
Convertible
Promissory Note – GS Capital Partners
On
April 29, 2021, Clubhouse Media Group, Inc. (the “Company”) entered into a securities purchase agreement (the “Securities
Purchase Agreement”) with GS Capital Partners, LLC (“GS Capital”), pursuant to which, on same date, the Company
issued a convertible promissory note to GS Capital in the aggregate principal amount of $550,000 for a purchase price of $500,000,
reflecting a $50,000 original issue discount (the “April 2021 GS Capital Note #2”) and,
in connection therewith, sold to GS Capital 125,000 shares of the Company’s common stock, par value $0.001 per share
(the “Company Common Stock”) at a purchase price of $125, representing a per
share price of $0.001 per share. In addition, at the closing of this sale, the Company reimbursed GS Capital the sum of $5,000
for GS Capital’s costs in completing the transaction, which amount GS Capital withheld from the total purchase price paid
to the Company.
The
April 2021 GS Capital Note #2 has a maturity date of April 29, 2022 and bears interest at 10% per year. No payments of the principal
amount or interest are due prior to the maturity date other than as specifically set forth in the April 2021 GS Capital Note #2,
and the Company may prepay all or any portion of the principal amount and any accrued and unpaid interest at any time without
penalty.
The
April 2021 GS Capital Note #2 (and the principal amount and any accrued and unpaid interest) is convertible into shares of the
Company’s common stock, par value $0.001 per share (the “Company Common Stock”) at GS Capital’s election
at any time following the time that the SEC qualifies the Company’s offering statement related to the Company’s planned
offering of Company Common Stock pursuant to Regulation A under the Securities Act of 1933, as amended (the “Regulation
A Offering”). At such time, the April 2021 GS Capital Note #2 (and the principal amount and any accrued and unpaid interest)
will be convertible at a conversion price equal to 70% of the initial offering price of the Company Common Stock in the Regulation
A Offering, subject to a customary beneficial ownership limitation of 9.99%, which may be waived by GS Capital on 61 days’
notice to the Company. The conversion price is subject to customary adjustments for any stock splits, etc. which occur following
the determination of the conversion price.
The
April 2021 GS Capital Note #2 contains customary events of default, including, but not limited to:
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if
the Company fails to pay the then-outstanding principal amount and accrued interest on the April 2021 GS Capital Note #2 on
any date any such amounts become due and payable, and any such failure is not cured within three business days of written
notice thereof by GS Capital; or
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the
Company fails to remain compliant with the Depository Trust Company (“DTC”), thus incurring a “chilled”
status with DTC; or
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any
trading suspension is imposed by the SEC under Section 12(j) of the Exchange Act or Section 12(k) of the Exchange Act; or
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the
occurrence of any delisting of the Company Common Stock from any securities exchange on which the Company Common Stock is
listed or suspension of trading of the Company Common Stock on the OTC Markets.
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If
an event of default has occurred and is continuing, GS Capital may declare all or any portion of the then-outstanding principal
amount of the April 2021 GS Capital Note #2, together with all accrued and unpaid interest thereon, due and payable, and the April
2021 GS Capital Note #2 shall thereupon become immediately due and payable in cash and GS Capital will also have the right to
pursue any other remedies that GS Capital may have under applicable law. In the event that any amount due under the April 2021
GS Capital Note #2 is not paid as and when due, such amounts shall accrue interest at the rate of 18% per year, simple interest,
non-compounding, until paid.
The
foregoing description of the Securities Purchase Agreement and April 2021 GS Capital Note #2 does not purport to be complete and
is qualified in its entirety by reference to the full texts of the Securities Purchase Agreement and the April 2021 GS Capital
Note #2, copies of which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As
disclosed in Item 1.01 of this Current Report on Form 8-K, the Company issued he April 2021 GS Capital Note #2. The disclosure
in Item 1.01 hereof concerning each of these notes is incorporated by reference into this Item 2.03.
Item 2.04 Triggering
Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
As disclosed in the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 15, 2021, on March 11, 2021, the Company entered
into a securities purchase agreement (the “Labrys SPA”) with Labrys Fund, LP (“Labrys”), pursuant to which the
Company issued a 10% promissory note (the “Labrys Note”) with a maturity date of March 11, 2022 (the “Labrys Maturity
Date”), in the principal sum of $1,000,000. Pursuant to the terms of the Labrys Note, the Company agreed to pay to $1,000,000 (the
“Principal Sum”) to Labrys and to pay interest on the principal balance at the rate of 10% per annum.
In addition, the Labrys Note provides that, if
(i) the Labrys Note is still outstanding; and (ii) since the issuance of the Labrys Note, the Company has received cash proceeds from
any source of series of sources of $1,500,000, then Labrys shall have the right to require the Company to apply up to 50% of any future
proceeds received by the Company to repay the outstanding balance of the Labrys Note.
Upon the receipt of the $500,000 in proceeds from
the issuance April 2021 GS Capital Note #2, the Company has now raised over $1,500,000 since the issuance of the Labrys Note on March
11, 2021, and therefore, Labrys has the right to demand up to 50% of the proceeds received by the Company from the issuance of the April
2021 GS Capital Note #2 – or a maximum of $250,000.
As of the date of this report, Labrys has made
a demand for $250,000, which the Company will pay from the proceeds of the April 2021 GS Capital Note #2.
The foregoing description of the Labrys Note does
not purport to be complete and is qualified in its entirety by reference to the full text of the Labrys Note, a copy of which is filed
as Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on
March 15, 2021.
Item
9.01 Financial Statement and Exhibits.
(d)
Exhibits
The
following exhibits are filed or furnished with this Current Report on Form 8-K:
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date:
May 5, 2021
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CLUBHOUSE
MEDIA GROUP, INC.
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By:
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/s/
Amir Ben-Yohanan
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Amir
Ben-Yohanan
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Chief
Executive Officer
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Clubhouse Media (PK) (USOTC:CMGR)
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