Item 1.01. Entry into a Material Definitive Agreement.
Exchange Agreement
On June 29, 2022, Clubhouse Media Group,
Inc. (the “Company”) entered into an Exchange Agreement (the “Exchange Note”) with GS Capital Partners,
LLC (“GS Capital”).
The Exchange Note amended and restated in its entirety
the previous Note Purchase Agreement between the same parties, which was executed on February 19, 2021, and was filed as an exhibit to
the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on February 25, 2021.
The
Exchange Note replaces the Note Purchase Agreement in its entirety, which was a promissory note carrying an outstanding
amount of $577,778. The Exchange Note is thus a new note in the amount of $635,563.48, with a conversion price equal to
85% of the closing per share trading price of the Company’s shares of common stock, $0.000001
par value per share (“Common Stock”) on the last trading day
prior to the delivery of the notice of conversion, as reported on the National Quotations Bureau OTC Market exchange which
the Company’s shares are traded.
In consideration of the Exchange Note, GS Capital
agreed to convert a convertible promissory, dated November 26, 2021, in the aggregate principal
amount of $300,445 (the “Converted Note”), at the conversion price of $1.00. The Converted Note was previously disclosed
in a Current Report on Form 8-K filed with the SEC on December 2, 2021 by the Company.
Amendment No. 2 to Convertible Promissory
Note
As previously
disclosed in a Current Report on Form 8-K filed with the SEC on February 3, 2022 by the Company, on January 28, 2022, the Company
entered into Amendment No. 1 to Convertible Promissory Note, dated as of January 25, 2022 (the “Note Amendment 1”) with Tiger
Trout Capital Puerto Rico, LLC (“Tiger Trout”), which amended a convertible promissory note in the aggregate principal amount
of $1,540,000 for a purchase price of $1,100,000, reflecting a $440,000 original issue discount (the “Tiger Trout Note”).
On June 29, 2022, the parties
to the Note Amendment 1 and Tiger Trout Note entered into Amendment No. 2 to Convertible Promissory Note, dated as of June 29, 2022 (the
“Note Amendment 2”). Pursuant to the terms of the Note Amendment 2:
| |
(i) |
the principal amount of the
Tiger Trout Note was amended to be $1,250,000; and |
| |
(ii) |
Section 3(c) of the Tiger
Trout Note was amended and restated in its entirety to provide a conversion price equal to 85% of the closing per share trading
price of the Company’s Common Stock on the last trading day prior to the delivery of the notice of conversion,
as reported on the National Quotations Bureau OTC Market exchange which the Company’s shares are traded. |
Amendment No. 3 to Convertible Promissory Note
On June 30,
2022, the parties to the Note Amendment 2, Note Amendment 1 and Tiger Trout Note entered into Amendment No. 3 to Convertible Promissory
Note, dated as of June 30, 2022 (the “Note Amendment 3”). Pursuant to the terms of the Note Amendment 3, the Tiger Trout
Note was amended as follows:
| (i) | the
principal amount of the Tiger Trout Note was amended to be $1,115,000; and |
| |
(ii) |
Notwithstanding anything to the contrary in the Tiger Trout Note, the
parties acknowledge and agree that Tiger Trout may elect to convert the Tiger Trout Note into “Conversion Shares” at any
time at the election of Tiger Trout, subject to the other limitations and requirements of the Tiger Trout Note, and the “Conversion
Period” (as defined in the Tiger Trout Note) is amended to be the period from June 30, 2022 to the date of full repayment of all
Indebtedness (as defined in the Tiger Trout Note).
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The
foregoing description of the terms of the Exchange Note, Note Amendment 2 and Note Amendment 3 do not purport to be complete and is subject
to, and is qualified in its entirety by, reference to the Exchange Note, Note Amendment 2 and Note Amendment 3, copies of which are filed
as Exhibits 10.1, 10.2 and 10.3 and are incorporated by reference.