PHCG Pure Harvest Corporate Group Inc (PK)

Item 1.01 Entry into a Material Definitive Agreement.

On August 26, 2021, Pure Harvest Corporate Group, Inc. (the “Company”) completed the sale of a Promissory Note in the principal amount of $400,000 (the “Note”) to AJB Capital Investments, LLC (the “Purchaser”) for a purchase price of $376,000, in a private transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D promulgated thereunder. The Purchaser was an accredited or otherwise sophisticated investor who had access to business and financial information on the Company. The Company paid Purchaser’s legal fees of $10,000 and $8,000 in finder’s fees in connection with the sale of the Note. After payment of the legal fees and finder’s fees and closing cost, the sale of the Note resulted in $358,000 in net proceeds to the Company. The net proceeds from the sale will be used for working capital.

The Note matures on February 25, 2022 (the “Maturity Date”), bears interest at a rate of 5% per annum for the first three months and 10% per annum thereafter, and, following an event of default only, is convertible into shares of the Company’s common stock at a conversion price equal to the lesser of 90% of the lowest trading price during (i) the 20 trading day period preceding the issuance date of the note, or (ii) the 20 trading day period preceding date of conversion of the Note. The Note is also subject to covenants, events of defaults, penalties, default interest and other terms and conditions customary in transactions of this nature.

Pursuant to the terms of the Securities Purchase Agreement (the “SPA”), the Company paid a commitment fee to the Purchaser in the amount of $220,000 (the “Commitment Fee”) in the form of 440,000 shares of the Company’s common stock (the “Commitment Fee Shares”). During the six-month period following the six-month anniversary of the closing date, the Purchaser shall be entitled to be issued additional shares of common stock of the Company to the extent the Purchaser’s sale of the Commitment Fee Shares results in net proceeds to the Purchaser of an amount less than the Commitment Fee. If the Company repays the Note on or before the Maturity Date, the Company may redeem 220,000 of the Commitment Fee Shares at a total redemption price of $1.00.