UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Section 1 - Registrant’s Business and Operations
Item 1.01 Entry into a Material Agreement
On May 11, 2022, Kisses from Italy, Inc., a Florida corporation (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Fourth Man, LLC, a Nevada limited liability company (“Fourth Man”), pursuant to which the Company issued to Fourth Man a promissory note in the principal amount of $150,000.00 (the “Note”). The Company received $135,000 gross proceeds from Fourth Man due to the original issue discount on the Note. In connection with the execution and delivery of the Purchase Agreement and the issuance of the Note, the Company issued to Fourth Man 607,000 commitment shares (the “Commitment Shares”) and a warrant to purchase an additional 1,500,000 shares of common stock of the Company (the “Warrant”).
Pursuant to the Purchase Agreement, Fourth Man was granted a right of first refusal on all issuances by the Company, as well as a most favored nations on all securities to be issued by the Company until the Note is paid in full. The Company also agreed with Fourth Man that it will not enter into any credit equity line agreements. Pursuant to the Note, the Company agreed not to incur any additional unsecured debt which is senior or pari passu to the indebtedness evidenced by the Note, other than the issuances of notes in the principal amount of up to $850,000 in the aggregate by the Company. The Company and Fourth Man made certain customary representations and warranties, subject to specified exceptions and qualifications.
The Note bears interest at a rate of 12% per annum and is due and payable no later than 12 months from the issue date of the Note. Although the Company has the right to prepay the Note without penalty, the annual interest is due if the Note is paid in full after November 11, 2022 by the Company prior to maturity. Upon default of the Note, the interest increases to 16%.
The Note is convertible at a fixed conversion price of $0.025 (the “Conversion Price”), subject to standard adjustments. If the Company issues securities for less than the Conversion Price, the Conversion Price shall be reduced to such amount.
The Warrant issued to Fourth Man provides for the purchase of up to 1,500,000 shares of the Company’s common stock (the “Warrant Shares”) at an exercise price of $0.10 per share. The Warrant is exercisable on the earlier of 180 days from the date it was issued or when the registration statement covering the Warrant Shares is declared effective. The Warrant may be exercised on a cashless basis unless a registration statement covering the Warrant Shares has been declared effective at the time of exercise, and the number of Warrant Shares is subject to customary adjustments.
Pursuant to the terms of a Registration Rights Agreement dated May 11, 2022, by and between the Company and Fourth Man (the “Registration Rights Agreement”), the Company agreed to file a registration statement with the Securities and Exchange Commission within 90 days with respect to the shares of common stock issuable to Fourth Man pursuant to the conversion of the Note, the Warrant Shares and the Commitment Shares. If the registration statement is not declared effective within 180 days, the Note shall be in default.
The Company’s sales of shares of common stock to Fourth Man under the agreements described herein are limited to no more than the number of shares that would result in the beneficial ownership by Fourth Man and its affiliates, at any single point in time, of more than 4.99% of the then outstanding shares of the Company’s common stock.
The foregoing descriptions of the Purchase Agreement, the Note, the Warrant, and the Registration Rights Agreement are qualified in their entirety by reference to the full text of the Purchase Agreement, the Note, the Warrant, and the Registration Rights Agreement, copies of which are attached hereto as Exhibits 4.1, 4.2, 10.1, and 10.2, each of which is incorporated herein in its entirety by reference.
Item 2.03. Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
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Item 3.02. Unregistered Sales of Equity Securities.
The issuance and sale of the Note, the Warrant, and the Commitment Shares by the Company to Fourth Man was made without registration under the Securities Act of 1933, as amended (the “Act”), or the securities laws of the applicable state, in reliance on the exemptions provided by Section 4(2) of the Act and Regulation D promulgated thereunder, and in reliance on similar exemptions under applicable state law, based on the offering of such securities to one investor, the lack of any general solicitation or advertising in connection with such issuance, the representations of Fourth Man to the Company that, among others, that Fourth Man is an accredited investor (as that term is defined in Rule 501(a) of Regulation D), and that Fourth Man was purchasing the shares for its own account and without a view to distribute them.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibits Number | Description |
| 4.1 | Promissory Note, dated May 11, 2022, issued by Kisses from Italy, Inc. to Fourth Man, LLC |
| 4.2 | Common Stock Purchase Warrant, dated May 11, 2022, issued by Kisses from Italy, Inc. to Fourth Man, LLC |
| 10.1 | Securities Purchase Agreement, dated May 11, 2022, by and between Kisses from Italy, Inc. and Fourth Man, LLC |
| 10.2 | Registration Rights Agreement, dated May 11, 2022, by and between the Kisses from Italy, Inc. and Fourth Man, LLC |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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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 hereunto duly authorized.
| Date: May 17, 2022 | |||
| By: | /s/ Claudio Ferri | ||
| Name: | Claudio Ferri | ||
| Title: | Co- Chief Executive Officer | ||
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