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 August 22, 2023 (the “Issue Date”), Kisses from Italy, Inc., a Florida corporation (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Coventry Enterprises, LLC, (the “Buyer”), pursuant to which the Company issued to the Buyer a 10% promissory note in the principal amount of $115,000.00 (the “Note”). The Company received $105,000.00 gross proceeds from the Buyer due to the original issue discount on the Note of $10,000. In connection with the execution and delivery of the Purchase Agreement and the issuance of the Note, the Company issued to the Buyer 500,000 commitment shares (the “Commitment Shares”) and a warrant to purchase an additional 862,500 shares of common stock of the Company (the “Warrant”) at an exercise price of $0.10 per share (the “Exercise Price”). In addition to the Commitment Shares, the Company issued 1,500,000 returnable shares to the Buyer (the “Returnable Shares”), which are held in book-entry and returnable to the Company by the Buyer unless there is an uncured default during the 12-month term of the Note.
The Note bears interest at a rate of 10% per annum, at a fixed conversion price of $0.01 (the “Conversion Price”) and is due and payable no later than August 22, 2024. Interest on the Note is payable in shares of the Company’s common stock (the “Common Stock”) commencing on the Issue Date. The Note and all accrued interest on the Note may be prepaid in whole or in part without premium or penalty of any type.
The Note can be accelerated upon the occurrence of an event of default, which shall occur, among other events, (i) if the Company defaults in the payment of principal or interest on the Note or any other note issued to the Buyer by the Company, (ii) if a majority of the members of the board of directors of the Company on the Issue Date are no longer serving as members of the board, (iii) the Company is not current in its filings with the Securities and Exchange Commission, (iv) if the Common Stock are delisted from an exchange (including the OTC Market exchange), or if the Common Stock trades on an exchange, and trading in the Common Stock is suspended for more than 10 consecutive days, or (v) the Company ceases to file its reports under the Securities Act of 1933, as amended (the “Act”). Upon an event of default, interest on the Note shall accrue at a default interest rate of 24% per annum, and the Conversion Price shall decrease from $.01 per share to $0.005 per share.
The Warrant provides for the purchase of up to 862,500 shares of the Common Stock (the “Warrant Shares”) at the Exercise Price and is exercisable at any time on or after the Issue Date and terminating on the five-year anniversary of the Issue Date. The Warrant may be exercised, in whole or part, on a cashless basis unless a registration statement covering the Warrant Shares is effective at the time of exercise, entitling the Buyer to receive the number of shares calculated based on the closing price of the Common Stock immediately preceding the date on which the Buyer elects to a cashless exercise of the Warrant at the Exercise Price, as adjusted.
The Company’s sales of shares of Common Stock to the Buyer under the Purchase Agreement is limited to no more than the number of shares that would result in the beneficial ownership by the Buyer and its affiliates, at any single point in time, of more than 4.99% of the then outstanding shares of the Common Stock.
The Company and the Buyer made certain representations and warranties to each other that are customary for transactions similar to this one, subject to specified exceptions and qualifications.
The foregoing descriptions of the Purchase Agreement, the Note, and the Warrant are qualified in their entirety by reference to the full text of the Purchase Agreement, the Note, and the Warrant, copies of which are attached hereto as Exhibits 10.26, 4.16, and 4.17, respectively, each of which is incorporated herein in its entirety by reference.
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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.
Item 3.02. Unregistered Sales of Equity Securities.
The issuance and sale of the Note, the Warrant, and the Commitment Shares and Returnable Shares by the Company to the Buyer was made without registration under 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 the Buyer to the Company that, among others, it is an accredited investor (as that term is defined in Rule 501(a) of Regulation D), and that it was purchasing the shares for its own account and without a view to distribute them.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description |
| 4.16 | |
| 4.17 | |
| 10.26 | |
| 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 thereunto duly authorized.
| Date: August 28, 2023 |
KISSES FROM ITALY INC.
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| By: | /s/ Claudio Ferri | |
| Name: Title: |
Claudio Ferri Co-Chief Executive Officer | |
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