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Item
1.01
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Entry
into a Material Definitive Agreement
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Securities
Purchase Agreement and Convertible Promissory Note with Power Up Lending Group Ltd.
On
October 17, 2019, Visium Technologies, Inc. a Florida corporation (the “Company”) entered into a securities purchase
agreement (the “SPA”) with Power Up Lending Group Ltd., a Virginia corporation (the “Investor” or “Power
Up”), pursuant to which the Company agreed to issue to the Investor a 12% Convertible Promissory Note, (the “Note”)
in the principal amount of $48,000 in exchange for a purchase price of $45,000. The Note was funded by the Investor on October
24, 2019, and on such date pursuant to the SPA, the Company reimbursed the Investor for expenses for legal fees and due diligence
of $3,000. The Note proceeds will be used by the Company for general working capital purposes. The SPA includes customary representations,
warranties and covenants by the Company and customary closing conditions.
The
Note matures 12 months after the date of issuance. The Note is convertible into shares of the Company’s common stock beginning
on the date which is 180 days from the issuance date of the Note, at a conversion price equal to 61% multiplied by the lowest
trading price, as such term is defined in the Note, during the 20 trading day period ending on the last complete trading day prior
to the date of conversion, provided, however, that the Investor may not convert the Note to the extent that such conversion would
result in the Investor’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s
issued and outstanding common stock. The beneficial ownership limitation may not be waived by the Investor.
The
Note carries a pre-payment penalty if the Note is paid off in 30, 60, 90,120,150, or 180 days following the issue date. The pre-payment
penalty is based on the then-outstanding principal at the time of payoff, plus accrued and unpaid interest, multiplied by 120%,
125%, 130%, 135%, 140%, and 145% respectively. After the expiration of 180 days following the issue date, the Company shall have
no right of prepayment.
Pursuant
to the Note, during any period where funds are owed under the Note, if the Company enters into any future financing transactions
with a third party investor, excluding certain exempted issuances listed in the Note, the Company will be required to give notice
of same to the Investor at least 10 days prior to closing of such future financing, and in the event that the Investor determines
that the terms of the subsequent investment are preferable to the terms of the securities issued to the Investor pursuant to the
terms of the SPA, the Company will have to amend and restate the securities issued to the Investor pursuant to the SPA (which
may include the conversion terms of the Note), to be identical to the instruments evidencing the subsequent investment.
The
foregoing descriptions of the SPA and the Note do not purport to be complete and are qualified in their entirety by reference
to the full text of the SPA and the Note, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report
on Form 8-K and incorporated by reference herein.