______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 6, 2020
CLOUDCOMMERCE, INC.
(Exact name of registrant as specified in its
charter)
|
Nevada
|
000-13215
|
30-0050402
|
|
(State or other jurisdiction of incorporation
or organization)
|
(Commission File Number)
|
IRS Employer Identification No.)
|
|
321 Sixth Street
San Antonio, TX
|
78215
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(805) 964-3313
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|
Tile of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
N/A
|
N/A
|
N/A
|
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter)
Emerging Growth Company ¨
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry into a Material Definitive
Agreement
On January 17, 2020, CloudCommerce,
Inc. (the “Company”) entered into an Exchange Agreement (the “Exchange Agreement”) with Bountiful Capital,
LLC, a Nevada limited liability company, (the “Investor”), pursuant to which the parties agreed that the Investor shall
tender certain outstanding promissory notes to the Company for cancelation in exchange for 2,597 shares of the Company’s
Series G Preferred Stock (the “Series G Preferred Stock”), $0.001 par value per share. The parties closed on the Exchange
Agreement on February 6, 2020.
The securities above were
offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933,
as amended, since, among other things, the transactions did not involve a public offering of the securities.
This description of the
Exchange Agreement is only a summary and is qualified in its entirety by reference to the full text of the Exchange Agreement attached
as Exhibit 10.1 hereto.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth
in Item 1.01 is incorporated by reference herein.
As previously reported,
the Company entered into securities purchase agreements pursuant to which it issued convertible notes to various accredited investors,
which notes are convertible into shares of the Company’s common stock on the terms and subject to the conditions set forth
in the various securities purchase agreements and associated notes. Certain accredited investors converted an aggregate of $30,707.40
in principal, interest and fees resulting in the issuance of an aggregate of 28,200,000 shares of the Company’s common stock.
The securities above were
offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933,
as amended, since, among other things, the transactions did not involve a public offering of the securities.
Item 5.03 Amendments to Articles of Incorporation
or Bylaws; Change in Fiscal Year
On February 6, 2020, the
Company filed a Certificate of Designation (the “Certificate of Designation”) of Series G Preferred Stock with the
Secretary of State of Nevada. The Certificate of Designation designates 2,600 shares of the Company’s authorized preferred
stock as Series G Preferred Stock.
Each share of Series G
Preferred Stock has a stated value of $100. The Series G Preferred Stock is convertible into shares of the Company’s common
stock at a conversion price of $0.0019 per share, subject to adjustment. The Series G Preferred Stock may not be converted to common
stock to the extent such conversion would result in the holder beneficially owning more than 4.99% of the Company’s outstanding
common stock; provided, however, that the 4.99% beneficial ownership limitation may be waived by a holder of Series G Preferred
Stock upon not less than 61 days’ prior notice to the Company. The holders of outstanding shares of Series G Preferred Stock
are not entitled to receive dividends. The holders of the Series G Preferred Stock are entitled to a liquidation preference in
an amount equal to $100 per share before any payments to holders of common stock; however, such liquidation preference shall rank
junior to all outstanding shares of the Company’s Series A, B, C and D Preferred Stock. The Series G Preferred Stock has
no preemptive or subscription rights, and there is no sinking fund provisions applicable to the Series G Preferred Stock. The Series
G Preferred Stock does not have voting rights, except as required by law and with respect to certain protective provisions set
forth in the Certificate of Designation.
This description of the
Certificate of Designation is only a summary and is qualified in its entirety by reference to the full text of the Certificate
of Designation attached as Exhibit 3.1 hereto.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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.
|
|
|
|
CLOUDCOMMERCE, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: February 12, 2020
|
|
By:
|
/s/ Andrew Van Noy
|
|
|
|
|
|
|
Name: Andrew Van Noy
|
|
|
|
|
|
|
Title: Chief Executive Officer
|
EXHIBIT 3.1
CERTIFICATE OF DESIGNATION
OF
CLOUDCOMMERCE, INC.
1. The name of the
corporation is CloudCommerce, Inc., a Nevada corporation (the “Corporation”).
2. By resolution
of the board of directors pursuant to a provision in the articles of incorporation of the Corporation, this certificate establishes
the following regarding the voting powers, designations, preferences, limitations, restrictions and relative rights of the following
class or series of stock.
This series of the Corporation’s
Preferred Stock shall be designated "Series G Preferred Stock". The number of shares constituting the Series G Preferred
Stock shall be two thousand six hundred (2,600) shares. The total face value of this entire series is two hundred sixty thousand
dollars ($260,000). Each share of Series G Preferred Stock shall have a stated face value of One Hundred Dollars ($100.00) (“Face
Value”), and is convertible into shares of fully paid and non-assessable shares of common stock (“Common Stock”)
of the Corporation in accordance with Section 3 below. The Series G Preferred Stock shall have the rights, preferences and privileges
set forth below:
Section
1. Dividends. Except as required by applicable law, no dividends will be payable on the Series G Preferred Stock.
Section
2. Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary
or involuntary, the holder of each outstanding share of the Series G Preferred Stock (the “Holder”) shall be entitled
to receive, out of the assets of the Corporation available for distribution to its shareholders upon such liquidation, whether
such assets are capital or surplus of any nature, an amount equal to One Hundred Dollars ($100.00) for each such share of the
outstanding Series G Preferred Stock held by such Holder (as adjusted for any combinations, consolidations, stock distributions
or stock dividends with respect to such shares), plus all dividends, if any, declared and unpaid thereon as of the date of such
distribution, before any payment shall be made or any assets distributed to the holders of the Common Stock, and, after such payment,
the remaining assets of the Corporation shall be distributed to the holders of Common Stock.
(a) If
the assets to be distributed pursuant to this Section 2 to the holders of the Series G Preferred Stock shall be insufficient
to permit the receipt by such holders of the full preferential amounts aforesaid, then all of such assets shall be distributed
among such holders of Series G Preferred Stock ratably in accordance with the number of such shares then held by each such holder.
Section 3. Conversion.
The Series G Preferred Stock shall be subject to conversion into Common Stock upon the following terms and conditions:
|
|
(a)
|
Timing and Mechanics of Conversion.
|
|
|
|
The Holder may convert shares of Series
G Preferred Stock held by such Holder into shares of Common Stock. The conversion price shall be $0.0019 per share (the “Conversion
Price”), subject to adjustments described in Section 3. The number of shares of Common Stock receivable upon conversion of
one share of Series G Preferred Stock equals the Face Value divided by the then Conversion Price. A conversion notice (the “Conversion
Notice”) may be delivered to Corporation by method of Holder’s choice (including but not limited to email, facsimile,
mail, overnight courier, or personal delivery), and all conversions shall be cashless and not require further payment from the
Holder. If no objection is delivered from the Corporation to the Holder, with respect to any variable or calculation reflected
in the Conversion Notice within 48 hours of delivery of the Conversion Notice, the Corporation shall have been thereafter deemed
to have irrevocably confirmed and irrevocably ratified such notice of conversion and waived any objection thereto. The Corporation
shall deliver the shares of Common Stock from any conversion to the Holder within three (3) business days of Conversion Notice
delivery. If the Corporation is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer
(“FAST”) program, then upon request of the Holder and provided that the shares to be issued are eligible for transfer
under Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), or are effectively registered under
the Securities Act, the Corporation shall cause its transfer agent to electronically issue the Common Stock issuable upon conversion
to the Holder through the DTC Direct Registration System (“DRS”). If the Corporation is not participating in the DTC
FAST program, then the Corporation agrees in good faith to apply and cause the approval for participation in the DTC FAST program.
.
|
|
|
|
|
|
|
|
|
(b)
|
Limitation of Conversions. In
no event shall the Holder be entitled to convert any Series G Preferred Stock, such that upon conversion of which the sum of (1)
the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which
may be deemed beneficially owned through the ownership of the unconverted portion of this Series G Preferred Stock or the unexercised
or unconverted portion of any other security of the Corporation subject to a limitation on conversion or exercise analogous to
the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of Series G Preferred
Stock with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1)
of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election
of the Holder, not less than 61 days prior notice to the Corporation, and the provisions of the conversion limitation shall continue
to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver).
|
|
|
(c)
|
Adjustment to Conversion Price for
Stock Dividends, Consolidations and Subdivisions. In case the Corporation at any time after the first issuance of a share of
the Series G Preferred Stock shall declare or pay on the Common Stock any dividend in shares of Common Stock, or effect a subdivision
of the outstanding shares of the Common Stock into a greater number of shares of the Common Stock (by reclassification or otherwise
than by payment of a dividend payable in shares of the Common Stock), or shall combine or consolidate the outstanding shares of
the Common Stock into a lesser number of shares of the Common Stock (by reclassification or otherwise), then, and in each such
case, the Conversion Price (as previously adjusted) in effect immediately prior to such declaration, payment, subdivision, combination
or consolidation shall, concurrently with the effectiveness of such declaration, payment, subdivision, combination or consolidation,
be proportionately adjusted.
|
|
|
(d)
|
Adjustments for Reclassifications
and Certain Reorganizations. In case the Corporation at any time after the first issuance of a share of the Series G Preferred
Stock shall reclassify or otherwise change the outstanding shares of the Common Stock, whether by capital reorganization, reclassification
or otherwise, or shall consolidate with or merge with or into any other corporation where the Corporation is not the surviving
corporation but not otherwise, then, and in each such case, each outstanding share of the Series G Preferred Stock shall, immediately
after the effectiveness of such reclassification, other change, consolidation or merger, be convertible into the type and amount
of stock and other securities or property which the holder of that number of shares of the Common Stock into which such share of
the Series G Preferred Stock would have been convertible before the effectiveness of such reclassification, other change, consolidation
or merger would be entitled to receive in respect of such shares of the Common Stock as the result of such reclassification, other
change, consolidation or merger.
|
|
|
(e)
|
Fractional Shares. No fractional
shares of the Common Stock shall be issuable upon the conversion of shares of the Series G Preferred Stock and the Corporation
shall pay the cash equivalent of any fractional share upon such conversion.
|
|
|
(f)
|
Reservation of Stock Issuable Upon
Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of the
Common Stock, solely for the purpose of effecting the conversion of the Series G Preferred Stock, such number of shares of the
Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series G Preferred
Stock (the “Reserve Shares”); and if at any time the number of authorized but unissued shares of the Common Stock shall
not be sufficient to effect the conversion of all outstanding shares of the Series G Preferred Stock, the Corporation will take
such corporate action as is necessary to increase its authorized by unissued shares of the Common Stock to such number of shares
as shall be sufficient for such purpose. The Holder shall have the right to directly instruct the Corporation’s transfer
agent to explicitly reserve the Reserve Shares from the Corporation’s authorized shares of Common Stock, solely for satisfying
the conversion of the Series G Preferred Stock.
|
|
|
(g)
|
Transfer Agent Instructions. The
Holder shall have the right to directly instruct the Corporation’s transfer agent to explicitly reserve the Reserve Shares
from the Corporation’s authorized shares of Common Stock, solely for satisfying the conversion of the Series G Preferred
Stock. In the event that an opinion of counsel, such as but not limited to a Rule 144 opinion, is needed for any matter related
to this Series G Preferred Stock or the Common Stock, the Holder has the right to have any such opinion provided by its own counsel.
|
Section 4. Notices.
Any notice required by the provisions of this Certificate of Designation to be given to holders of shares of the Series G Preferred
Stock shall be deemed given three days following the date on which mailed by certified mail, return receipt requested, postage
prepaid, addressed to such holder at the address last appearing on the books of the Corporation for such holder or given by such
holder to the Corporation for the purpose of notice, or if no such address appears or is so given, at the principal office of the
Corporation, or upon personal delivery to the aforementioned address.
Section 5. Voting
Rights. Except as required by law or as specifically provided herein, the Holders of Series G Preferred shall not be entitled
to vote, as a separate class or otherwise, on any matter presented to the stockholders of the Corporation for their action or consideration
at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting); provided, however,
that each Holder of outstanding shares of Series G Preferred shall be entitled, on the same basis as holders of Common Stock, to
receive notice of such action or meeting.
Section 6. Protective
Provisions. So long as any shares of the Series G Preferred Stock shall remain outstanding, the Corporation shall not,
without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of
the then outstanding shares of Series G Preferred Stock voting together as one class alter or change the rights, preferences or
privileges of the shares of the Series G Preferred Stock so as to affect materially and adversely such shares; or
The Corporation
hereby covenants and agrees that the Corporation will not, by amendment of its Certificate of Incorporation, bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of
Designation, and will at all times carry out all the provisions of this Certificate of Designation and take all action as may be
required to protect the rights of the Holders.
Section 7. Status
of Converted Stock. In the event any shares of the Series G Preferred Stock shall be converted pursuant to Section 3
above, the shares so converted shall be cancelled and shall revert to the Corporation's authorized but unissued Preferred Stock.
Section 8. Transferability.
This Series G Preferred Stock shall be transferable and may be assigned by the Holder, to anyone of its choosing without Corporation’s
approval subject to applicable securities laws. Lender covenants not to engage in any unregistered public distribution of the Series
G Preferred Stock when making any assignments.
Section 9. Notices.
Any notice required hereby to be given to the holders of shares of the Series G Preferred Stock shall be deemed given if deposited
in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the
books of the Corporation for such holder or given by such holder to
the Corporation for the purpose of notice,
or if no such address appears or is so given, at the principal office of the Corporation, or upon personal delivery to the aforementioned
address.
Section 10. Public
Disclosure. The Corporation and the Holder agree not to issue any public statement with respect to the Holder’s investment
or proposed investment in the Corporation’s Series G Preferred Stock, or the terms of any agreement or covenant without the
other party’s prior written consent, except such disclosures as may be required under applicable law or under any applicable
order, rule or regulation.
Section 11. Miscellaneous.
(a) The
headings of the various sections and subsections of this Certificate of Designation are for convenience of reference only and shall
not affect the interpretation of any of the provisions of this Certificate of Designation.
(b) Whenever
possible, each provision of this Certificate of Designation shall be interpreted in a manner as to be effective and valid under
applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced
by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating or otherwise adversely affecting the remaining provisions of this Certificate of Designation. No provision
herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction
should determine that a provision of this Certificate of Designation would be valid or enforceable if a period of time were extended
or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid
under applicable law.
(c) Except
as may otherwise be required by law, the shares of the Series G Preferred Stock shall not have any powers, designations, preferences
or other special rights, other than those specifically set forth in this Certificate of Designation.
(d) Notwithstanding
anything to the contrary herein, with respect to payment of dividends and distribution of assets upon liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, all shares of Series G Preferred Stock shall rank junior to
all outstanding shares of Series A and B, C and D Preferred Stock.
IN WITNESS WHEREOF,
this Certificate of Designation has been executed by a duly authorized officer of the Corporation on this 17th day of
January, 2020.
CLOUDCOMMERCE, INC.
|
By:
|
/s/ Andrew Van Noy
|
|
|
|
Name: Andrew Van Noy
|
|
|
|
Title: President and Chief Executive Officer
|
|
Exhibit 10.1
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT
(“Agreement”) is entered into as of January 17, 2020, by and between CloudCommerce, Inc., a Nevada corporation (the
“Company”), and Bountiful Capital, LLC, a Nevada limited liability company, (the “Investor”), with respect
to the following facts:
R E C I T A L S
A. The
Company entered into loan transactions with the Investor in the aggregate principal amount of $240,500.00, as described
below, which were evidenced by certain promissory Demand Notes (the “Notes”), copies of which are attached hereto as
Exhibit A.
|
Effective Date
|
|
Annual Interest
|
|
Outstanding Principal Balance
|
|
November 30, 2017
|
|
|
5
|
%
|
|
$
|
30,000.00
|
|
January 30, 2018
|
|
|
5
|
%
|
|
|
72,000.00
|
|
|
February 2, 2018
|
|
|
5
|
%
|
|
|
85,000.00
|
|
|
July 23, 2019
|
|
|
5
|
%
|
|
|
25,000.00
|
|
|
August 20, 2019
|
|
|
5
|
%
|
|
|
10,000.00
|
|
|
August 28, 2019
|
|
|
5
|
%
|
|
|
18,500.00
|
|
|
|
|
|
|
|
|
$
|
240,500.00
|
|
B. The
Notes are demand notes, which allow the Investor to demand immediate and full payment at any time. The total accrued interest on
the Notes is $19,198.00. The Investor desires to tender the Notes to the Company for cancellation, including all outstanding principal,
in exchange for the issuance by the Company to the Investor 2,597 shares of Series G preferred stock, which may, at the option
of the Investor, be converted into shares of the Company’s common stock pursuant to the certificate of designation of the
Series G preferred stock (the “Convertible Preferred Stock”).
C. The
Company desires to issue the Convertible Preferred Stock to the Investor in exchange for the cancellation of the Notes.
D. The
closing of the transactions contemplated by this Agreement (the “Closing”) will be deemed to have occurred upon the
completion of the deliveries by each Party to this Agreement described in Section 2 of this Agreement.
NOW, THEREFORE,
for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged by the parties to this Agreement,
and in light of the recitals stated above, the parties to this Agreement hereby agree as follows:
Section 1. EXCHANGE OF THE
NOTES FOR THE CONVERTIBLE PREFERRED STOCK
The Investor agrees
to tender the Demand Notes to the Company for cancellation in exchange for which the Company agrees to issue the Convertible
Preferred Stock to the Investor. The Investor agrees that upon delivery of the Convertible Preferred Stock to the Investor,
the Notes shall be deemed
fully paid and satisfied, null and void
and no interest, fees or principal shall be due thereon. In the event the Notes are lost or destroyed, the Investor hereby warrants
that the Notes are lost or destroyed and agrees to immediately surrender to the Company said Notes should it later be found and
the Investor shall provide the Company with an affidavit of loss of said Notes. The Investor hereby agrees to indemnify and hold
harmless the Company and its affiliates against all liability, costs, damages, claims or expenses which may be incurred by any
of them as a result of any claim to ownership of the lost Notes asserted by the Investor or by anyone other than Investor.
Section 2. DELIVERIES
2.1 The
Company. The Company will issue the Convertible Preferred Stock upon the execution of this Agreement.
2.2 The
Investor. The Investor will deliver the Notes or an affidavit that said Notes are lost upon the execution of this Agreement.
The Investor also agrees to deliver any other document reasonably requested by the Company that it deems necessary for the consummation
of the transactions contemplated by this Agreement.
Section 3. EQUITABLE
Relief.
3.1 Damages
Inadequate. Each party acknowledges that it would be impossible to measure in money the damages to the other party if there
is a failure to comply with any covenants or provisions of this Agreement, and agrees that in the event of any breach of any covenant
or provision, the other party to this Agreement will not have an adequate remedy at law.
3.2 Equitable
Relief. It is therefore agreed that the other party to this Agreement who is entitled to the benefit of the covenants or provisions
of this Agreement which have been breached, in addition to any other rights or remedies which they may have, shall be entitled
to immediate equitable relief to enforce such covenants and provisions, and that in the event that any such action or proceeding
is brought in equity to enforce them, the defaulting or breaching party will not urge a defense that there is an adequate remedy
at law.
Section 4. Investor Representation
and Warranty
4.1 Investor’s
Representations and Warranties. As a material inducement to the Company to enter into this Agreement and consummate the exchange,
Investor represents warrants and covenants with and to the Company as follows:
|
|
i.
|
Authorization and Binding Obligation. The Investor has the
requisite legal capacity, power and authority to enter into, and perform under, this Agreement, including with respect to canceling
the note and receiving the Convertible Preferred Stock. The execution, delivery and performance of this Agreement and performance
by such Investor and the consummation by such Investor of the transactions contemplated hereby and thereby have been duly authorized
by all requisite corporate, partnership or similar action on the part of such Investor and no further consent or authorization
is required. This Agreement has been duly authorized, executed and delivered by the Investor. This Agreement has been duly executed
and delivered
|
by the Investor, and constitute
the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with their respective
terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and
remedies and except as rights to indemnification and to contribution may be limited by federal or state securities laws.
|
|
ii.
|
Beneficial Owner. With respect to the Note (i) the Investor
owns, beneficially and of record, good and marketable title to the Note, free and clear of any taxes or encumbrances; (ii) the
Note is not subject to any transfer restriction, other than the restriction that the Note not been registered under the Securities
Act of 1933, as amended (the “1933 Act”) and, therefore, cannot be resold unless registered under the 1933 Act or in
a transaction exempt from or not subject to the registration requirements of the 1933 Act; (iii) the Note has not entered into
any agreement or understanding with any person or entity to dispose of the Note; and (iv) at the Closing, the Investor will convey
to the Company good and marketable title to the Note, free and clear of any security interests, liens, adverse claims, encumbrances,
taxes or encumbrances.
|
|
|
iii.
|
Accredited Investor. Such Investor is an accredited investor
as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.
|
|
|
iv.
|
Disclosure of Information. Such Investor has had an opportunity
to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company
regarding the Company, its business and the terms and conditions of the offering of the Convertible Preferred Stock. Such Investor
acknowledges receipt of copies of the Company’s most recent Annual Report on Form 10-K for its last fiscal year and all other
reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof.
|
|
|
v.
|
Proceedings. No proceedings relating to the Note is pending
or, to the knowledge of the Investor, threatened before any court, arbitrator or administrative or governmental body that would
adversely affect the Investor’s right and ability to surrender and exchange the Note.
|
|
|
vi.
|
Tax Consequences. The Investor acknowledges that the contents
this Agreement do not contain tax advice and Investor acknowledges that it has not relied and will not rely upon the Company with
respect to any tax consequences related to the exchange of the Note and receipt of the Convertible Preferred Stock. The Investor
assumes full responsibility for all such consequences and for the preparation and filing of any tax returns and elections which
may or must be filed in connection with such Note and/or the exchange of the Note for the Convertible Preferred Stock.
|
|
|
vii.
|
Reliance on Exemptions. The Investor understands that the
Convertible Preferred Stock is being offered and exchanged in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and
the Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Investor
set forth herein
|
and in order to determine
the availability of such exemptions and the eligibility of the Investor to acquire the Securities.
|
|
viii.
|
Neither the Investor
nor its agent or representative has engaged any broker or finder or incurred any liability for any brokerage fees, commissions
or finders’ fees in connection with the Transactions contemplated herein.
|
Section 5. MISCELLANEOUS
5.1 Further
Assurances. The parties to this Agreement hereby agree to execute any other documents and take any further actions, which are
reasonably necessary or appropriate in order to implement the transactions contemplated by this Agreement.
5.2 Counterparts.
This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.
5.3 Governing
Law. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of Nevada.
The federal and state courts located in Clark County, Nevada shall have sole and exclusive subject matter jurisdiction over this
Agreement and the parties expressly consent to personal jurisdiction in Nevada for the purpose of resolving any dispute related
to the making or interpretation of this Agreement.
5.4 Successors
and Assigns. This Agreement shall be binding upon the parties hereto and their respective heirs, successors and assigns, if
any, and shall inure to the benefit of the parties hereto and their respective heirs, successors and assigns, if any.
5.5 Severability.
The provisions of this Agreement are severable and in the event that one or more of its provisions are deemed to be unenforceable
or invalid for any reason, such finding will not affect the enforceability or validity of any other provision of this Agreement,
which shall remain in full force and effect.
5.6 Public
Disclosure. The Company and the Investor agree not to issue any public statement with respect to the Investor’s investment
or proposed investment in the Company or the terms of any agreement or covenant without the other party’s prior written consent,
except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.
5.7 Waiver.
No failure or delay on the part of either party hereto in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further
exercise thereof or of any other power, right or privilege.
5.8 Entire
Agreement. This Agreement sets forth the entire understanding of the parties hereto and supersedes all prior agreements and
understandings between the parties relating to the subject matter hereof.
5.9 Parties
in Interest. None of the provisions of this Agreement or of any other document
relating hereto is intended to provide
any rights or remedies to any person (including, without limitation, any employees or creditors of the Company) other than the
parties hereto and their respective heirs, successors and assigns, if any.
5.10 Authorized
Signatures. Each party to this Agreement hereby represents that the persons signing below are duly authorized to execute this
Agreement on behalf of their respective party.
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed as of the date first above written.
|
COMPANY:
|
CLOUDCOMMERCE, INC.
|
By:
/s/ Andrew Van Noy
Andrew Van Noy, Chief
Executive Officer
|
INVESTOR:
|
BOUNTIFUL CAPITAL, LLC
|
By: /s/
Greg Boden
Greg Boden, President
EXHIBIT A
NOTES