July 22, 2021, Veritas Farms, Inc. (the “Company”) issued secured convertible promissory notes in the aggregate principal
amount of $1,075,000 (the “Secured Convertible Promissory Notes”) in exchange for an aggregate amount of $1,075,000, which
Secured Convertible Promissory Notes were issued to the Cornelis F. Wit Revocable Living Trust (the “Wit Trust”), a principal
shareholder who holds securities of the Company that constitute a majority of the voting securities of the Company, in the amount of
$1,000,000, Stephen E. Johnson, Chief Executive Officer and President of the Company, in the amount of $50,000, and Ramon A. Pino, Executive
Vice President of Finance of the Company, in the amount of $25,000. The Secured Convertible Promissory Not es are secured by the Company’s
assets and contain certain covenants and customary events of default, the occurrence of which could result in an acceleration of the
Secured Convertible Promissory Notes. The Secured Convertible Promissory Notes are convertible as follows: prior to the Company closing
a financing through the sale and issuance of the Company’s equity securities, debt, convertible debt, a combination of the foregoing
or otherwise (“Conversion Securities”), on or prior to the due date of the Secured Convertible Promissory Note (the “Financing”),
the Holder has the right, in its sole discretion, to convert in whole or in part the principal and accrued but unpaid interest thereon
through and as of the date of the closing of the Financing, into the identical Conversion Securities issued at such Financing. The Notes
will accrue interest at 8% per annum, which is payable upon payment or conversion of the Secured Convertible Promissory Notes into the
Financing, at the option of the Holder. All unpaid principal, together with any then unpaid and accrued interest and other amounts payable
under the Secured Convertible Promissory Notes, is due and payable if not converted pursuant to the terms and conditions of the Secured
Convertible Promissory Notes on the earlier of (i) April 01, 2022, or October 1,2021 (ii) following an event of default. In addition,
the Secured Convertible Promissory Note issued to the Wit Trust provides that $500,000 of principal will be due and payable if not converted
pursuant to the terms and conditions of the Secured Convertible Promissory Note at such time as the Company raises a minimum amount of
$1,000,000 in additional capital.
foregoing description of the terms of the Secured Convertible Promissory Notes does not purport to be complete and is qualified in its
entirety by reference to the full text of the Form of Secured Convertible Promissory Note attached hereto as Exhibit 10.1.
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a Registrant.
disclosure set forth under
of this Current Report on Form 8-K is incorporated herein by reference.
Sale of Equity Securities.
disclosure set forth under
of this Current Report on Form 8-K with respect to the issuance of the Secured Convertible
Promissory Notes is incorporated by reference into this Item 3.02. The Secured Convertible Promissory Notes issued to the investors were
offered and sold in a transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(a)(2)
Statements and Exhibits.
Form of Secured Convertible Promissory Note dated July 22, 2021
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.
July 29, 2021
Ramon A. Pino
A. Pino, Executive Vice President of Finance
makes a similar move, sign up!
Other recent filings from the company include the following:
Entry into a Material Definitive - Oct. 15, 2021
Unregistered Sale of Equity - Oct. 4, 2021
Cornelis F. Wit TTEE, Cornelis F. Wit Revocable Trust just provided an update on share ownership of Armeau Brands Inc - Sept. 29, 2021