UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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The 4Less Group, Inc. is referred to herein as “we”, “our”, or “us”.
Item 1.01 Entry into a Material Definitive Agreement.
We executed a Promissory Note, a securities purchase agreement, warrant agreement, and a security agreement (the “Transaction Documents”), with each of the following Accredited Investors (individually “Accredited Investor””), as summarized below:
On February 14, 2022, we executed Transaction Documents with an Accredited Investor providing for: (a) a principal loan in the amount of $1,200,000 with an annual interest rate of 12% and a 6 month Maturity Date; (b) issuance of 1,200,000 warrants to purchase our common stock, par value $0.000001 per share, at an exercise price of $1.50 for a 5 year term; (c) issuance of 550,000 Commitment Shares; (d) issuance of 600,000 Extension Shares, which shares are returned to the Company for cancellation if the Company prepays or retires the Note on or prior to its Maturity Date and the Note does not otherwise go into default; and (e) a grant to the Accredited Investor of a first priority security interest in all of the Company’s assets and property.
On February 25, 2022, we executed Transaction Documents with an Accredited Investor providing for: (a) a principal loan in the amount of $350,000 with an annual interest rate of 12% and a 6 month Maturity Date; (b) issuance of 350,000 warrants to purchase our common stock, par value $0.000001 per share, at an exercise price of $1.50 for a 5 year term; (c) issuance of 160,416 Commitment Shares; (d) issuance of 175,000 Extension Shares, which shares are returned to the Company for cancellation if the Company prepays or retires the Note on or prior to its Maturity Date and the Note does not otherwise go into default; and (e) a grant to the Accredited Investors a Secured Party of a first priority security interest in all of the Company’s assets and property.
On February 25, 2022, we executed Transaction Documents with an Accredited Investor providing for: (a) a principal loan in the amount of $150,000 with an annual interest rate of 12% and a 6 month Maturity Date; (b) issuance of 150,000 warrants to purchase our common stock, par value $0.000001 per share, at an exercise price of $1.50 for a 5 year term; (c) issuance of 69,000 Commitment Shares; (d) issuance of 75,000 Extension Shares, which shares are returned to the Company for cancellation if the Company prepays or retires the Note on or prior to its Maturity Date and the Note does not otherwise go into default; and (e) a grant to the Accredited Investors a Secured Party of a first priority security interest in all of the Company’s assets and property.
On March 9, 2022, we executed Transaction Documents with an Accredited Investor providing for: (a) a principal loan in the amount of $200,000 with an annual interest rate of 12% and a 6 month Maturity Date; (b) issuance of 200,000 warrants to purchase our common stock, par value $0.000001 per share, at an exercise price of $1.50 for a 5 year term; (c) issuance of 92,000 Commitment Shares; (d) issuance of 100,000 Extension Shares, which shares are returned to the Company for cancellation if the Company prepays or retires the Note on or prior to its Maturity Date and the Note does not otherwise go into default; and (e) a grant to the Accredited Investor as a Secured Party (the Lender) of a first priority security interest in all of the Company’s assets and property.
On March 9, 2022, we executed Transaction Documents with an Accredited Investor providing for: (a) a principal loan in the amount of $200,000 with an annual interest rate of 12% and a 6 month Maturity Date; (b) issuance of 200,000 warrants to purchase our common stock, par value $0.000001 per share, at an exercise price of $1.50 for a 5 year term; (c) issuance of 92,000 Commitment Shares; (d) issuance of 100,000 Extension Shares valued at $50,000, which shares are returned to the Company for cancellation if the Company prepays or retires the Note on or prior to its Maturity Date and the Note does not otherwise go into default; and (e) a grant to the Accredited Investor as a Secured Party of a first priority security interest in all of the Company’s assets and property.
The above described debt transactions were originated as short-term bridge loans with the expectation to retire the debt with an expected capital raise in conjunction with a planned up-listing to NASDAQ.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information provided in Item 1.01 above is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information provided in Item 1.01 above is incorporated herein by reference. We relied upon Section 4(a)(2) of the Securities Act of 1933, as amended, for sales of the securities.
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.
Dated: April 6, 2022
The 4 Less Group Inc.
By: /s/ Timothy Armes
Timothy Armes
Chief Executive Officer
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