Arax Holdings Corp. announced that it has entered into a material definitive agreement for the private placement of a series of convertible notes with various private accredited investors in the aggregate principal amount of $3,432,980 on February 1, 2023. The maturity date of the notes are 2 years from the issue date.

The notes shall bear interest at a rate of 10% per annum. The final payment of principal and interest shall be due on the maturity date. The note holder has the option to convert all or any amount of the principal face amount of the note the note plus accrued interest into common stock of the company at a set price for the first 60 days from the issue date, following this date and for the remainder of the term of the note, the note holder has the option to convert all or any amount of the principal face amount of the note plus accrued interest from time to time into common stock of the company at a then applicable conversion price.

The conversion price for the note shall be equal to the variable conversion price. Notwithstanding the foregoing, the note holder shall be restricted from effecting a conversion if such conversion, along with other shares of the company's common stock beneficially owned by the note holder and its affiliates, exceeds 4.99% of the outstanding shares of the company's common stock. The note may be prepaid by the company pursuant to the terms of the purchase agreement.

The note was issued, and any shares to be issued pursuant to any conversion of the note shall be issued in a private placement in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.