Item 1.01. Entry into a Material Definitive Agreement.
On January 7, 2021, Digital Locations, Inc. (the "Company"), SmallCellSite.com
LLC, a Virginia limited liability company ("SCS" or "Seller"), and
SmallCellSite, Inc., a newly formed Nevada corporation and wholly owned
subsidiary of the Company (the "Subsidiary") entered into an asset purchase
agreement ("APA") to acquire substantially all of the assets of the Seller's
wireless communications marketing and database services business in
consideration for a total purchase price of $10,000 in cash and a 5-year
convertible promissory note in the amount of $1,000,000 made in favor of the
Seller or its assignees (the "Note").
The Seller is a source of more than 80,000 cell sites offered by property owners
for use by wireless network operators. Current customers include Verizon and
T-Mobile Sprint.
Pursuant to the APA, the Seller instructed the Company to assign the Note to the
Seller's members as follows: $500,000 principal amount of the Note to Shervin
Gerami, a holder of 50% of the membership interest of SCS, and $500,000
principal amount of the Note to Baryalai Azmi, a holder of 50% of the membership
interest of SCS (the "Assigned Notes").
At any time after December 31, 2021, each month, each holder of the Assigned
Notes may convert the principal amount of the Assigned Note into a number of
shares of the Company's common stock not exceeding five percent (5%) of the
total trade volume of the Company's common stock publicly reported for the
previous calendar month at a conversion price of $0.013 per share. The Note also
imposes an overall limitation on the amount of conversions to common stock that
the Noteholder may effect such that it prohibits the Noteholder from
beneficially owning more than 4.99% of the total issued and outstanding common
stock of the Company at any time that the Note is outstanding
The asset purchase and sale of assets closed on January 7, 2021 (the "Closing
Date"). Pursuant to the APA if the audit of SCS cannot be completed within 71
days after the Closing Date, then the Company will have the right exercisable in
its sole discretion to rescind the APA.
A copy of APA is attached to this Report as Exhibit 10.1 and copies of the Notes
are attached to this Report as Exhibits 10.2 and 10.3.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
10.1 Asset Purchase Agreement, dated January 7, 2021.
10.2 Convertible Promissory Note with Baryalai Azmi, dated January
7, 2021.
10.3 Convertible Promissory Note with Shervin Gerami, dated January
7, 2021
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