Resonate Blends Inc. announced that it has entered into a securities purchase agreement with accredited investor, 1800 Diagonal Lending, LLC for a private placement of a convertible promissory note at purchase price of $128,500 for gross proceeds of $128,500 on June 27, 2022. The principal amount of the note is $138,800, which was issued at $10,300 original issue discount and legal fees of $3,500 in the transaction. The company received net proceeds of $125,000.

The maturity date for repayment of the note is June 27, 2023, and the note bears interest at 8% per annum. If prepay the note, then required to pay a 12% prepayment premium if paid within 120 days of issuance of the note and a 15% prepayment premium if paid within 180 days of issuance of the note. All principal and accrued interest on the notes is convertible into shares of our common stock after 180 days from issuance; provided that, the number of shares attainable by investor at any given time shall not exceed 4.99% of our outstanding common stock.

The conversion price is 73% of the average of the 3 lowest trading prices for our common stock during the 10-day trading period ending on the day before the conversion date.