Item 1.01 Entry into a Material Definitive Agreement.
Note Purchase Agreement dated March 7, 2022 and Related Agreements
Note Purchase Agreement
On March 7, 2022, ZHRH Corporation, a Nevada corporation ("we," "our," "us" or
the "Company") entered into a Note Purchase Agreement (the "Note Purchase
Agreement") with James Purnell Bond, a member of the Company's Board of
Directors. Pursuant to the Note Purchase Agreement, the Company agreed to sell
and issue to Mr. Bond, a convertible promissory note in the principal amount of
$30,000 (the "Note"). The foregoing description of the Note Purchase Agreement
does not purport to be complete and is qualified in its entirety by reference to
the Form of Note Purchase Agreement, which is filed herewith as Exhibit 10.1 and
is incorporated herein by reference.
Convertible Promissory Note
The Note was issued to Mr. Bond on March 7, 2022. The Note carries an interest
rate of 10% per annum and matures on December 31, 2022 (the "Maturity Date").
The Note converts automatically on the first business day following the
completion of a transaction between the Company and Zhonghuan Ruiheng
Environmental Technology Co., Ltd. ("ZHRH China") pursuant to which the Company
shall obtain a controlling interest in ZHRH China, shall have been completed and
the Company shall have obtained such controlling interest, as determined by the
Company (the "ZHRH Transaction"), into a number of unregistered and restricted
fully paid and nonassessable shares of shares of the Company's common stock
equal to (i) the indebtedness under the Note as of such conversion date divided
by (ii) the value per share of common stock as determined based on a valuation
of the Company of $30,000,000 and the number of issued and outstanding shares of
common stock as of such conversion date (the "Conversion Shares"). In the event
that the ZHRH Transaction is not completed prior to the Maturity Date, none of
the indebtedness under the Note will convert or be convertible into shares of
the Company's common stock and instead the indebtedness under the Note will come
due and payable in full. There can be no assurance that the Company will enter
into any letters of intent or any other oral or written agreements in connection
with the ZHRH Transaction, or that the ZHRH Transaction can occur at all. The
foregoing description of the Note does not purport to be complete and is
qualified in its entirety by reference to the Form of Note, which is filed
herewith as Exhibit 10.2 and is incorporated herein by reference.
Escrow Agreement
In connection with the Note Purchase Agreement and the Note, on March 7, 2022,
the Company entered into an Escrow Agreement (the "Escrow Agreement") with Mr.
Bond, and Anthony L.G., PLLC as the escrow agent (the "Escrow Agent"). Pursuant
to the Escrow Agreement, Mr. Bond agreed to deliver the purchase price for the
Note to the escrow account to be held by the Escrow Agent, until such time as
the Escrow Agent receives an Escrow Release Notice signed by the Company and Mr.
Bond instructing the release of the escrowed funds to the Company. The Escrow
Agent's fee under the Escrow Agreement is $2,500 to be paid by the Company. The
foregoing description of the Escrow Agreement, does not purport to be complete
and is qualified in its entirety by reference to the Form of Escrow Agreement,
which is filed herewith as Exhibit 10.3 and is incorporated herein by reference.
Securities Purchase Agreement dated January 24, 2022 and Related Agreements
Securities Purchase Agreement
On January 24, 2022, the Company entered into a Securities Purchase Agreement
(the "Securities Purchase Agreement") with Badon Partners SAS and Calgary
Thunder Bay Limited. Calgary Thunder Bay Limited is the Company's majority
shareholder, holding 71,260,000 shares of the Company's common stock at this
time which constitutes 95.01% of the Company's issued and outstanding common
stock. Xuejiao Fang is the 100% owner of Calgary Thunder Bay Limited and has the
power to vote and dispose of the shares held by Calgary Thunder Bay Limited.
Badon Partners SAS is 100% owned and controlled by Aymar de Lencquesaing a
member of the Company's Board of Directors. Pursuant to the Securities Purchase
Agreement, the Company agreed to sell and issue Badon Partners SAS a convertible
promissory note in the principal amount of $200,000 (the "Note") and to sell and
issue to Badon Partners SAS and a number of shares of the Company's common stock
equal to (i) $200,000 (the "Shares Purchase Price") divided by (ii) the value
per share of common stock as determined based on a valuation of the Company of
$30,000,000 and the number of issued and outstanding shares of common stock as
of the "Shares Closing," as such term is defined in the Securities Purchase
Agreement (the "Shares"). The term "Share Closing" is defined in the Securities
Purchase Agreement as the first business day after the completion of the ZHRH
Transaction. There can be no assurance that the Company will enter into any
letters of intent or any other oral or written agreements in connection with the
ZHRH Transaction, or that the ZHRH Transaction can occur at all. Pursuant to the
Securities Purchase Agreement, Calgary Thunder Bay Limited agreed that in the
event that the ZHRH Transaction does not occur, and the Note becomes due and
payable, Calgary Thunder Bay Limited will transfer 50% of the shares it holds in
the Company to Badon Partners SAS in full satisfaction of the indebtedness under
the Note. Calgary Thunder Bay Limited also agreed in the Securities Purchase
Agreement to not directly or indirectly sell or offer to sell the shares of the
Company's common stock held by Calgary Thunder Bay Limited until the earlier of,
full repayment of the Note by the Company or full conversion of the Note. The
foregoing description of the Securities Purchase Agreement does not purport to
be complete and is qualified in its entirety by reference to the Form of
Securities Purchase Agreement, which is filed herewith as Exhibit 10.4 and is
incorporated herein by reference.
Convertible Promissory Note
The Note was issued to Badon Partners SAS on January 24, 2022. The Note carries
an interest rate of 10% per annum and matures on December 31, 2022 (the
"Maturity Date"). The Note converts automatically on the first business day
following the completion of the ZHRH Transaction, into a number of unregistered
and restricted fully paid and nonassessable shares of shares of the Company's
common stock equal to (i) the indebtedness under the Note as of such conversion
date divided by (ii) the value per share of common stock as determined based on
a valuation of the Company of $30,000,000 and the number of issued and
outstanding shares of common stock as of such date conversion date (the
"Conversion Shares"). In the event that the ZHRH Transaction is not completed
prior to the Maturity Date, none of the indebtedness under the Note will convert
or be convertible into shares of the Company's common stock and Calgary Thunder
Bay Limited will transfer to Badon Partners SAS 50% of the shares of the
Company's common stock held by Calgary Thunder Bay limited in accordance with
the terms of the Note and the terms of the Securities Purchase Agreement. The
. . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference into this Item 3.02.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1* Form of Note Purchase Agreement with James Purnell Bond dated March 7,
2022.
10.2* Form of Convertibles Promissory Note issued to James Purnell Bond
dated March 7, 2022.
10.3* Form of Escrow Agreement with James Purnell Bond dated March 7,
2022.
10.4* Form of Securities Purchase Agreement with Badon Partners SAS and
Calgary Thunder Bay Limited dated January 24, 2022.
10.5* Form of Convertibles Promissory Note issued to Badon Partners SAS and
Calgary Thunder Bay Limited dated January 24, 2022.
10.6* Form of Escrow Agreement with Badon Partners SAS dated January 24,
2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Filed herewith.
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ZHRH CORPORATION 