CHERUBIM INTERESTS, INC. (OTCMKTS:CHIT) Files An 8-K Entry into a Material Definitive Agreement

CHERUBIM INTERESTS, INC. (OTCMKTS:CHIT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

On November 22, 2016 (the “Effective Date”), Cherubim Interests, Inc. (the “Company”) entered into an Investment Agreement (the “Investment Agreement” filed as Exhibit 2.1) by and among the Company, and Tangiers Global, LLC, a Wyoming limited liability company ("Tangiers"), to which Tangiers has agreed to purchase up to five million dollars ($5,000,000) of the Company’s common stock to be sold at an eighty-five percent (85%) discount to the five (5) consecutive Trading Days including and immediately following the receipt of a Put Notice (the "Shares"). The Shares must be registered with the SEC in a current registration statement. The registration rights of Tangiers are outlined in the Registration Rights Agreement (“Rights Agreement”) which details the obligations of the Company, attached herewith as Exhibit 2.2.

On November 22, 2016 (the “Effective Date”), the Company issued to Tangiers that certain convertible promissory note (the “Purchase Note”) in the principal amount of $50,000. The Purchase Note is due June 22, 2017 (the “Maturity Date”). The Purchase Note bears interest at the rate of 10% per annum. The Purchase Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at a price equal to the lowest trading price of the Company’s common stock during the 5 Trading Day period immediately prior to the date of issuance. The Purchase Note may not be prepaid in whole or in part, at any time without the approval of the Holder. The Purchase Note contains representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies.

On November 22, 2016 (the “Effective Date”), the Company issued to Tangiers that certain convertible note (the “Draw-Down Note”) in respect of a credit line in the original principal amount up to $250,000. As of November 22, 2016, the Company recorded a $25,000 draw-down and consideration in respect of the credit line. The Draw-Down Note matures on June 22, 2017 (the “Maturity Date”), and bears interest at the rate of 10% per annum. The Draw-Down Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at a price equal to $0.005. The Draw-Down Note may be prepaid in whole or in part, at 125% of the principal amount owed thereon if under 90 days since the issuance date, at 135% of the principal amount owed thereon if between 91 and 135 days since the issuance date, and 145% of the principal amount owed thereon if over 135 days since the issuance date. The Draw-Down Note contains representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies.

On November 15, 2016, the Company approved a grant of a warrant for 2,500,000 shares of common stock of the Company (the “Warrant”) to Tangiers at an exercise price of $0.01 per share.

In respect of the aforementioned transactions, no solicitation was made and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance of its securities as described above were exempt from registration with the Securities and Exchange Commission to Section 4(2) of the Securities Act of 1933.

The foregoing descriptions of the terms of the Investment Agreement, Rights Agreement, Purchase Note, Draw-Down Note, and the Warrant are qualified in their entirety by reference to the provisions of the respective agreements filed as Exhibits to this Report.  

Item 3.02 Unregistered Sales of Equity Securities

 

As described in Item 1.01 above, On November 22, 2016 (the “Effective Date”), the Company entered into the Investment Agreement with Tangiers to which Tangiers has agreed to purchase up to five million dollars ($5,000,000) of the Company’s common stock to be sold at an eighty-five percent (85%) discount to the five (5) consecutive Trading Days including and immediately following the receipt of a Put Notice (the "Shares"). The Shares must be registered with the SEC in a current registration statement. The registration rights of Tangiers are outlined in the Registration Rights Agreement (“Rights Agreement”) which details the obligations of the Company, attached herewith as Exhibit 2.2.

Also on November 22, 2016 (the “Effective Date”), the Company issued to Tangiers the Purchase Note in the principal amount of $50,000. The Purchase Note is due June 22, 2017, and the Purchase Note bears interest at the rate of 10% per annum. The Purchase Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at a price equal to the lowest trading price of the Company’s common stock during the 5 Trading Day period immediately prior to the date of issuance. The Purchase Note may not be prepaid in whole or in part, at any time without the approval of the Holder. The Purchase Note contains representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies.

Also on November 22, 2016 (the “Effective Date”), the Company issued to Tangiers the Draw-Down Note in respect of a credit line in the original principal amount up to $250,000. As of November 22, 2016, the Company recorded a $25,000 draw-down and consideration in respect of the credit line. The Draw-Down Note matures on June 22, 2017, and bears interest at the rate of 10% per annum. The Draw-Down Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at a price equal to $0.005. The Draw-Down Note may be prepaid in whole or in part, at 125% of the principal amount owed thereon if under 90 days since the issuance date, at 135% of the principal amount owed thereon if between 91 and 135 days since the issuance date, and 145% of the principal amount owed thereon if over 135 days since the issuance date. The Draw-Down Note contains representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies.

Also on November 15, 2016, the Company approved a grant of a warrant for 2,500,000 shares of common stock of the Company to Tangiers at an exercise price of $0.01 per share.

In respect of the aforementioned transactions, no solicitation was made and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance of its securities as described above were exempt from registration with the Securities and Exchange Commission to Section 4(2) of the Securities Act of 1933.

The foregoing descriptions of the terms of the Investment Agreement, Rights Agreement, Purchase Note, Draw-Down Note, and the Warrant are qualified in their entirety by reference to the provisions of the respective agreements filed as Exhibits to this Report.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

2.1

Investment Agreement, dated November 15, 2016.

2.2

Registration Rights Agreement, dated November 15, 2016

2.3

Fixed Convertible Promissory Note, dated November 15, 2016

2.4

Convertible Promissory Note, dated November 15, 2016

2.5

Warrant, dated November 15, 2016


About CHERUBIM INTERESTS, INC. (OTCMKTS:CHIT)

Cherubim Interests Inc., formerly Falcon Crest Energy Inc., is a development-stage company that is focused on alternative, commercial, single and multifamily dwelling opportunities for the purpose of investment purchase. It also provides renovation services to third party multifamily dwelling unit owners on a turn-key basis. The Company specializes in covering the entire spectrum of development, including due diligence, acquisition, planning, construction, renovation and property management. The Company had not generated any revenues. The Company previously operated in the oil and gas industry, focused on the exploration for and development of oil and gas properties.

CHERUBIM INTERESTS, INC. (OTCMKTS:CHIT) Recent Trading Information

CHERUBIM INTERESTS, INC. (OTCMKTS:CHIT) closed its last trading session down -0.00150 at 0.00190 with 81,374,868 shares trading hands.

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