QUANTUMSPHERE, INC. (OTCMKTS:QSIM) Files An 8-K Entry into a Material Definitive Agreement

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On March 14, 2017, QuantumSphere, Inc., a Nevada corporation (the
Registrant), entered into a Securities Purchase Agreement (the
March 2017 Securities Purchase Agreement) with a certain
accredited investor (the Investor) to which the Registrant issued
a 12% convertible promissory note in the original principal
amount of forty-eight thousand dollars ($48,000) (the March 2017
Note). The March 2017 Note consists of (i) forty-five thousand
dollars ($45,000) of cash investment and (ii) three thousand
dollars ($3,000) of legal fee and due diligence fee.

The March 2017 Note shall bear simple interest at the rate of
twelve percent (12%) per annum and will mature on December 30,
2017. The default interest rate on the March 2017 Note is
twenty-two percent (22%) per annum. All interest shall accrue and
be payable at maturity in the form of cash unless the Investor
options to convert the accrued interest into common stock. The
March 2017 Note is convertible into common stock at any time
beginning one hundred eighty (180) days following the date of the
note and ending on the later of (i) the maturity date and (ii)
the date of payment of the default amount. The conversion price
will be sixty percent (60%) of the market price, defined as the
average of the lowest three (3) trading prices for the common
stock on the OTCQB during the ten (10) trading day period ending
on the latest complete trading day prior to the conversion date.

The foregoing description of the March 2017 Securities Purchase
Agreement does not purport to be complete and is qualified in its
entirety by reference to Exhibit 10.1, which is attached hereto
and which is incorporated herein its entirety by this reference.

ITEM 2.03 CREATION OF A DIRECT FINANCIAL
OBLIGATION

The disclosure set forth above under Item 1.01 is hereby
incorporated by reference into this Item 2.03.

ITEM 3.02 UNREGISTERED SALE OF EQUITY SECURITIES

The disclosure set forth above under Item 1.01 is hereby
incorporated by reference into this Item 3.02.

ITEM 8.01 OTHER EVENTS

As of the date of this filing, approximately $628,000 in June
2016 notes payable and accrued interest have been converted at a
discount to common stock, and approximately $271,000, held by an
affiliate, remain to be converted at a discount to common stock.

As of the date of this filing, approximately $2.0 million in
other notes payable and accrued interest remain that the Company
intends to pursue conversion to common stock at a yet to be
determined price.

As of the date of this filing, approximately $334,000 in secured
notes payable and accrued interest remain that will not be
converted into common stock

ITEM 9.01 FINANCIAL STATEMENTS AND EXHBITS

About QUANTUMSPHERE, INC. (OTCMKTS:QSIM)

QuantumSphere, Inc. (QSI) has developed a process to manufacture metallic nanopowders with end-use application focused on the chemical sector. The Company’s principal activities include capital formation, research and development, and marketing of its metallic nanopowder products. The Company manufactures various metals, bi-metallic alloys and catalysts at the nanoscale, including iron, silver, copper, nickel and manganese. It offers custom dispersions and integrated catalytic solutions for the energy storage and chemical sectors, including nanoscale gold, palladium, aluminum and tin. The Company’s products include QSI-Nano Iron, QSI-Nano Silver, QSI-Nano Copper, QSI-Nano Nickel and QSI-Nano Manganese. As of June 30, 2015, the Company had 16 gas phase condensation reactors, which it utilizes in the manufacture of nanocatalysts. With 16 reactors, the Company’s capacity was approximately 300 kilograms per month at June 30, 2015.

QUANTUMSPHERE, INC. (OTCMKTS:QSIM) Recent Trading Information

QUANTUMSPHERE, INC. (OTCMKTS:QSIM) closed its last trading session down -0.00030 at 0.00740 with shares trading hands.