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

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On February 2, 2017, QuantumSphere, Inc., a Nevada corporation
(the Registrant), entered into a Securities Purchase Agreement
(the February 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 sixty-eight thousand dollars ($68,000) (the February
2017 Note). The February 2017 Note consists of (i) sixty-five
thousand dollars ($65,000) of cash investment and (ii) three
thousand dollars ($3,000) of legal fee and due diligence fee.

The February 2017 Note shall bear simple interest at the rate of
twelve percent (12%) per annum and will mature on November 5,
2017. The default interest rate on the February 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
February 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 fifteen (15) trading day period
ending on the latest complete trading day prior to the conversion
date.

The foregoing description of the February 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 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 -0.00110 at 0.00470 with shares trading hands.