ATDS DATA443 Risk Mitigation Inc (PK)

On December 11, 2020, Data443 Risk Mitigation, Inc., a Nevada corporation (the “Company”) entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Triton Funds LP, a Delaware limited partnership (“Triton”). Pursuant to the Purchase Agreement, subject to certain conditions set forth in the Purchase Agreement, Triton is obligated to purchase up to One Million Dollars ($1,000,000) of the Company’s common stock from time-to-time. The term of Triton’s obligation to purchase the Company’s shares commences on the effectiveness of a registration statement on Form S-1, to be filed by the Company (the “Registration Statement”), and ends on the earlier of (i) Triton having purchased an aggregate of $1,000,000 of the Company’s common stock under the Purchase Agreement; or, (ii) 30 June 2021.

Each time the Company wishes to issue and sell common stock to Triton under the Purchase Agreement, the Company is required to provide Triton with a purchase notice (the “Purchase Notice”), which Purchase Notice sets forth the total number of shares of common stock that the Company elects to sell to Triton (the “Purchased Shares”). The total purchase price to be paid by Triton at each closing will be determined by multiplying the number of Purchased Shares to be sold by the Company in the Purchase Notice by the purchase price per share, which is $0.006 per share. However, in no event will Triton be obligated to purchase common stock when the closing price for the Company’s common stock is less than $0.009 per share. Triton is obligated to acquire no more than an aggregate offering price of $1 million. Further, the Company shall not effect any sales to Triton, and Triton shall not have the right to purchase any shares, to the extent that after giving effect to such sales, Triton (together with its affiliates, and any other persons acting as a group together with Triton or any of Triton affiliates) would beneficially own in excess of 9.99% of the outstanding shares of the Company’s common stock.

Closing for sales of the Company’s common stock under the Purchase Agreement will occur no later than five (5) business days following the date on which the Purchased Shares are received by Triton’s custodian. In addition, the Company has agreed to pay to Triton (i) $5,000 upon execution of the Purchase Agreement to reimburse Triton’s expenses related to the transaction; and, (ii) $10,000 at the initial closing under the Purchase Agreement as additional reimbursement for Triton’s expenses.

The Company also granted to Triton warrants to purchase 100,000,000 shares of the Company’s Common Stock pursuant to the terms and conditions of a Common Stock Purchase Warrant dated December 11, 2020 (the “Warrant Agreement”). The exercise price for the warrants is $0.01 per share, and may be exercised at any time, in whole or in part, prior to December 11, 2025. The Warrant Agreement provides for certain adjustments that may be made to the exercise price and the number of shares issuable upon exercise due to future corporate events. The Warrant Agreement also contains a limited cashless exercise feature, providing for the cashless exercise of 20,000,000 shares only upon the Company’s failure to secure the effectiveness of the Registration Statement, which is to include all shares under the Warrant Agreement.

The foregoing descriptions of the Purchase Agreement and the Warrant Agreement do not purport to be complete and are qualified in their entirety by the terms and conditions of the Purchase Agreement and the Warrant Agreement. A copy of the form of the Purchase Agreement and the Warrant Agreement is attached hereto as Exhibit 10.1 and 4.1, respectively, and are incorporated herein by reference.