Data443 Risk Mitigation, Inc. (ATDS): debt financing — Data443 closes $1.5M convertible note financing with massive potential dilution; exchanges $5.4M debt for $665K new note

Pursuant to Purchase Agreement #2, the Company sold, and Investor #2 purchased, $718,750.00 in principal amount of secured convertible notes (the “ Investor #2 Notes ” and, together with the Investor #1 Notes, the “ Notes ”) and pre-funded warrants (the “ Investor #2 Warrants ” and, together with the Investor #1 Warrants, the “ Warrants ”). The Investor #2 Notes are convertible into Common Stock, at a conversion price per share of $0.005, subject to adjustment under certain circumstances described in the Notes. The Notes were issued with an original issue discount of 15.00%, bear interest at a rate of 12%, and mature twelve months from the date of issuance.

Pursuant to Purchase Agreement #1, the Company sold, and Investor #1 purchased, $812,500.00 in principal amount of secured convertible notes (the “ Investor #1 Notes ”) and pre-funded warrants (the “ Investor #1 Warrants ”). The Investor #1 Notes are convertible into shares of the Company’s common stock, par value $0.01 per share (“ Common Stock ”), at a conversion price per share of $0.005, subject to adjustment under certain circumstances described in the Investor #1 Notes. The Investor #1 Notes were issued with an original issue discount of 30.00%, do not bear interest, and mature twelve months from the date of issuance.

On July 5, 2023, the Company entered into an amendment (the “ Amendment ”) with the Previous Investor, pursuant to which, among other things, the Previous Investor agreed to exclude the Cyren Assets from the security interests granted under the Original Purchase Agreements. As consideration for entering into the Amendment, the Company granted to the Previous Investor warrants to purchase 25,000,000 shares of Common Stock (the “ Previous Investor Warrants ”).

Also on June 30, 2023, the Company entered into a second securities purchase agreement (“ Purchase Agreement #2 ” and, together with Purchase Agreement #1, the “ Purchase Agreements ”) with an accredited investor as purchaser (“ Investor #2 ” and, together with Investor #1, the “ Investors ”). Pursuant to Purchase Agreement #2, the Company sold, and Investor #2 purchased, $718,750.00 in principal amount of secured convertible notes (the “ Investor #2 Notes ” and, together with the Investor #1 Notes, the “ Notes ”) and pre-funded warrants (the “ Investor #2 Warrants ” and, together with the Investor #1 Warrants, the “ Warrants ”).

On June 30, 2023, Data443 Risk Mitigation, Inc. (the “ Company ”) entered into a securities purchase agreement (“ Purchase Agreement #1 ”) with an accredited investor as purchaser (“ Investor #1 ”). Pursuant to Purchase Agreement #1, the Company sold, and Investor #1 purchased, $812,500.00 in principal amount of secured convertible notes (the “ Investor #1 Notes ”) and pre-funded warrants (the “ Investor #1 Warrants ”).

On June 30, 2023, the Company and the Investors entered into a Security Agreement, pursuant to which, in order to secure the obligations under the Notes, the Investors received a first priority security interest in assets to be acquired by the Company in connection with a previously disclosed acquisition of assets of Cyren Ltd. (the “ Cyren Assets ”).