Data443 Risk Mitigation, Inc. entered into a securities purchase agreement with a certain accredited investor as purchaser for gross proceeds of $600,000 in its first tranche on December 7, 2022. The company issued unsecured convertible notes of principal amount $750,000, and at a discount of 20%. The notes are convertible into shares of the company's common stock, at a conversion price of $0.50 per share.

The notes were issued with an original issue discount of 20%, do not bear interest, and mature on the earlier of twelve months from the date of issuance or the date that the common stock is listed for trading on any of The New York Stock Exchange, The Nasdaq Global Market, The Nasdaq Global Select Market, The Nasdaq Capital Market or the NYSE American. The company also issued warrants. The warrants are exercisable on or after the date that is four months after the uplisting date and on or prior to the close of business on the five-year anniversary of the initial exercise date.

The warrant entitles the Investor to purchase up to 100% of that number of shares of common stock into which the note may be converted, subject to adjustment under certain circumstances described in the warrants, and has an exercise price of $1.155.