Sector 5, Inc. (OTCPK:SFIV) announced that it has entered into securities purchase agreement for a private placement of a convertible promissory note for gross proceeds of $350,000 with accredited investor Auctus Fund, LLC, a fund managed by Auctus Fund Management, LLC on April 16, 2018. The note carries a fixed coupon of 10% per annum and would mature on January 16, 2019. The note has a default interest rate of 24% per year. The note is convertible into common shares of the company at any time, in whole or in part at a conversion price equal to the lesser of the average of the two lowest trading prices of the common stock during the 25 trading days prior to the date of the convertible promissory note and the variable conversion price which is 60% multiplied by the average of the two lowest trading prices of the common stock during the 25 trading days prior to the date of conversion, provided that the conversion price may not be less than $0.17 per share prior to 180 days after the issuance date and is subject to certain customary adjustments and price-protection provisions contained in the note. The Company may prepay the note, in whole or in part, for 135% of the outstanding principal amount plus accrued interest until 90 days after the issuance date, and for 150% of the outstanding principal amount plus accrued interest at any time from 91 days after the issuance date to 180 days after the issuance date. The company also issued warrant to purchase 350,000 common shares at an exercise price of $0.50 per share for a period of five years from the date of closing. The company shall reimburse the buyer for expenses incurred by them, amounting to $25,000 in due diligence fees and $2,750 in legal fees.