Item 1.01. Entry into a Material Definitive Agreement.





Securities Purchase Agreement

On December 20, 2021 (the "Effective Date"), nDivision Inc., a Nevada corporation (the "Company"), entered into a Securities Purchase Agreement (the "Purchase Agreement") with AJB Capital Investments, LLC, a Delaware limited liability company (the "Investor"), with respect to the sale and issuance to the Investor of (i) a promissory note in the principal amount of $600,000 with an original issue discount of $60,000 for a purchase price of $540,000 (the "Note"); (ii) a common stock purchase warrant (the "Warrant") with an exercise price of $0.40 per share (the "Exercise Price") to purchase up to 500,000 shares of the Company's common stock, par value $0.001 per share ("Common Stock"); and (iii) a commitment fee in the amount of $300,000 in the form of 1,200,000 shares of the Common Stock (the "Commitment Fee").

The Company received the aggregate net cash proceeds of $515,500 from the Investor due to a reduction in the $12,000 purchase price as a result of broker fees to Spartan Capital Securities, LLC, and a reduction in 12,500 purchase price as a result of legal, due diligence, and transaction fees of the Investor. The Purchase Agreement provides that the Company may only use the proceeds from the sale of the Note for working capital and other general corporate purposes. The Purchase Agreement further provides for an adjustment provision for the Commitment Fee Shares which allows the Investor to recuperate any shortfall amount resulting from the sale of the Commitment Fee Shares if the net proceeds from such sale do not equal to at least the Commitment Fee.

If the Company repays the Note in full on or prior to its maturity date (without extension), the Company has the right to redeem 600,000 of the Commitment Fee Shares in cash of an aggregate of $1.00. The Purchase Agreement additionally grants the Investor the right of first refusal to participate in future Company financings.

The Purchase Agreement also contains representations and warranties, other covenants, and other provisions customary for transactions of this nature. The representations, warranties, and covenants contained in the Purchase Agreement were made only for purposes of the Purchase Agreement and as of the specific date (or dates) set forth therein and were solely for the benefit of the parties to the Purchase Agreement and are subject to certain limitations as agreed upon by the parties. In addition, the representations, warranties, and covenants contained in the Purchase Agreement may be subject to standards of materiality applicable to the parties that differ from those applicable to investors who are not third-party beneficiaries of the Purchase Agreement and should not rely on the representations, warranties, and covenants contained therein, or any descriptions thereof, as characterizations of the actual state of facts or conditions of the Company or any other parties thereto.

The Note, the Warrant, and the Commitment Fee Shares were issued in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof.

This summary is not a complete description of all of the terms of the Purchase Agreement and is qualified in its entirety by reference to the full text of the Purchase Agreement filed as Exhibit 10.1 hereto, which is incorporated by reference into this Item 1.01.






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The Note

The Note matures on June 20, 2022, and provides for interest to accrue at an interest rate equal to ten percent (10%) per annum, or, upon an event of default, the lesser of (i) eighteen percent (18%) per annum, and (ii) the maximum amount permitted under law. The Note may be prepaid at any time. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, breaches of representations and warranties, certain events of bankruptcy, liquidation and suspension of the Common Stock from trading. If such an event of default occurs, the holders of the Notes may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above, as well as the conversion of the Note.

Pursuant to the terms of the Note, the Investor has the right, only following an event of default, to convert all amounts outstanding under the Note into the shares of Common Stock (the "Conversion Shares"). The initial conversion price, following and during an event of default, for the principal and interest of the Note equals the lesser of 90% (representing a 10% discount) multiplied by the lowest trading price (i) during the previous twenty (20) trading day period ending on the date of issuance of the Conversion Shares, or (ii) during the previous twenty (20) trading day period ending on date of conversion of the Note, subject to adjustment as provided in the Note.

The Note also contains certain negative covenants, including, among other things, prohibitions on incurrence of indebtedness, sales of assets, stock repurchases, and distributions. So long as the Company has any obligation under the Note, the Company may not, without the Investor's written consent, pay or declare any dividend or other distribution on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock. The Investor may not convert the Note into an amount of shares of Common Stock that would result in the beneficial ownership by the Investor and its affiliates of greater than 4.99% of the number of shares of Common Stock outstanding.

This summary is not a complete description of all of the terms of the Note and is qualified in its entirety by reference to the full text of the Note filed as . . .

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.





 (d) Exhibits



Exhibit
No.          Description

  4.1          Common Stock Purchase Warrant dated as of December 20, 2021.
  10.1*        Securities Purchase Agreement dated as of December 20, 2021.
  10.2         Promissory Note in the principal amount of $600,000 dated as of
             December 20, 2021.
  10.3         Security Agreement dated as of December 20, 2021.
104          Cover Page Interactive Data File (the cover page XBRL tags are embedded
             within the inline XBRL document).

____________



*   Schedules, exhibits, and similar attachments have been omitted pursuant to Item
    601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of
    such omitted materials supplementally upon request by the U.S. Securities and
    Exchange Commission.





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