Item 1.01 Entry into a Material Definitive Agreement.
On February 20, 2018, Precious Investments,
Inc. (the “Company”), entered into a non-binding Letter of Intent (“Letter of Intent”) for the Company
to purchase 100% of the issued and outstanding stock of Recommerce Group, Inc. (“Recommerce”). The Letter of Intent
had a termination date of March 30, 2018.
Recommerce provides retailers and manufacturers
with a comprehensive green approach to managing, remanufacturing, recycling and selling returned consumer products creating profits
from returns.
Pursuant to
the Letter of Intent, the Company agreed to acquire the issued and outstanding stock in Recommerce in exchange for the issuance
of the Company’s Series D Preferred Stock that, upon conversion, will convert into 129,078,225 shares of common stock. The
Series D Preferred Stock has not yet been designated by the Company but was expected to be filed with the State of Nevada prior
to issuance.
The Letter of Intent also provided that after
execution of the Letter of Intent, but before closing, the Company would secure bridge financing of $1,034,000, which will come
in the form of a secured promissory note, and which will be secured by the assets of the Company and further secured with a guarantee
and pledge of 1,000,000 shares of Series C Preferred Stock of the Company held by James Zimbler, the Company’s officer and
director. Mr. Zimbler is a minority shareholder of Recommerce.
On February 20, 2018, the Company secured
the $1,034,000 in bridge funding from Professional Trading Services, Ltd. (“PTS”) and issued the lender a 10% Secured
Convertible Promissory Note (the “PTS Note”). The PTS Note matures on the later to occur of March 8, 2018 or the funding
of $2,000,000. The Company and PTS agreed to use the proceeds of the PTS Note as a loan to Recommerce Group, Inc. of even date.
As such, on February 20, 2018, the Company lent Recommerce $1,034,000 under a 10% Secured Convertible Note (the “Recommerce
Note”) and assigned the security interest in all of Recommerce’s assets to PTS. The Recommerce Note also matures on
the later to occur of March 8, 2018 or the funding of $2,000,000.
In effect, the proceeds of the PTS Note were
to be used as a bridge loan to Recommerce, prior to the closing of the transaction, for specific payments to be made by Recommerce,
as detailed by a use of proceeds agreed to by the Company, PTS and Recommerce. As such, an escrow account was setup for the disbursement
of proceeds under the PTS Note.
On April 4, 2018, Recommerce notified the
Company that the Letter of Intent expired as of March 30, 2018. Notwithstanding, the Company and Recommerce continues to engage
in discussions about extending the expiration date of the Letter of Intent.
Also, the Company has learned that PTS through
its Agent, removed the remaining balance of funds, approximately $203,000 from the PTS Note, held in escrow, which had not been
disbursed and released pursuant to the agreed upon use of proceeds, as specified in the PTS Note.
The Company is currently in discussions with
PTS about the terms for completion of the entire funding of $2,000,000 needed in order to complete the Recommerce transaction.
The foregoing description of the PTS Note
and the Recommerce Note the transactions contemplated thereby does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the full text of the PTS Note and the Recommerce Note, which are included in this Current Report
as Exhibits 4.1 and 4.2, respectively, and are incorporated herein by reference.