Item
1.01 Entry into a Material Definitive Agreement.
In
August and September 2017, CF3 Enterprises, LLC (“CF3”) acquired claims against the Registrant for failure to pay
promissory notes and breach of contracts, which totaled $1,037,238.88, from several persons (the “Claimants”) pursuant
to claim purchase agreements, under which CF3 agreed with them that it would bring legal action against the Company seeking a
judgment for that amount and would attempt to settle these claims pursuant to a judicially approved Settlement Agreement (the
“Settlement Agreement”) and, if successful in so settling, would pay each of the Claimants a specified amount each
month for seven months; the aggregate amounts to be paid each month vary from $1.00 to approximately $230,000.
Under
the Settlement Agreement, the Registrant would be required monthly issue to CF3 a number of shares of the Registrant’s Common
Stock (“Common Stock”) determined by dividing the aggregate amount of the payment that CF3 is obligated to pay to
the Claimants for that month by the lowest price at which such common stock has sold during the previous 30 days, multiplied by
discount rate of 50 percent, which is subject to adjustment in certain events. The number of shares of Common Stock that the Registrant
may issue to CF3 on any date is limited by a provision in the Settlement Agreement to the effect that CF3 may not be the holder
of more than 9.99% of Common Stock after such issuance. Because the number of shares to be issued is based upon the market price
of the Common Stock, the total number of shares to be issued under the Settlement Agreement is indeterminable. The provisions
of the Settlement Agreement require the Registrant to take action to increase the number of shares of its authorized common stock
from 10,000,000,000 to 20,000,000,000 and the Registrant intends to take action so to do as quickly as practicable.
On
September 26, 2017, in compliance with the claim purchase agreements, CF3 filed a complaint against the Registrant in respect
of the above mentioned claims in the Seventeenth Circuit Count in and for Broward County, Florida, seeking a judgment against
the Company for $1,037,238.88, plus interest and attorney’s fees, under the caption “CF3 Enterprises, LLC v. Metrospaces,
Inc.” The lawsuit was assigned Case No. CACE17017866. On October 4, 2017, the Registrant filed an answer to the complaint,
admitting each and every one of the allegations set forth in the complaint, acknowledging and accepting informal service of process
and waiving all objections to service thereof, and asserting as an affirmative defense, the facts that the parties entered into
the Settlement Agreement on the terms described above, and that the Registrant and CF3 had agreed therein to resolve all of the
claims set forth in the complaint in accordance therewith. On October 4, 2017, the parties filed a joint motion seeking an order
approving the Settlement Agreement, stating that there would be submitted to the court an agreed proposed order approving the
Settlement Agreement and the fairness thereof and a stipulation and order of dismissal.
On
November 1, 2017, a hearing on the joint motion was held, at which the full terms of the Settlement Agreement were disclosed and
at which the court entered an order, dated November 1, 2017, approving the Settlement Agreement and ordering the Registrant and
CF3 to comply with its terms.
On
November 14, 2017, CF3 submitted a request for the issuance of 460,000,000 shares of Common Stock in respect of the first monthly
issuance under the Settlement Agreement and by virtue thereof, became the holder of these shares on that date. After the issuance
of these shares, the Registrant has 4,609,712,186 shares of its common stock issued and outstanding of which the shares issued
to CF3 constitute approximately 9.99%.
A
copy of the Settlement Agreement is filed as Exhibit 10 to this Current Report on Form 8-K and is incorporated herein by reference.
The foregoing description is qualified by its entirety by reference thereto.
