Item 1.01
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Entry Into a Material Definitive Agreement.
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On February 19, 2021,
CloudCommerce, Inc. (the “Company”) entered into a securities purchase agreement with the purchaser set forth on the
signature page thereto for the purchase and sale of an aggregate of 85,000,000 shares of common stock (the “Shares”),
(ii) pre-funded warrants to purchase up to 57,857,143 shares of common stock (the “Pre-funded Warrants), and (iii) warrants
to purchase up to 142,857,143 shares of common stock (the “Common Warrants,” and together with the Pre-Funded Warrants,
the “Warrants”), in a registered direct offering at a purchase price of $0.07 per Share and Common Warrant, or $0.069
per Pre-Funded Warrant and Common Warrant. The Common Warrants will be exercisable for a period of five years commencing upon issuance,
at an exercise price of $0.07 per share, subject to certain adjustments set forth therein. The Pre-funded Warrants will be exercisable
commencing upon issuance and expiring upon the exercise of the Pre-funded Warrants in full, at an exercise price of $0.001 per
share, subject to certain adjustments set forth therein.
Pursuant to an engagement
letter (the “Engagement Letter”) dated February 17, 2021 between the Company and H.C. Wainwright & Co., LLC (“Wainwright”),
the Company engaged Wainwright to act as the Company’s exclusive placement agent in connection with the registered direct
offering. Pursuant to the Engagement Letter, the Company agreed to pay Wainwright a cash fee of 7.5% of the gross proceeds the
Company receives under the Purchase Agreement. The Company also agreed to pay Wainwright (i) a management fee equal to 1.0% of
the gross proceeds raised in the offering; (ii) $35,000 for non-accountable expenses; (iii) up to $50,000 for Wainwright’s
legal expenses and other out-of-pocket costs, and (iv) Wainwright’s closing costs of up to $15,950. In addition, the Company
agreed to issue to Wainwright (or its designees) warrants (the “Placement Agent Warrants”) to purchase a number of
shares equal to 7.5% of the aggregate number of shares (including shares underlying the Pre-Funded Warrants) sold under the Purchase
Agreement, or warrants to purchase up to an aggregate of 10,714,286 shares. The Placement Agent Warrants generally will have the
same terms as the Common Warrants, except they will have an exercise price of $0.0875 per share.
The gross proceeds
from the registered direct offering are expected to be approximately $10.0 million, before deducting fees payable to Wainwright
and other estimated offering expenses. The registered direct offering is expected to close on or about February 23, 2021, subject
to customary closing conditions.
The Shares, Warrants and
Placement Agent Warrants (and underlying shares) were offered, and will be issued, pursuant to the Prospectus Supplement, filed
February 22, 2021, to the Prospectus included in the Company’s Registration Statement on Form S-3 (Registration No. 333-252358)
filed with the Securities and Exchange Commission on January 22, 2021, and amended and declared effective February 16, 2021.
Sichenzia Ross Ference
LLP, counsel to the Company, has issued an opinion to the Company regarding the validity of the securities to be issued in the
offering. A copy of the opinion is filed as Exhibit 5.1 to this Current Report on Form 8-K.
The foregoing description
of the Purchase Agreement, Common Warrant, Pre-funded Warrant, and Engagement Letter does not purport to be complete and is qualified
in its entirety by reference to the complete text thereof, which are filed as exhibits to this report.