Elite Data Services Inc. (OTCBB:DEAC) announced that it has entered into a security purchase agreement with returning investor LG Capital Funding, LLC for 6% convertible note for proceeds of $52,500 and new investor Adar Bays, LLC for 6% convertible note for gross proceeds of $52,500 on June 16, 2015. The company issued a convertible notes in the principal amount of $52,500 maturing on June 16, 2016 bearing interest at the rate of 6% per annum. After broker and legal fees, the company received $45,000.

The note is due and payable on June 16, 2016, with interest payable in shares of common stock. The unpaid principal and interest on the convertible note, upon notice, any time prior to the 180th day after the issuance date. Any prepayment is subject to payment of a prepayment amount ranging from 115% to 140% of the then outstanding balance on the note depending on when such prepayment is made.

The note may be prepaid in whole or in part with following penalties:if the convertible note is prepaid within 90 days from the date of issuance then at 120% of the face amount plus any accrued interest, or if note are prepaid with 91 days but less than 150 days after the date of issuance, then at 130% of the face amount and any accrued interest, or if note are prepaid within 150 days but less than 180 days then at 140% of the face amount and accrued interest. The 6% convertible note may not be prepaid after 180 days without written permission. The 6% convertible note are redeemable and funded within three days of giving notice of redemption.

The company will pay a default interest rate of 24% per annum if it fails to repay the note. The securities were issued pursuant to exemption provided under Regulation D. The 6% note is convertible into shares at a conversion price equal to 58% of the lowest closing bid price of common stock for the ten trading days on or prior to the date upon which notice of conversion is received, subject to reduction to 48%.