Item 1.01. Entry into a Material Definitive Agreement.
On
? senior secured convertible notes in the aggregate original principal amount of
? warrants to purchase up to 16,077,172 shares of common stock of the Company
(the "Common Stock") until on or prior to
five year anniversary of the closing date at an exercise price of
share (the "PIPE Warrants").
The transactions contemplated under the Securities Purchase Agreement closed on
The Convertible Notes bear interest at an interest rate of 5% per annum payable
on each installment date commencing on the original date of issuance. If an
Event of Default (as defined in the Notes) has occurred and is continuing,
interest would accrue at the rate of 18% per annum, compounding monthly. The
Convertible Notes are convertible into shares of Common Stock, beginning after
the original date of issuance at an initial conversion price of
The PIPE Warrants contain provisions permitting cashless exercise subject to certain conditions.
The Convertible Notes and the PIPE Warrants contain conversion limitations providing that a holder thereof may not convert the Convertible Notes or exercise the PIPE Warrants to the extent (but only to the extent) that, if after giving effect to such conversion or exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% the ordinary shares immediately after giving effect to such conversion or exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.
The Company has also entered into a Registration Rights Agreement (the
"Registration Rights Agreement") to file with the
The Convertible Notes will rank senior to all outstanding and future indebtedness of the Company and its Subsidiaries (as defined in the Securities Purchase Agreement), and will be secured by a first priority perfected security interest in all of the existing and future assets of the Company and each Subsidiary Guarantor (as defined in the Security and Pledge Agreement), as evidenced by (i) a security and pledge agreement to be entered into at closing (the "Security and Pledge Agreement"), (ii) account control agreements to be entered into at closing with respect to certain accounts described in the Convertible Note and the Security and Pledge Agreement, and (iii) a guaranty to be executed by certain subsidiaries of the Company (the "Guaranty") pursuant to which each of them will guaranty the obligations of the Company under the Convertible Notes and the other transaction documents (as defined in the Securities Purchase Agreement).
Pursuant to the Securities Purchase Agreement, the Company agreed to seek the approval of its stockholders for the issuance of all shares of Common Stock issuable upon conversion of the Convertible Notes, in compliance with the rules of the Nasdaq Capital Market (the "Stockholder Approval"). It is a condition to the closing that the Company enter into voting agreements (the "Voting Agreements") with certain significant stockholders of the Company (each, a "Stockholder"), pursuant to which each Stockholder will agree, with respect to all of the voting securities of the Company that such Stockholder beneficially owns as of the date thereof or thereafter, to vote in favor of the Stockholder Approval.
Pursuant to an placement agency agreement dated
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Convertible Notes, the Securities Purchase Agreement, the PIPE Warrant, the Registration Rights Agreement, the Security and Pledge Agreement, the Guaranty Agreement, the Voting Agreement, the Placement Agency Agreement, and the Placement Agent Warrant attached hereto as Exhibits 4.1, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 and 10.8, respectively, each of which are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth under Item 1.01 is incorporated herein by reference.
Item 3.02. Unregistered Sales of
The information included in Item 1.01 of this Current Report is incorporated by
reference into this Item 3.02 of this Current Report to the extent required. The
Convertible Notes, the PIPE Warrants, the Placement Warrants and the conversion
shares have been offered and sold pursuant to exemptions from the registration
requirements of the Securities Act afforded by Section 4(a)(2) thereof and Rule
506 of Regulation D promulgated thereunder, for the sale of securities not
involving a public offering. Each of the Purchasers is an accredited investor
which has purchased the securities as an investment in a private placement that
did not involve a general solicitation. The shares of Common Stock to be issued
upon conversion of the Convertible Notes and the exercise of the PIPE Warrants
have not been registered under the Securities Act and may not be offered or sold
in
Item 8.01. Other Events.
On
Item 9.01. Exhibits (d) Exhibits. Exhibit Number Description 4.1 Form of Senior Secured Convertible Note 10.1 Securities Purchase Agreement, dated as ofJanuary 4, 2023 . 10.2 Form of PIPE Warrant. 10.3 Form of Registration Rights Agreement. 10.4 Form of Security and Pledge Agreement. 10.5 Form of Guaranty Agreement. 10.6 Form of Voting Agreement. 10.7 Placement Agency Agreement, dated as ofJanuary 4, 2023 . 10.8 Form of Placement Agent Warrant. 99.1 Press Release. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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