Item 1.01 Entry into a Material Definitive Agreement.
On
Additionally, on
Under the terms and subject to the satisfaction of the conditions set forth in
the Purchase Agreement, the Company has the right, but not the obligation, to
sell to Seven Knots, and Seven Knots is obligated to purchase, up to 40,093,080
shares of Common Stock. Such sales of Common Stock by the Company, if any, will
be subject to certain limitations as set forth in the Purchase Agreement, and
may occur from time to time, at the Company's sole discretion, over a 24-month
period commencing on the date that all of the conditions to the Company's right
to commence such sales are satisfied, including that the registration statement
referred to above is declared effective by the
Under the Purchase Agreement, the Company may, at its discretion, from time to
time from and after the Commencement Date, direct Seven Knots to purchase (a
"Fixed Purchase") up to 350,000 shares of Common Stock on any trading day on
which the closing sale price of the Common Stock is not below
In addition to Fixed Purchases, and provided that the Company has directed Seven
Knots to purchase the maximum allowable amount of shares of Common Stock in a
Fixed Purchase, the Company also may, at its discretion, from time to time from
and after the Commencement Date, direct Seven Knots to purchase additional
amounts of our Common Stock on the trading day immediately following the
purchase date for such Fixed Purchase (each, a "VWAP Purchase") and, under
certain circumstances set forth in the Purchase Agreement, direct Seven Knots to
purchase additional amounts of Common Stock on the same trading day as such VWAP
Purchase (each, an "Additional VWAP Purchase"), in each case upon the terms and
subject to the conditions set forth in the Purchase Agreement. Seven Knots's
maximum purchase commitment in any single VWAP Purchase, together with any one
or more Additional VWAP Purchases that are effected on the same trading day as
such VWAP Purchase, may not exceed
The purchase price per share for the shares of Common Stock that may be sold to Seven Knots in a Fixed Purchase will be based on prevailing market prices of the Common Stock at or prior to the time of sale, as computed under the Purchase Agreement. The purchase price per share for the shares of Common Stock that may be sold to Seven Knots in a VWAP Purchase and in an Additional VWAP Purchase will be based on the volume weighted average price or closing price or closing price of our Common Stock at the time of sale, as computed under the Purchase Agreement. There is no upper limit on the price per share that Seven Knots may be obligated to pay for the Common Stock in any of the Fixed Purchases, VWAP Purchases and Additional VWAP Purchases we elect to make under the Purchase Agreement.
2
Under applicable rules of the NYSE, in no event may the Company issue or sell to Seven Knots under the Purchase Agreement shares of Common Stock in excess of 40,093,080 shares, which maximum number of shares is equal to 19.99% of the 200,565,683 shares of Common Stock outstanding immediately prior to the execution of the Purchase Agreement (the "Exchange Cap").
The Purchase Agreement also prohibits the Company from directing Seven Knots to purchase any shares of Common Stock if those shares, when aggregated with all other shares of Common Stock then beneficially owned by Seven Knots and its affiliates, would result in Seven Knots having beneficial ownership of more than 4.99% of the outstanding shares of Common Stock.
The Purchase Agreement contains customary representations, warranties, covenants, indemnification and termination provisions. Seven Knots has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Common Stock. There are no limitations on use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the Company's ability to enter into additional "variable rate transactions" or substantially similar transactions as the transactions contemplated by the Purchase Agreement, subject to certain exceptions, during certain periods beginning prior to the applicable purchase dates for any Fixed Purchase, VWAP Purchase and Additional VWAP Purchase ending after the dates on which such purchases are fully settled, as set forth in the Purchase Agreement), rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. The Purchase Agreement may be terminated by the Company at any time, at the Company's sole discretion, without any cost or penalty, upon 10 trading days' prior written notice to Seven Knots. Neither the Company nor Seven Knots may assign or transfer its rights and obligations under the Purchase Agreement, and no provision of the Purchase Agreement or the Registration Rights Agreement may be modified or waived by the parties.
The net proceeds under the Purchase Agreement to the Company will depend on the frequency of sales and the number of shares sold to Seven Knots and prices at which the Company sells shares to Seven Knots. The Company expects that any net proceeds received by the Company from such sales to Seven Knots will be used for working capital and general corporate purposes. The Company believes that it is prudent capital management to have the flexibility to sell Common Stock pursuant to the Purchase Agreement, subject to market conditions.
The foregoing descriptions of the Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to the full text of the Purchase Agreement and the Registration Rights Agreement, each of which is attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and each of which is incorporated herein by reference.
The Purchase Agreement and Registration Rights Agreement contain customary
representations and warranties, covenants and indemnification provisions that
the parties made to, and solely for the benefit of, each other in the context of
all of the terms and conditions of such agreements and in the context of the
specific relationship between the parties thereto. The provisions of the
Purchase Agreement and Registration Rights Agreement, including any
representations and warranties contained therein, are not for the benefit of any
party other than the parties thereto and are not intended as documents for
investors and the public to obtain factual information about the current state
of affairs of the parties thereto. Rather, investors and the public should look
to other disclosures contained in our annual, quarterly and current reports we
may file with the
This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any shares of Common Stock, nor shall there be any sale of shares of Common Stock in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
3
Item 3.02 Unregistered Sale of
The information contained above in Item 1.01 is hereby incorporated by reference into this Item 3.02.
Based in part upon the representations of Seven Knots in the Purchase Agreement,
the offer and sale of the shares of Common Stock by the Company to Seven Knots
under the Purchase Agreement is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to the
exemptions afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of
Regulation D thereunder. Seven Knots represented that it is an accredited
investor, as such term is defined in Rule 501(a)(3) of Regulation D under the
Securities Act, and that it is acquiring the shares for investment purposes only
and not with a view to any resale, distribution or other disposition of shares
in violation of
Forward-Looking Statements
Certain statements and assumptions in this Current Report contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this Current Report include, among others, statements about the Company's strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside the Company's control.
These forward-looking statements are subject to known and unknown risks and
uncertainties, which could cause actual results to differ materially from those
anticipated, including, without limitation: the impact of COVID-19, and the rate
of adoption and efficacy of vaccines to prevent COVID-19, on our business and
investment strategy; the timing and outcome of the
The forward-looking statements included in this Current Report are only made as of the date of this Current Report. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.
4
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 Common Stock Purchase Agreement, dated as ofJune 18, 2021 , by and between the Company andSeven Knots Capital Partners, LLC . 10.2 Registration Rights Agreement, dated as ofJune 18, 2021 , by and between the Company andSeven Knots Capital Partners, LLC . 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). 5
© Edgar Online, source