Item 1.01 Entry into a Material Definitive Agreement.
Reference is made to the Current Report on Form 8-K of Sigma Labs, Inc. (the
"Company") filed with the Securities and Exchange Commission on January 27, 2020
(the "Prior 8-K"). As described in the Prior 8-K, on January 27, 2020 the
Company entered into a Securities Purchase Agreement with certain institutional
investors (the "Institutional Investors") pursuant to which the Company agreed
to sell to each Institutional Investor shares of the Company's Series D
Convertible Preferred Stock (the "Series D Preferred Stock"), warrants to
purchase the Company's Common Stock (the "Institutional Common Warrants") and
warrants to purchase the Series D Preferred Stock (the "Preferred Warrants") for
a total gross purchase price of $1,600,000. The Series D Preferred Stock, the
Institutional Common Warrants and the Preferred Warrants each contain a cashless
exercise feature that may be applied upon the happening of specified events. The
Prior 8-K also disclosed that on January 27, 2020, the Company entered into a
Securities Purchase Agreement with the Company's largest shareholder and certain
of its directors (the "Other Investors") pursuant to which the Company agreed to
issue and sell to each Other Investors shares of the Company's Series E
Convertible Preferred Stock (the "Series E Preferred Stock"), and Class A
warrants to purchase the Company's Common Stock (the "Class A Warrants") for a
total gross purchase price of $500,000. The offerings of the securities as
described in the Prior 8-K are hereafter referred to as the "Private
Placements."
In connection with the Private Placements, on January 27, 2020, the Company also
entered into a Placement Agency Agreement ("Placement Agreement") with Dawson
James Securities, Inc. ("Dawson") pursuant to which the Company engaged Dawson
as to its exclusive placement agent in connection with, inter alia, the Private
Placements. Under the Placement Agreement, the Company agreed to pay Dawson 8%
of the gross proceeds from the Private Placements as well as from the exercise
through June 30, 2020 of the Preferred Warrants. The Company has also agreed to
issue to Dawson warrants to purchase shares of Common Stock equal to 8% of the
aggregate number of shares issuable upon conversion of the shares of the Series
D Preferred Stock ("Preferred Shares") as well as 8% of the number of common
shares that would be issuable upon conversion of the Preferred Shares arising
from any exercise of the Preferred Warrants on or before June 30, 2020 at the
initial conversion price of the Series D Preferred Stock without regard to any
price protection provisions. The Warrants to be issued to Dawson will be
exercisable six months from issuance at a price per share of $1.13, will contain
a cashless exercise feature, and a term of five years from the date they are
exercisable.
The foregoing summary of the Placement Agreement does not purport to be complete
and is qualified in its entirety by the terms and conditions set forth in the
form attached hereto as Exhibit 10.9 which is incorporated by reference herein
in its entirety.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure in Item 1.01 which is incorporated herein by
reference. The Private Placements were consummated on January 28, 2020. In
connection therewith, the Company issued 1,640 shares of Series D Preferred,
Institutional Common Warrants to purchase an aggregate of 7,796,000 shares of
Common Stock, Preferred Warrants to purchase an aggregate of 6,156 additional
Series D Preferred Stock, 333.33 shares of the Series E Preferred Stock and
Class A Warrants to purchase an aggregate of 485,438 shares of Common Stock. For
purposes of determining the total number of shares of Common Stock issuable to
the Other Investors upon the conversion of the Series E Preferred Stock issued
on January 28, 2020, the Company used the consolidated bid price on January 24,
2020 of $0.90 (i.e., a conversion price of $1.03). The Company also issued
warrants to a prior investor to purchase an aggregate of 350,000 shares of its
Common Stock as consideration for obtaining a waiver from the investor. From the
Private Placements, the Company received gross proceeds of $2,100,000.
The Company paid Dawson a placement commission of $168,000 and issued Placement
Agreement Warrants to purchase an aggregate of 170,035 shares of the Company's
Common Stock.
The Private Placements were effected pursuant to an exemption from the
registration requirements of the Securities Act of 1933, as amended, pursuant to
Section 4(a)(2) thereof and Rule 506 promulgated thereunder.
Item 5.03 Amendments to Articles of Incorporation; Change in Fiscal Year
On January 28, 2020, the Company filed with the Nevada Secretary of State the
Certificate of Designations for the Series D Preferred Stock and the Certificate
of Designations for the Series E Preferred Stock.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Attached as Exhibits 10.2, 10.4, 10.5, 10.7 and 10.8 are the final form of the
documents previously filed in the Prior Form 8-K and should replace the
corresponding exhibits from the Prior Form 8-K.
Number Description
10.2 Certificate of Designations (Series D Convertible Preferred Stock)
10.4 Form of Institutional Common Warrant
10.5 Form of Preferred Warrant
10.7 Certificate of Designations (Series E Convertible Preferred Stock)
10.8 Form of Class A Warrant
10.9 Private Placement Agreement
© Edgar Online, source Glimpses