Item 1.01 Entry into a Material Definitive Agreement.
On December 31, 2021, Sow Good Inc., a Nevada corporation (the "Company") closed
a private placement (the "Offering") and concurrently entered into a Note and
Warrant Purchase Agreement (the "Purchase Agreement") with multiple accredited
investors (the "Purchasers") to sell and issue to the Purchasers in reliance on
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"),
and Rule 506 promulgated thereunder, (i) an aggregate of $2,075,000 in 2021
Promissory Notes (the "Notes") and (ii) ten-year warrants (the "Warrants") to
purchase up to an aggregate of 311,250 shares (the "Warrant Shares", and
together with the Notes and Warrants, the "Securities") of the Company's common
stock, par value $0.001 per share, representing 15,000 warrant shares per
$100,000 of Notes purchased. Accrued interest on the Notes is payable
semi-annually beginning June 30, 2022 at the rate of 8% per annum, and the
principal amount of the Notes matures and becomes due and payable on December
31, 2024. The Warrants are exercisable immediately and for a period of 10 years
at a price of $2.21 per share. Proceeds to the Company from the sale of the
Securities were $2,075,000. The Company may redeem outstanding warrants prior to
their expiration, at a price of $0.01 per share, provided that the volume
weighted average sale price per share of Common Stock equals or exceeds $9.00
per share for thirty (30) consecutive trading days ending on the third business
day prior to the mailing of notice of such redemption. Assuming full exercise
thereof, further proceeds to the Company from the exercise of the Warrant Shares
is calculated as approximately $688,000. The Offering closed simultaneously with
execution of the Purchase Agreement.
The foregoing description of the Offering does not purport to be complete and is
qualified in its entirety by reference to the Purchase Agreement, the Notes and
the Warrants, a copy of each of which is attached hereto as Exhibit 10.1,
Exhibit 10.2 and Exhibit 4.1, respectively, and which are incorporated herein by
reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 above with respect to the Offering of the
Securities is incorporated by this reference into this Item 3.02. The Securities
were offered and sold in reliance upon exemptions from registration pursuant to
Section 4(2) under the Securities Act and Rule 506 promulgated thereunder. The
Purchase Agreement, Notes and Warrants executed in connection therewith contain
representations to support the Company's reasonable belief that, among other
things, the Purchasers had access to information concerning its operations and
financial condition, that the Purchasers acquired the Securities for their own
account and not with a view to the distribution thereof, and that each Purchaser
is an "accredited investor" as such term is defined in Regulation D promulgated
under the Securities Act. The Securities described in Item 1.01 above are deemed
to be restricted securities for purposes of the Securities Act and the
certificates representing the Securities shall bear legends to that effect.
Accordingly, the Securities sold in the Offering may not be offered or sold in
the United States absent registration or an applicable exemption from
registration requirements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
4.1 Form of Common Stock Warrant
10.1 Form of Note and Warrant Purchase Agreement
10.2 Form of 2021 Promissory Note
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL
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