Item 1.01 Entry into a Material Definitive Agreement.
On January 18, 2021, Summit Wireless Technologies, Inc. (the "Company") entered
into letter agreements (the "Inducement Agreements") with holders (the
"Holders") of common stock purchase warrants previously issued by the Company to
the Holders pursuant to two private placements conducted concurrently with
registered direct public offerings of the Company's securities that closed on
June 8, 2020 and June 11, 2020, respectively (collectively, the "Original
Warrants").
Pursuant to the Inducement Agreements, as an inducement and in consideration for
a Holder's exercise of the Original Warrants for some or all of the shares of
common stock, par value $0.0001 per share (the "Common Stock") available
thereunder, the Company has agreed to deliver to each such Holder new common
stock purchase warrants (the "New Warrants") to purchase a number of shares of
Common Stock equal to 25% of the number of shares of Common Stock issued to such
Holder in connection with its exercise of its Original Warrants. The New
Warrants are immediately exercisable upon issuance at an exercise price of $4.20
per share, which is greater than the closing price of the Common Stock of $4.16
on the Nasdaq Capital Market on January 15, 2021, have an expiration date of
January 19, 2026 and are exercisable on a cashless basis if the New Warrant
Shares have not been registered by the Company on a registration statement on or
before 6 months after the date of issuance and there is no currently effective
registration statement covering the New Warrants at the time of exercise.
Pursuant to the Inducement Agreements, Holders have agreed to exercise Original
Warrants for an aggregate of 1,095,000 shares of Common Stock resulting in gross
proceeds to the Company of $2,824,050, and the Holders will receive New Warrants
exercisable for an aggregate of up to 273,750 shares of Common Stock.
Pursuant to the terms of the Inducement Agreements and the New Warrants, the
Company has agreed to file a registration statement on or before March 19, 2021
to register the shares of Common Stock underlying the New Warrants for resale
and to use its commercially reasonable efforts to have such registration
statement declared effective on or before July 17, 2021.
The Inducement Agreements contain customary representations, warranties, and
covenants by the Company and each of the Holders. In addition, pursuant to the
Inducement Agreements, the Company has agreed that neither it nor any of its
subsidiaries will issue, enter into any agreement to issue or announce the
issuance or proposed issuance of any shares of Common Stock or securities
exercisable for or convertible into shares of Common Stock, or file any
registration statement, or amendment or supplement thereto, with the U.S.
Securities and Exchange Commission ("SEC") within fifteen (15) trading days of
the date of the Inducement Agreements, subject to certain limited exceptions
provided in the Inducement Agreements.
Maxim Group LLC ("Maxim") has provided services as the exclusive solicitation
agent, pursuant to the terms of an engagement letter, dated January 15, 2021
(the "Solicitation Agreement"). Pursuant to the Solicitation Agreement, the
Company has agreed to pay Maxim a cash fee equal to $197,684, which is equal to
7% of the total net proceeds received from the exercise of the Original
Warrants. In addition, pursuant to the Solicitation Agreement, the Company
granted Maxim a right of first refusal, for a period of 280 days from the date
Original Warrants are exercised, to act as lead manager or lead placement agent
in any and all future private or public equity offerings conducted by the
Company.
The Company intends to use the proceeds of any exercise of Original Warrants for
working capital and general corporate purposes.
The foregoing descriptions of the Inducement Agreements, the Solicitation
Agreement, and the New Warrants are qualified in their entirety by reference to
the full text of such Inducement Agreements, Solicitation Agreement, and New
Warrants, the forms of which are attached as Exhibits 10.1, 10.2, and 4.1,
respectively, to this Current Report on Form 8-K, and which are incorporated
herein in their entirety by reference.
Item 2.02 Results of Operations and Financial Condition.
On January 14, 2021, the Company issued a press release providing preliminary
revenue information for the fourth quarter ended December 31, 2020 and revenue
guidance for the first quarter ending March 31, 2021. The press release is
attached hereto as Exhibit 99.1.
The information contained in Item 2.02 of this Current Report on Form 8-K
(including Exhibit 99.1 attached hereto) shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or incorporated by reference in any filing under the Securities
Act or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
The Company previously disclosed in a Current Report on Form 8-K filed by the
Company on January 6, 2021 (the "January 6th 8-K"), that the Company is not in
compliance with Nasdaq's independent director and audit committee requirements
as set forth in Nasdaq Listing Rule 5605 (collectively, the "Nasdaq Independence
Requirements").
Consistent with the January 6th8-K, on January 14, 2021, the Company received a
letter from the Nasdaq Listings Qualifications Department confirming that
consistent with Nasdaq Listing Rules 5605(b)(1)(A) and 5605(c)(4), Nasdaq has
provided the Company a "Cure Period" in order to regain compliance until the
earlier of (i) the Company's next annual stockholders' meeting or (ii) January
1, 2022; or if the next annual stockholders' meeting is held before June 30,
2021, then the Company must evidence compliance with such rule no later than
June 30, 2021. Nasdaq has also informed the Company that if it does not regain
compliance with both of the Nasdaq Independence Requirements, within the
applicable "Cure Period," Nasdaq will provide written notification to the
Company that its securities will be delisted from Nasdaq. At that time, the
Company will have the right to appeal the delisting determination to a Hearings
Panel.
As previously reported in the January 6th8-K, the Company is actively searching
for a qualified individual to replace Mr. Kristensen as an independent director
and anticipates regaining compliance with the Nasdaq Independence Requirements
within the time provided.
Item 3.02 Unregistered Sales of Equity Securities.
The applicable disclosure set forth in Item 1.01 of this Current Report on Form
8-K is incorporated herein by reference into this Item 3.02. The Company is
issuing the New Warrants and will issue the shares of Common Stock issuable upon
exercise of the New Warrants, in each case in reliance upon the exemption from
registration contained in Section 4(a)(2) of the Securities Act. The New
Warrants issued, or any shares of Common Stock issued upon the exercise of the
New Warrants, may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
Item 7.01 Regulation FD Disclosure.
Reference is made to the disclosure set forth in Item 2.02 of this Current
Report on Form 8-K, which disclosure is incorporated herein by reference.
Forward-Looking Statements
This Current Report on Form 8-K and Exhibit 99.1 contain forward-looking
statements. Forward-looking statements include, but are not limited to,
statements that express the Company's intentions, beliefs, expectations,
strategies, predictions or any other statements related to the Company's future
activities, or future events or conditions. These statements are based on
current expectations, estimates and projections about the Company's business
based, in part, on assumptions made by its management. These statements are not
guarantees of future performances and involve risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed or forecasted in the
forward-looking statements due to numerous factors, including those risks
discussed in the Company's Annual Report on Form 10-K, and in other documents
that the Company files from time to time with the SEC. Any forward-looking
statements speak only as of the date on which they are made, and the Company
undertakes no obligation to update any forward-looking statement to reflect
events or circumstances after the date of this Current Report on Form 8-K,
except as required by law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
No. Description
4.1 Form of New Warrant.
10.1 Form of Inducement Agreement.
10.2 Solicitation Agreement, dated January 15, 2021, by and between the
Company and Maxim Group LLC.
99.1 Press Release of the Company, dated January 14, 2021.
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