Item 1.01 Entry into a Material Definitive Agreement.
On September 11, 2022, American Virtual Cloud Technologies, Inc. (the "Company")
and the holders (collectively, the "Holders") of the Company's Series B
Convertible Preferred Stock (the "Series B Preferred Stock") and senior secured
convertible notes issued in April 2022 (the "Convertible Notes") entered into an
Exchange Agreement (the "Exchange Agreement"). Pursuant to the Exchange
Agreement, the parties thereto agreed, among other things, to (i) exchange the
remaining outstanding Series B Preferred Stock, consisting of $3,942,447.94 in
stated value, into rights (the "Rights") to acquire an aggregate of 25,806,428
shares (the "Rights Shares") of the Company's common stock, par value $0.0001
per share (the "Common Stock"), and (ii) to convert $1,600,000 in original
principal amount of the Convertible Notes into 10,473,260 shares of Common Stock
(the "Installment Shares"), at a conversion price of $0.15277 per share
(calculated as 88% of the volume weighted average closing price of the Common
Stock on September 8, 2022, consistent with the formula for determining
installment conversions set forth in the Convertible Notes), in each case to be
effective on September 12, 2022. The Rights Shares and the Installment Shares
are being issued in reliance on the exemption from registration provided by
Section 3(a)(9) of the Securities Act of 1933, as amended (the "Securities
Act").
Pursuant to the Exchange Agreement, the Holder of the Series B Preferred Stock
agreed that it would not, directly or indirectly, sell or otherwise dispose of
any Rights Shares on any calendar day through and including September 16, 2022,
to the extent that any such sale or other disposition of shares would exceed
8.5% of the daily composite trading volume of the Common Stock through the time
of sale on any such date. In addition, the Holder of the Convertible Notes
agreed to waive the right to payment of any cash portion of any installment
conversion amount of the Convertible Notes during the period from September 15,
2022 through September 30, 2022, to the extent such right would otherwise arise
from the conversion price during such period being below the $0.10 floor price
set forth in the Convertible Notes.
The foregoing summary provides only a brief description of the Exchange
Agreement. The summary does not purport to be complete and is qualified in its
entirety by the full text of the Exchange Agreement, a copy of which is attached
hereto as Exhibit 10.1 and incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information in Item 1.01 of this Current Report on Form 8-K with respect to
the issuance of the Rights and the Installment Shares is incorporated by
reference in this Item 3.02 to the extent required.
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Item 8.01 Other Events.
The Company has completed the sale of shares of Common Stock under its
previously announced at-the-market equity offering program, which provided for
the offer and sale, from time to time, of shares of its Common Stock having an
aggregate offering price of $14,785,490.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Exhibit
10.1 Exchange Agreement, dated as of September 11, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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