Item 1.01 Entry into a Material Definitive Agreement.
On
The principal and interest under the Promissory Note is due and payable on
The Promissory Note bears interest at a rate of 10% per annum and is convertible into shares of common stock of the Company 180 days following the date of the Promissory Note at the "Variable Conversion Price" which shall mean 61% multiplied by the average of the lowest two Trading Prices (as such term is defined in the Promissory Note) for the common stock during the fifteen (15) Trading Day period ending on the latest complete trading day prior to the conversion date. Notwithstanding the foregoing, the Investor shall be restricted from effecting a conversion, if such conversion, along with the other shares of the Company's common stock beneficially owned by the Investor and its affiliates, exceeds 4.99% of the outstanding shares of the Company's common stock.
The Company has the right but not the obligation under the Promissory Note to prepay the outstanding note, wherein the Company would pay to the Investor a percentage of the outstanding note (the "Prepayment Percentage"), such Prepayment Percentage dependent upon the period of time during which the Company elects to prepay the outstanding Promissory Note.
The Agreement also enumerates events of default, which include, but are not limited to, failure to pay principal and interest, breach of covenant, bankruptcy and delisting of common stock.
In connection with the sale of the Promissory Note, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.
The foregoing description of the Promissory Note does not purport to be complete and is qualified in its entirety by reference to the complete text of the Promissory Note filed as Exhibit 10.1 hereto, which is incorporated herein by reference, and further qualified in its entirety by reference to the complete text of the Purchase Agreement filed as Exhibit 10.2 hereto, which is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation.
The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of
Issuance of Convertible Promissory Note
The information set forth in Item 1.01 is incorporated by reference into this Item 3.02.
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The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended, since, among other things, the transactions did not involve a public offering of the securities.
Shares of Common Stock issued upon conversion of outstanding convertible notes
As previously reported, the Company entered into securities purchase agreements
pursuant to which it issued convertible notes to various accredited investors,
which notes are convertible into shares of the Company's common stock on the
terms and subject to the conditions set forth in the various securities purchase
agreements and associated notes. From
The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended, since, among other things, the transactions did not involve a public offering of the securities.
Series B Preferred Stock
On
On
For so long as any shares of the Series B Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have voting power equal to 51% of the total vote (representing a super majority voting power) on all shareholder matters of the Company. Such vote shall be determined by the holder(s) of a majority of the then issued and outstanding shares of Series B Preferred Stock.
The shares of the Series B Preferred Stock shall be automatically redeemed by
the Company at their par value on the first to occur of the following triggering
events: (i) a date forty five (45) days after the effective date of the
Certificate of Designation, (ii) on the date that
Additionally, the Company is prohibited from adopting any amendments to the Company's Bylaws, Articles of Incorporation, as amended, as set forth in the Certificate of Designation, without the affirmative vote of at least 66-2/3% of the outstanding shares of Series B Preferred Stock. However, the Company may, by any means authorized by law and without any vote of the holders of shares of Series B Preferred Stock, make technical, corrective, administrative or similar changes to such Certificate of Designation that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of Series B Preferred Stock.
This description of the Certificate of Designation is only a summary and is qualified in its entirety by reference to the full text of the form of the Certificate of Designation attached as Exhibit 3.1 hereto.
The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended, since, among other things, the transactions did not involve public offerings of securities.
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
The information set forth in Item 3.02 under the caption Series B Preferred Stock is incorporated by reference into this Item 5.03
Item 7.01 Regulation FD Disclosure.
On
A copy of the press release is furnished as Exhibit 99.1 of this report.
By furnishing this Current Report on Form 8-K and furnishing the Investor Presentation, the Company makes no admission as to the materiality of any information in this Report.
The information in this Form 8-K and the Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibits Number Description 3.1 Certificate of Designation of Series B Preferred Stock 10.1 Convertible Promissory Note datedJanuary 14, 2021 10.2 Securities Purchase Agreement datedJanuary 14, 2021 99.1 Press Release 3
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