Item 1.01 Entry Into a Material Definitive Agreement.
Troika Media Group, Inc. (the "Company") has entered into Settlement Agreements
(the "Settlement Agreements") with certain current and former holders of its
Series E Convertible Preferred Stock (the "Purchasers") (the "Series E Preferred
Stock").
The Company and Purchasers are party to (i) that certain Securities Purchase
Agreement, dated as of March 16, 2022, pursuant to which the original purchasers
of the Series E Preferred Stock (the "Original Purchasers") acquired shares of
Series E Preferred Stock and accompanying warrants (the "Warrants"), subject to
the terms and conditions contained therein, and (ii) that certain Registration
Rights Agreement, dated as of March 16, 2022 (the "Registration Rights
Agreement"), pursuant to which the Company and the Original Purchasers agreed to
certain requirements and conditions covering the resale by the Original
Purchasers of the shares of Company common stock (the "Common Stock") into which
the Series E Preferred Stock are convertible (the "Conversion Shares") and the
Warrants are exercisable (the "Warrant Shares").
Under the terms of the Registration Rights Agreement, the Company, upon
acquiring Converge Direct LLC in March 2022, was required to file a registration
statement within ten (10) business days of such closing and for such
registration statement to be declared effective by the U.S. Securities and
Exchange Commission (the "SEC") no later than forty five (45) business days
thereafter (the "Registration Requirements"). The persons entitled to liquidated
damages pursuant to the Registration Rights Agreement have alleged that the
Company did not fulfill the Registration Requirements.
The Purchasers (i) are the registered or beneficial owners of more than 50.1% of
the Registrable Securities under, and defined in, the Registration Rights
Agreement, and (ii) constitute the purchasers of more than 50.1% of the Series E
Preferred Stock originally purchased under the Securities Purchase Agreement. As
such, in accordance with the terms of the Registration Rights Agreement and the
Securities Purchase Agreement, as applicable, as of March 31, 2023 (the
"Effective Date"), each such agreement and all rights and obligations thereunder
are deemed terminated and of no further force and effect as of such date. In
addition, effective as of the Effective Date, the Settlement Agreements contain
a release of any and all claims against the Company and its subsidiaries that
such Purchaser (or its affiliates) may have purported to have against the
Company or its subsidiaries under such agreements; provided, however, that the
Purchasers will maintain their respective "Piggy-Back Registration Rights" under
Section 6(d) of the Registration Rights Agreement.
In exchange for the release by the Purchasers of any and all claims for
liquidated damages under the Registration Rights Agreement, the Company has
agreed to deliver to each Purchaser a number of shares of Common Stock equal to
the dollar amount of liquidated damages purportedly owed to each such Party
multiplied by four (4). The Company has agreed to prepare and file with the SEC
a resale registration statement covering such Common Stock (the "Resale
Registration Statement") no later than May 15, 2023, which may be extended upon
mutual agreement of the Company and the Purchasers and be subject to certain
other customary registration rights.
This foregoing descriptions of the Settlement Agreements, the Securities
Purchase Agreement and the Registration Rights Agreement do not purport to be
complete and are qualified in their entirety by reference to, (i) in the case of
the Settlement Agreements, the Form of Settlement Agreement filed as Exhibit
10.1 hereto, and (ii) in respect of the Registration Rights Agreement and the
Securities Purchase Agreement, as applicable, Exhibits 4.2 and 4.3 of
the Company's Form 8-K filed March 18, 2022, each of which is incorporated by
reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Number Description
10.1 Form of Settlement Agreement and Release of Claims
Cover Page Interactive Data File (embedded within the Inline
104 XBRL document).
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