Item 1.01 Entry Into a Material Definitive Agreement
On July 6, 2020, AYRO, Inc. (the "Company"), entered into a Securities Purchase
Agreement (the "Purchase Agreement") with certain institutional and accredited
investors (the "Purchasers"), pursuant to which the Company agreed to issue and
sell in a registered direct offering (the "Offering") an aggregate of 3,157,895
shares (the "Shares") of common stock of the Company, par value $0.0001 per
share (the "Common Stock"), at an offering price of $4.75 per share, for gross
proceeds of approximately $15 million before the deduction of fees and offering
expenses. The Shares are being offered by the Company pursuant to a shelf
registration statement on Form S-3 (File No. 333-227858) (the "Shelf
Registration Statement"), previously filed with the Securities and Exchange
Commission (the "SEC") on October 16, 2018, and declared effective by the SEC on
November 9, 2018.
The closing of the Offering is subject to satisfaction of customary closing
conditions set forth in the Purchase Agreement and is expected to occur on or
about July 8, 2020. The representations, warranties and covenants contained in
the Purchase Agreement were made solely for the benefit of the parties to the
Purchase Agreement. In addition, such representations, warranties and covenants
(i) are intended as a way of allocating the risk between the parties to the
Purchase Agreement and not as statements of fact, and (ii) may apply standards
of materiality in a way that is different from what may be viewed as material by
stockholders of, or other investors in, the Company. Accordingly, the Purchase
Agreement is filed with this report only to provide investors with information
regarding the terms of transaction, and not to provide investors with any other
factual information regarding the Company. Moreover, information concerning the
subject matter of the representations and warranties may change after the date
of the Purchase Agreement, which subsequent information may or may not be fully
reflected in public disclosures.
The net proceeds to the Company from the Offering, after deducting fees and
expenses, are expected to be approximately $13.8 million.
The description of terms and conditions of the form of Purchase Agreement set
forth herein does not purport to be complete and is qualified in its entirety by
the full text of the form of Purchase Agreement, attached hereto as Exhibit 10.1
and incorporated by reference herein and into the Shelf Registration Statement.
Item 3.02 Unregistered Sales of Equity Securities.
In connection with the Offering, the Company issued warrants to purchase 71,770
shares of the Company's common stock at an exercise price of $5.225 per share to
a financial advisor, and the Company issued warrants to purchase 147,368 shares
of the Company's common stock at an exercise price of $5.4625 per share to a
different financial advisor (collectively, the "Warrants").
Neither the Warrants nor the issuance of the shares of common stock deliverable
upon the exercise of the Warrants (the "Warrant Shares") will be registered
under the Securities Act or any state securities laws. The Warrants and the
Warrant Shares will be issued in reliance on the exemptions from registration
provided by Section 4(a)(2) under the Securities Act of 1933 or Regulation D
promulgated thereunder.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On July 7, 2020, the Company adopted the first amendment to the amended and
restated bylaws (the "First Amendment") that became effective as of July 7,
2020. The board of directors approved the First Amendment on the same date. The
First Amendment amends the Company's amended and restated bylaws to (i) reduce
the notice period for special meetings of the Company's board of directors in
respect of matters occurring outside of the ordinary course of business from
twenty-four hours to one hour and (ii) provide that each director may receive
notice of meetings of the board of directors by any reasonable means requested
by such director.
The foregoing description of the First Amendment is qualified by reference to
the First Amendment, a copy of which is attached hereto as Exhibit 3.1 and is
incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On July 6, 2020, the Company issued a press release regarding the transaction
described above under Item 1.01 of this Current Report on Form 8-K. A copy of
the press release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this
Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not
be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in
any filing under the Exchange Act or the Securities Act of 1933, as amended,
except as shall be expressly set forth by reference in such a filing.
Furthermore, the furnishing of information under Item 7.01 of this Current
Report on Form 8-K is not intended to constitute a determination by the Company
that the information contained herein, including the exhibits hereto, is
material or that the dissemination of such information is required by Regulation
FD.
Item 8.01 Other Events.
The legal opinion of Haynes and Boone, LLP relating to the legality of the
issuance and sale of the Shares in the Offering is attached as Exhibit 5.1 to
this Current Report on Form 8-K and is incorporated by reference herein and into
the Shelf Registration Statement.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
3.1 First Amendment to the Amended and Restated Bylaws of AYRO, Inc.
5.1 Opinion of Haynes and Boone, LLP
10.1 Form of Securities Purchase Agreement
23.1 Consent of Haynes and Boone, LLP (contained in Exhibit 5.1)
99.1 Press Release, dated July 6, 2020
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