LITHIUM CORPORATION Item 1.01 Entry into a Material Definitive Agreement.
On
In connection with the execution of the Purchase Agreement, the Company sold,
and Lincoln Park purchased, 380,952 shares of Common Stock for a purchase price
of
Under the terms and subject to the conditions of the Purchase Agreement, the
Company has the right, but not the obligation, to sell to Lincoln Park, and
Lincoln Park is obligated to purchase up to
Under the Purchase Agreement, on any business day over the term of the Purchase
Agreement, the Company has the right, in its sole discretion, to present Lincoln
Park with a purchase notice (each, a "Purchase Notice") directing Lincoln Park
to purchase up to 100,000 shares of Common Stock per business day, which
increases to up to 150,000 shares in the event the price of the Company's Common
Stock is not below
• the lowest sale price of the Company's Common Stock on the purchase date;
and
• the average of the three lowest closing sale prices for the Company's Common
Stock during the twelve consecutive business days ending on the business day
immediately preceding the purchase date of such shares.
In addition, on any date on which the Company submits a Purchase Notice to Lincoln Park, the Company also has the right, in its sole discretion, to present Lincoln Park with an accelerated purchase notice (each, an "Accelerated Purchase Notice") directing Lincoln Park to purchase an amount of stock (the "Accelerated Purchase") equal to up to the lesser of (i) three times the number of shares of Common Stock purchased pursuant to such Regular Purchase; and (ii) 30% of the aggregate shares of the Company's Common Stock traded during all or, if certain trading volume or market price thresholds specified in the Purchase Agreement are crossed on the applicable Accelerated Purchase Date, the portion of the normal trading hours on the applicable Accelerated Purchase Date prior to such time that any one of such thresholds is crossed (such period of time on the applicable Accelerated Purchase Date, the "Accelerated Purchase Period"). The purchase price per share of Common Stock for each such Accelerated Purchase will be equal to 93% of the lesser of:
• the volume weighted average price of the Company's Common Stock during the
applicable Accelerated Purchase Period on the applicable Accelerated
Purchase Date; and
• the closing sale price of the Company's Common Stock on the applicable
Accelerated Purchase Date.
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The Company may also direct Lincoln Park on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been properly delivered to Lincoln Park in accordance with the Purchase Agreement, to make additional Accelerated Purchases.
The aggregate number of shares that the Company can sell to Lincoln Park under the Purchase Agreement may in no case exceed that number which, together with Lincoln Park's then current holdings of Common Stock, exceed 4.99% of the Common Stock outstanding immediately prior to the delivery of the Purchase Notice.
Lincoln Park has no right to require the Company to sell any shares of Common Stock to Lincoln Park, but Lincoln Park is obligated to make purchases as the Company directs, subject to certain conditions. There are no upper limits on the price per share that Lincoln Park must pay for shares of Common Stock.
The Company has agreed with Lincoln Park that it will not enter into any "variable rate" transactions with any third party for a period defined in the Purchase Agreement.
The Company issued to Lincoln Park 1,375,779 shares of Common Stock as commitment shares in consideration for entering into the Purchase Agreement on the Execution Date.
The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty, subject to the survival of certain provisions set forth in the Purchase Agreement. During any "event of default" under the Purchase Agreement, all of which are outside of Lincoln Park's control, Lincoln Park does not have the right to terminate the Purchase Agreement; however, the Company may not initiate any regular or other purchase of shares by Lincoln Park, until such event of default is cured. In addition, in the event of bankruptcy proceedings by or against the Company, the Purchase Agreement will automatically terminate.
Actual sales of shares of Common Stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. Lincoln Park has no right to require any sales by the Company but is obligated to make purchases from the . . .
Item 3.02. Unregistered Sales of
See Item 1.01 of this Current Report on Form 8-K. The net proceeds under the Purchase Agreement to the Company, other than the Original Purchase, will depend on the frequency and prices at which the Company sells shares of its Common Stock to Lincoln Park. The Company expects that any proceeds received by the Company from such sales to Lincoln Park under the Purchase Agreement, including proceeds from the Original Purchase, will be used for general corporate purposes.
Item 7.01 Regulation FD Disclosure.
On
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Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description 10.1 Purchase Agreement, by and betweenLithium Corporation and LincolnPark Capital Fund, LLC , datedJanuary 25, 2021 . 10.2 Registration Rights Agreement, by and betweenLithium Corporation andLincoln Park Capital Fund, LLC , datedJanuary 25, 2021 . 99.1 News Release datedJanuary 28, 2021 4
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