Item 1.01 Entry into a Material Definitive Agreement.
On
The Notes bear interest at 10% per annum and mature on
The Notes are convertible into shares of the Company's Series A Preferred Stock ("Series A Preferred") at a conversion price equal to (a) the outstanding principal amount of, plus all accrued interest on, the Note divided by (b) $0.2065. The conversion price is subject to adjustment for certain stock splits, recapitalizations and other similar events. The Notes are secured by a security interest in all of the Company's assets.
Up to 1,000,000 shares of Series A Preferred were approved by the Board. The
Series A Preferred has a 200% liquidation preference over the common stock and
any other future series of preferred stock, payable in the event of a
liquidation or merger of the Company. In such event, the holders of the Series A
Preferred will be entitled to a priority distribution equal to 200% of the
deemed issue price of $0.2065 per share, (i.e.,
On
The Company intends to use the
The form of Subscription Agreement, the Certificate of Designation for the Series A Preferred and the form of Note are filed as Exhibits 10.1, 3.1, and 4.1, respectively, to this Current Report on Form 8-K. The foregoing summaries of the terms of these documents are subject to, and qualified in their entirety by, such documents, which are incorporated herein by reference.
The representations, warranties and covenants contained in the Subscription Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Subscription Agreement. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Subscription Agreement, and this subsequent information may or may not be fully reflected in the Company's public disclosures.
The Notes, the shares of Series A Preferred to be issued upon conversion of the
Notes and the shares of common stock to be issued upon conversion of the Series
A Preferred sold in the private placement and to be issued have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state or other applicable jurisdiction's securities laws, and may not be
offered or sold in
This current report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As described above in Item 1.01, which disclosures are incorporated by reference
in this Item 3.03 in their entirety, on
Item 3.02. Unregistered Sales of
As described above in Item 1.01, which disclosures are incorporated by reference
in this Item 3.02 in their entirety, on
We claim an exemption from registration for the issuance of the Notes, the shares of Series A Preferred issuable upon conversion of the Notes and the shares of common stock issuable upon conversion of the Series A Preferred pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D thereunder, since the foregoing issuances did not involve a public offering, the recipients were (i) "accredited investors"; and/or (ii) had access to similar documentation and information as would be required in a registration statement under the Securities Act, and the recipients represented that they acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by us or our representatives. No underwriters or agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions. The securities sold are subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. Exhibit Number Description 3.1 Certificate of Designation of Series A Preferred Stock 4.1 Form of Convertible Note 10.1 Form of Subscription Agreement datedJanuary 13, 2023 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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