Item 1.01 Entry into a Material Definitive Agreement.
Term Loan Agreement
On
Borrowings under the Term Loan Agreement accrue interest at a rate per annum
equal to the Adjusted Term SOFR (as defined in the Term Loan Agreement) plus
9.00% or the Base Rate (as defined in the Term Loan Agreement) plus 8.00%, as
the case may be. Borrowings under the Term Loan Agreement mature on
The Term Loan Agreement contains customary representations, warranties, events of default and covenants, including limitations on the incurrence of indebtedness and liens, restricted payments and investments, mergers and financial covenants, including testing, at all times, of minimum Liquidity (as defined in the Term Loan Agreement) and quarterly testing of minimum Regulated Subsidiary Equity (as defined in the Term Loan Agreement).
In connection with the Term Loan Agreement, the Company entered into that
certain Board Observation Side Letter, dated
Warrants
In connection with the Term Loan Agreement, on
The Term Loan Agreement also provides that, upon the Minimum Liquidity Step-Down
Date (as defined in the Term Loan Agreement), the Company will issue the Lenders
(or one or more of their designated affiliates or other designees) additional
warrants (the "Tranche 2 Warrants"), substantially in the form attached to the
Term Loan Agreement, to purchase a number of shares of Common Stock equal to
1.0% of the issued and outstanding shares of Common Stock as of the Minimum
Liquidity Stepdown Date (subject to adjustment), at an exercise price equal to
the average volume weighted average trading price per share of Common Stock for
the thirty trading day period ending on the trading day immediately prior to the
issuance date of the Tranche 2 Warrants. The Tranche 2 Warrants will have an
expiration date of the earlier of (i) the first anniversary of the issuance date
of the Tranche 2 Warrants, (ii)
In connection with the issuance of the Tranche 1 Warrants, the Company entered
into a Registration Rights Agreement, dated
The foregoing description of the Term Loan Agreement, Observer Letter, Registration Rights Agreement, Tranche 1 Warrants and Tranche 2 Warrants does not purport to be complete and is qualified in its entirety by reference to the full text of the Term Loan Agreement, Observer Letter, Registration Rights Agreement, Tranche 1 Warrants and Tranche 2 Warrants, which are filed as Exhibits 10.1, 10.2, 10.3, 4.1 and 4.2, respectively, to this Form 8-K and are incorporated herein by reference.
Item 3.02 Unregistered Sales of
The information contained in Item 1.01 is incorporated herein by reference.
2
--------------------------------------------------------------------------------
As described in Item 1.01, the Company has agreed to issue and sell the Tranche 1 Warrants to the Lenders (or one or more of their designated affiliates or other designees). This issuance and sale of Tranche 1 Warrants will be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) of the Securities Act. Each such Lender (or its applicable designated affiliate or other designee) represented to the Company that it is an "accredited investor" as defined in Rule 501 of the Securities Act and that the Tranche 1 Warrants are being acquired for investment purposes and not with a view to, or for sale in connection with, any distribution thereof, and appropriate legends will be affixed to any certificates evidencing shares of the Tranche 1 Warrants.
Item 7.01 Regulation FD Disclosure.
On
The information contained in, or incorporated into, this Item 7.01, including Exhibit 99.1 attached hereto, is being "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that section, nor shall it be incorporated by reference into any registration statement or other filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference. This report shall not be deemed an admission as to the materiality of any information in this report that is being disclosed pursuant to Regulation FD.
Forward Looking Statements
This Current Report on Form 8-K and any oral related statements made by
representatives of the Company may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements may relate to, among
other things, expectations, estimates and projections concerning the timing and
success of the proposed transaction announced herein, future operations,
strategies, plans, partnerships, investments, financial results or other
developments, and are subject to assumptions, risks and uncertainties.
Statements such as "guidance", "expect", "anticipate", "strong", "believe",
"intend", "goal", "objective", "target", "position", "potential", "will", "may",
"would", "should", "can", "deliver", "accelerate", "enable", "estimate",
"projects", "outlook", "opportunity", "expansion", "creation" or similar words,
as well as specific projections of future events or results qualify as
forward-looking statements. Forward-looking statements, by their nature, are
subject to a variety of inherent risks and uncertainties that could cause actual
results to differ materially from the results projected. Many of these risks and
uncertainties cannot be controlled by the Company. Factors that may cause the
Company's actual decisions or results to differ materially from those
contemplated by these forward-looking statements include, but are not limited to
the Company's realization of expected benefits related to the transactions
disclosed herein and the factors that can be found in the Company's Form 10-K
and Forms 10-Q filed with the
3
--------------------------------------------------------------------------------
4
Item 9.01 Financial Statements and Exhibits
(d) Exhibits: Exhibit No. Description 4.1 Form of Common Stock Purchase Warrant (Tranche 1), datedJanuary 26, 2022 . 4.2 Form of Common Stock Purchase Warrant (Tranche 2). 10.1* Term Loan Agreement, datedJanuary 26, 2022 , by and among the Company,Caret Holdings, Inc. , as borrower, the other loan parties party thereto, the lenders party thereto andAcquiom Agency Services LLC , as the administrative agent for the lenders party thereto. 10.2 Board Observation Side Letter, datedJanuary 26, 2022 , by and between the Company and GCO II Aggregator 2 L.P. 10.3 Registration Rights Agreement, datedJanuary 26, 2022 , by and between the Company and the other parties thereto. 99.1 Press Release, datedJanuary 26, 2022 . 104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. * Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(10). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to theSEC upon request.
--------------------------------------------------------------------------------
© Edgar Online, source