SOLARWINDOW TECHNOLOGIES, INC. Item 5.01 Changes in Control of Registrant.
The Company has been notified that on
The Purchased Shares and the Warrants are herein referred to as the "Sale Shares." The Purchase and Sale Agreement, as amended by the Corrective Amendment is herein referred to as the "SPA." All other capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Purchase and Sale Agreement or the Corrective Amendment, as the case may be, a copy of each of which is attached to this Form 8-K as Exhibit 10.1 and 10.2 respectively.
The Purchased Shares represent approximately 62% of the Company's issued and outstanding Shares; and, together with the shares of the Company's Common Stock issuable upon the exercise of the Warrants, LQE's beneficial ownership is approximately 72%. The Warrants provide the holder thereof with right to purchase up to an aggregate of 18,561,917 shares of the Company's common stock.
Pursuant to the Purchase and Sale Agreement, the total consideration (the "Consideration") for the purchase of the Sale Shares payable by the Buyer to the Seller in cash as follows:
(a) $47.50 million (Canadian Dollars) (approximately US$37,402,000 on the
Completion Date) to be paid on or prior to on the date that is one hundred
twenty (120) calendar days after the Completion Date (or if such date is
not a Business Day, the next Business Day following such date) (the
"Initial Payment Deadline"); and
(b) $16.5 million (Canadian Dollars) (approximately US$12,992,000 on the
Completion Date) additional penalty if the Consideration is paid after the
Initial Payment Deadline, but no later than a date that is two hundred
forty (240) days after the Initial Payment Deadline (the "Final Payment
Deadline").
In the event that the Consideration has not been paid (the "Non-Payment Event") on the date of either:
(a) the Initial Payment Deadline or the Final Payment Deadline without LQE
having served a notice on KCC in relation to exercising its right to defer
payment of the Consideration, under as provided in Clause 3.3 of the SPA,
to no later than the Final Payment Deadline; or
(b) the Final Payment Deadline.
then, within five (5) Business Days after the occurrence of a Non-Payment Event, LQE shall transfer, for nil consideration, the Repurchase Shares to KCC (or its nominee).
Pending payment of the Consideration, Clause 7 of the SPA states that LQE shall not and shall ensure that the Company shall not do any of the following:
"(a) change or replace (or permit any change or replacement) of the articles of
association of the Company;
(b) issue or permit the issuance of new shares, warrants, options, or other
securities which would increase the issued share capital of the Company by
greater than 20%, unless issuance of such share capital is required for
raising operating capital or enabling business operations;
(c) terminate the appointment / employment (as the case may be) of any of the
persons who are, as at the date hereof, directors of the Company / members
of Executive Management of the Company, in each case, not including (i)
lawful termination of such person for cause, or (ii) circumstances where
such persons voluntarily resign or retire, or (iii) circumstances where an
appointment of such persons is deemed necessary to advancing the business
of the Company;
(d) appoint / employ (as the case may be) of additional persons to the office
of director of the Company / as a member of Executive Management of the
Company, except where such appointment is deemed necessary to advancing
the business of the Company;
(e) transfer, assign, or license to or from any third party any Intellectual
Property Rights fundamental to the business of the Company, except where
such transfer, assignment, or license agreements are deemed necessary to
advancing the operations of the Company;
(f) sell, transfer or otherwise dispose of any shares in the capital of the
Company amounting to a Controlling Interest (or enter into an agreement to
do so);
(g) incur capital expenditure of the Company that is consistent (sic) with its
historical operating requirements;
(h) sell or dispose of any assets valued greater than $500,000 ;
(i) exercise any Warrants; and
(j) borrow any sum in excess of $100 million (USD) or raise any equity finance
in excess of $200 million (USD)."
The Purchase and Sale Agreement also includes mutual representations and indemnification provisions.
The Corrective Amendment amended the SPA by (i) by amending the recitals of paragraph A of the recitals to the SPA by setting forth the number of shares of the Company's common stock issued and outstanding as 53,198,399, (ii) by amending the definition of "Sale Shares," in Clause 1.1 of the Purchase and Sale Agreement, to mean the 32,984,331 and 16,780,167 cash only Warrants (as and 1,781,750 cashless Warrants, and (iii) by clarifying the definition of "Buyer Indemnified Parties" and "Seller Indemnified Parties" in Clause 8 of the SPA.
The SPA may be further amended only by a written agreement signed by both KCC and LQE.
The foregoing summary of each of the Purchase and Sale Agreement and the Corrective Amendment is not complete and is qualified in its entirety by reference, respectively, to the Purchase and Sale Agreement and the Corrective Amendment, a copy of each of which, along with the consent of LQE and KCC to file the same, is filed as Exhibit 10.1, 10.2, and 10.3 respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
It is the Company's understanding that the Consideration for the Sale Shares will be funded through investment funds to be procured by LQE. It is the Company's understanding that, except as provided in Clause 7 of the Purchase and Sale Agreement there are no arrangements or understandings among members of both the former and new control groups and their associates with respect to election of directors or other matters. Failure to pay the full Consideration in accordance with the provisions set forth in the SPA, may result in KCC (and, presumably its Relevant Subsidiaries) exercising its option to acquire the Repurchase Shares.
KCC continues to own 2,654,520 shares of the Company's common stock, which represents approximately 4.99% of the Company's issued and outstanding shares.
The following table sets forth certain information as of the Completion Date as to all persons who are known by us to beneficially own more than 5% of our outstanding shares of common stock.
Number of shares
Name and Address of Beneficial Owner (1) Beneficially Owned (2) % of Class Owned (2)
Directors and Officers
Jatinder S. Bhogal (3) 3,713,000 6.53
John Rhee (5) 53,546,248 72.59
5% Shareholders
Light Quantum Energy Holdings
c/o Maples Corporate Services Limited
PO Box 309 51,546,248 71.83
Ugland House, Grand Cayman , KY1-1104
Cayman Islands (1) Beneficial ownership is determined in accordance with
above has direct ownership of and sole voting power and investment power with
respect to the shares of our common stock and except as indicated the address of
each beneficial owner is
(2) Calculated pursuant to rule 13d-3(d) of the Exchange Act. Beneficial ownership is calculated based on 53,198,399 shares of common stock issued and outstanding as of the Completion Date. Under Rule 13d-3(d) of the Exchange Act, . . .
Item 7.01 Regulation FD Disclosure
On
Except for the historical information presented in this document, the matters
discussed in this Report, or otherwise incorporated by reference into this
document, contain "forward-looking statements" (as such term is defined in the
Private Securities Litigation Reform Act of 1995). These statements are
identified by the use of forward-looking terminology such as "believes,"
"plans," "intend," "scheduled," "potential," "continue," "estimates," "hopes,"
"goal," "objective," "expects," "may," "will," "should" or "anticipates" or the
negative thereof or other variations thereon or comparable terminology, or by
discussions of strategy that involve risks and uncertainties. The safe harbor
provisions of Section 21E of the Securities Exchange Act of 1934, as amended,
and Section 27A of the Securities Act of 1933, as amended, apply to
forward-looking statements made by the Registrant. The reader is cautioned that
no statements contained in this Report should be construed as a guarantee or
assurance of future performance or results. These forward-looking statements
involve risks and uncertainties, including those identified within this Report.
The actual results that the Registrant achieves may differ materially from any
forward-looking statements due to such risks and uncertainties. These
forward-looking statements are based on current expectations, and the Registrant
assumes no obligation to update this information. Readers are urged to carefully
review and consider the various disclosures made by the Registrant in this
Report and in the Registrant's other reports filed with the
The information presented in Item 7.01 of this Current Report shall not be deemed to be "filed" for 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, unless the Company specifically states that the information is to be considered "filed" under the Exchange Act or specifically incorporates it by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits
Exhibit No. Description 10.1 Agreement datedDecember 8, 2021 , betweenKalen Capital Corporation and its relevant subsidiaries, including but not necessarily limited toKalen Capital Holdings LLC , andLight Quantum Energy Holdings . 10.2 Corrective Amendment datedDecember 8, 2021 , to the Agreement datedDecember 8, 2021 , betweenKalen Capital Corporation and its relevant subsidiaries, including but not necessarily limited toKalen Capital Holdings LLC ), andLight Quantum Energy Holdings . 10.3 Consent ofKalen Capital Corporation and Light Quantum Energy Holdings to the Company's filing of the Purchase and Sale Agreement and the Corrective Amendment. 99.1 Press release datedDecember 14, 2021 , titled: "Management Acquires SolarWindow Majority Ownership" 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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