Item 1.01. Entry into a Material Definitive Agreement.
On
The Note carries an interest rate of 6% per annum and matures on the 12-month
anniversary of the Issuance Date (as defined in the Note). The Note contains a
voluntary conversion mechanism whereby the Noteholder may convert at any time
after the Issuance Date, in whole or in part, the outstanding balance of the
Note into shares of the Common Stock at a conversion price of
Pursuant to the Purchase Agreement, the Investor received a Warrant in an amount
equal to 250% of the shares of Common Stock initially issuable to each Investor
pursuant to the Investor's Note. The Warrant contains an exercise price of
The Company also entered into a Registration Rights Agreement with the Investor
(the "Registration Rights Agreement"). The Registration Rights Agreement
provides that the Company shall (i) file with the
The foregoing provides only brief descriptions of the material terms of the Purchase Agreement, the Note, the Warrant and the Registration Rights Agreement and does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are qualified in their entirety by reference to the full text of the forms of the Purchase Agreement, the Note, the Warrant and the Registration Rights Agreement filed as exhibits to this Current Report on Form 8-K, and are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant.
The applicable information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
Item 3.02. Unregistered Sales of
Item 1.01 is hereby incorporated by reference.
The applicable information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.02. The Note, Warrant, Conversion Shares, and Warrant Shares were not registered under the Securities Act, but qualified for exemption under Section 4(a)(2) and/or Regulation D of the Securities Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuance of such securities by the Company did not involve a "public offering," as defined in Section 4(a)(2) of the Securities Act, due to the insubstantial number of persons involved in the transaction, size of the offering, manner of the offering and number of securities offered. The Company did not undertake an offering in which it sold a high number of securities to a high number of investors. In addition, the Investors had the necessary investment intent as required by Section 4(a)(2) of the Securities Act since the Investors agreed to, and received, the securities bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a "public offering." Based on an analysis of the above factors, the Company has met the requirements to qualify for exemption under Section 4(a)(2) of the Securities Act.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits. Exhibit No. Description 4.1 Form of Senior Convertible Note 10.1 Form of Securities Purchase Agreement 10.2 Form of Warrant 10.3 Form of Registration Rights Agreement
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