Item 1.01 Entry into a Material Definitive Agreement

On January 6, 2023, Connexa Sports Technologies Inc. (the "Company") entered into a loan and security agreement (the "Loan and Security Agreement") with a one or more institutional investors (the "Lenders") and Armistice Capital Master Fund Ltd. as agent for the Lenders (the "Agent") for the issuance and sale of (i) a note in an aggregate principal amount of up to $2,000,000 (the "Note") with the initial advance under the Loan and Security Agreement being $1,400,000 and (ii) warrants (the "Warrants") to purchase a number of shares of common stock of the Company equal to 200% of the face amount of the Note divided by the closing price of the common stock of the Company on the date of the issuance of the Notes (collectively, the "Initial Issuance"). The closing price of the Company's common stock on January 6, 2023, as reported by Nasdaq, was $0.221 per share, so the Warrants in respect of the initial advance under the Note are exercisable for up to 18,099,548 shares of the Company's common stock. The Warrants have an exercise price per share equal to the closing price of the common stock of the Company on the date of the issuance of the Note, or $0.221 per share and a term of five- and one-half (5½) years following the initial exercise date. The initial exercise date of the Warrants will be the date stockholder approval is received and effective allowing exercisability of the Warrants under Nasdaq rules. Pursuant to the terms of the Loan and Security Agreement, an additional advance of $600,000 may be made by to the Company under the Note. The Company's obligations under the terms of the Loan and Security Agreement are fully and unconditionally guaranteed by all of the Company's subsidiaries (the "Guarantors").

In connection with the Loan and Security Agreement, the Company and each of the Guarantors entered into a pledge and security agreement with the Agent (the "Pledge and Security Agreements"). The Pledge and Security Agreements provide that the Company and the Guarantors will grant the Agent a security interest in all of the Company's and each Guarantor's respective assets.

The Company is required to use the net proceeds from the Loan and Security Agreement to pay expenses, including accounting and legal fees, relating to the registration of certain previously issued securities of the Company, which securities were issued to an affiliate of the Agent, and following the payment of such expenses, to fund the Company's operations.

The foregoing description of the terms of the Loan and Security Agreement, the Note, the Warrants, the Pledge and Security Agreement, and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the form of Loan and Security Agreement, the form of Note, the form of Warrants, and the form of Pledge and Security Agreement filed as Exhibits 10.1, 10.2, 10.3, and 10.4, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The applicable information set forth in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference in this Item 3.02.

The Note, the Warrants and the shares of common stock of the Company issuable upon exercise of the Warrants (collectively, the "Securities") have not been registered for sale under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements. The issuance and sale of the Securities made in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder. No form of general solicitation or general advertising was conducted in connection with the issuance. The Securities contain (or will contain, where applicable) restrictive legends preventing the sale, transfer, or other disposition of such Securities, unless registered under the Securities Act, or pursuant to an exemption therefrom. The disclosure contained in this Current Report on Form 8-K does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company, and is made only as required under applicable rules for filing current reports with the Securities and Exchange Commission.





Exhibit No.   Description
10.1*           Form of Loan and Security Agreement
10.2            Form of Note
10.3            Form of Warrant
10.4*           Form of Pledge and Security Agreement
104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document)

* The schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(10). The Company agrees to furnish supplementally a copy of any omitted schedule to the U.S. Securities and Exchange Commission upon its request.

© Edgar Online, source Glimpses