Item 1.01. Entry into a Material Definitive Agreement
On
By way of background, immediately prior to the transactions reported hereby, The
Company was indebted to the Note Holder in the aggregate principal amount of
Conversion of
In connection with the Fourth Amendment, the Note Holder has agreed to convert
aggregate principal and accrued interest of
As of the Effective Date, the Company and Note Holder have agreed that the
Company will issue the Note Holder 29,432,320 shares of Company Preferred Stock
in full and complete satisfaction of (i) all amounts owing under the 2016
Convertible Notes through
Under the terms of the Fourth Amendment, the Preferred Stock shall be (i) voting shares, with the same voting rights as common shares, except the Preferred Stock shall have no vote in respect of election of directors, (ii) entitled to such dividends as the Board of Directors of the Company may in its discretion declare (and no dividends may be declared on the Company's other classes of shares unless a dividend is declared on the Preferred Stock), (iii) have a preference in liquidation ahead of all other classes of Company shares, (iv) be entitled upon a sale of the Company (to be further defined in definitive agreements) to receive the consideration that would be payable in respect of that number of shares of common stock of the Company equal to the number of shares of Preferred Stock (on a one-for one basis with the Company common stock), and (v) otherwise on such other terms and conditions as are mutually agreeable and not inconsistent with the foregoing.
The consummation of the foregoing transaction is subject to (i) authorization
and issuance of the Preferred Stock, which is subject to approval of the
requisite number of common shares of the Company, in accordance with
The Company and Note Holder have undertaken to consummate the foregoing
transactions prior to
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Amendment of Terms of
The Fourth Amendment also amends the Amended SPA Notes (aggregate principal
amount of
1. Interest Rate. The interest rate per annum in respect of outstanding principal under the Amended SPA Notes shall be eight (8%) percent computed on a simple interest basis. 2. Interest Payments. a. Interest on unpaid principal of the Amended SPA Notes ($10 million ) with respect to the period ofDecember 1, 2020 throughNovember 30, 2021 may be paid by the Company in kind by issuing a non-interest bearing note (a "PIK Note") in the amount of$800,000 onNovember 30, 2021 with a maturity date ofNovember 30, 2025 . If no PIK Note is issued on such date, accrued and unpaid principal shall be payable in cash. b. Interest on unpaid principal of the Amended SPA Notes with respect to the period ofDecember 1, 2021 throughNovember 30, 2022 may be paid by the Company in kind by issuing a PIK Note in the amount of$800,000 onNovember 30, 2022 with a maturity date ofNovember 30, 2025 . If no PIK Note is issued on such date, accrued and unpaid principal shall be payable in cash. c. The PIK Notes issued by the Company pursuant to the previous two paragraphs shall be in the form attached to the Securities Purchase Agreement dated as ofSeptember 26, 2016 , as amended, pursuant to the which the Amended SPA Notes were issued, subject to revisions necessary to make such PIK Notes non-convertible and non-interest bearing. d. Interest on unpaid principal with respect to the period ofDecember 1, 2022 throughNovember 30, 2025 shall be payable quarterly in arrears commencingFebruary 28, 2023 . 3. Termination of Conversion Feature. The convertibility of the Amended SPA Notes is terminated. 4. Extension of Maturity Date. The Maturity Date of the Amended SPA Notes is extended toNovember 30, 2025 .
Except as modified by the Fourth Amendment, the Notes, as previously amended, remain in full force and effect.
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