Item 2. Unregistered Sales of Equity Securities
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
Pursuant to the Secured SPA, Unsecured SPA and Unsecured Streeterville SPA, each as amended or supplemented, the Company sold approximately $4.2 million in principal amount of SPA notes to investors since the filing of Item 3.02. Unregistered Sales of Equity Securities in the Form 8-K filed on October 18, 2023. The Company may sell an additional approximately $85.1 million in principal amount of SPA Notes. The SPA Notes were issued, to the extent issued, or will be issued, to the extent unissued, pursuant to the exemption from registration requirements of the Securities Act, provided by Section 4(a)(2) thereof. See “Part I, Item 1. Financial Statements—Note 7, Notes Payable” for additional information regarding the SPA Notes.
The SPA Notes, upon the funding, may be converted into shares of Class A Common Stock on a cashless basis at any time, at the request of the holders subject to the availability of registered shares or the note holder satisfying the holding period pursuant to Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended (the “Securities Act”). As of November 9, 2023, the principal conversion price of the SPA Notes was $1.05 per share and the interest make whole conversion price was $3.6320 per share. The principal conversion price is subject to a anti-dilution adjustments, including full ratchet price protection if the
73
Company has a subsequent equity sale below $1.05 per share, subject to certain exceptions set forth in the convertible notes. For every $1.0 million of notes converted, the Company would issue 10,235,408, 1,187,789, 1,123,381, and 1,037,881 shares at a hypothetical per share price of Class A Common Stock of $0.10, $3.00, $5.00, and $10.00, respectively.
The shares to be issued upon conversion of the principal amounts under the convertible notes to each of the holders, will be issued pursuant to the exemption from the registration requirements of the Securities Act, provided by Section 3(a)(9) thereof.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.