UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENT.
October 2022 Securities Purchase Agreement
On October 27, 2022, Live Current Media Inc. (the "Company") entered into a Securities Purchase Agreement (the "Purchase Agreement"), pursuant to which the Company has agreed to sell, for gross proceeds of $500,000, an Original Issue Discount Senior Convertible Promissory Note (the "Convertible Note") having an aggregate principal amount of $540,000 and warrants (the "Warrants") to purchase up to 2,250,000 shares of the Company's common stock (the "Warrant Shares").
The Convertible Note matures 24 months after issuance, bears interest at a rate of 4% per annum and is convertible into shares of the Company's common stock (the "Conversion Shares") at an initial conversion price of $0.18 per share, subject to adjustment for certain stock splits, stock combinations and dilutive share issuances. The Company may prepay the Convertible Note at any time prior to the maturity date. The Convertible Notes contain a number of customary events of default. Additionally, the Convertible Notes are secured by all of the assets of the Company, including a lien on and security interest in all of the issued and outstanding equity interests of the wholly-owned subsidiaries of the Company, pursuant to a security agreement between the Company and the lead investor under the Purchase Agreement (the "Lead Investor") dated as of February 15, 2022 (the "Security Agreement").
The Warrants are exercisable at an initial exercise price of $0.32 per share for a term ending on the 5 year anniversary of the date of issuance. The exercise price of the Warrants are subject to adjustment for certain stock splits, stock combinations and dilutive share issuances.
In addition to the forgoing, until such time as there are no Convertible Notes outstanding, if the Company proposes to offer and sell any securities of the Company in a subsequent financing, the Lead Investor may elect to surrender its Convertible Notes and Warrants for securities of the same type offered in such subsequent financing on the same terms and conditions as that subsequent financing. Subject to stated exceptions described in the Purchase Agreement, without the prior consent of the Lead Investor, the Company is prohibited from incurring any debt, filing registration statements, entering into any variable rate transactions while the Convertible Notes are outstanding, and until the earlier of 12 months after the date of the Purchase Agreement or the Convertible Notes are no longer outstanding.
The Convertible Notes and Warrants may not be converted or exercised by the holder if, after give effect to such conversion or exercise, the holder would beneficially own greater than 4.99% of the Company's outstanding common stock, provided that the holder may, on not less than 61 days prior written notice to the Company, increase the limitation to 9.99% of the Company's outstanding common stock.
In connection with the Offering, the Company also entered into a registration rights agreement (the “Registration Agreement”) with the Lead Investor, pursuant to which the Company has agreed to file a registration statement (a “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) to register the resale of the Conversion Shares and the Warrant Shares by no later than January 16, 2023, and to use commercially reasonable efforts to have the Registration Statement declared effective within 60 days after filing. The Company paid to Carter, Terry and Company a cash fee of $40,000 and issued an aggregate of 72,202 shares in the common stock of the Company as finders fees in connection with the offer and sale of the Convertible Note and the Warrants.
The Offering was completed pursuant to the exemptions from registration provided by Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the "Securities Act"), on the basis that the investor is an "accredited investor" as defined in Rule 501 of Regulation D. The offer and sale of the Convertible Notes, Conversion Shares, Warrants and Warrant Shares have not been registered under the Securities Act and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements of the Securities Act, and in each case in compliance with applicable state securities laws.
The above description of the terms and conditions of the Purchase Agreement, Convertible Notes, Warrants, Security Agreement and Registration Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of such agreements and instruments, copies of which are attached as exhibits to this Current Report on Form 8-K and is incorporated by reference herein.
Amendment to February 2022 Securities Purchase Agreement
Concurrent with the entry into the Purchase Agreement and the issuance by the Company of the Convertible Note and the Warrants, the Company entered into an amendment agreement with the Lead Investor (the "Amendment Agreement") to that Securities Purchase Agreement dated February 15, 2022 (the "February 2022 Purchase Agreement") and the transaction documents thereunder (the "Transaction Documents"). Pursuant to the terms of the Amendment Agreement, the Company agreed to amend the conversion price of the convertible notes issued pursuant to the February 2022 Purchase Agreement from $0.34 per share to $0.18 per share, and the parties agreed that the Lead Investor is not obligated to fund the second tranche under the February 2022 Purchase Agreement.
The above description of the terms and conditions of the Amendment Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of such agreement, copies of which are attached as exhibits to this Current Report on Form 8-K and is incorporated by reference herein.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information set forth in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03 in its entirety.
ITEM 3.02 UNREGISTERED SALE OF EQUITY SECURITIES.
The information set forth in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.02 in its entirety.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
The following exhibits are provided with this Current Report:
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Form of Original Issue Discount Senior Convertible Promissory Note. |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Certain information in these exhibits has been omitted because it is both not material and the type of information that the registrant treats as private or confidential.
(1) Filed as an exhibit to the Company's Current Report on Form 8-K filed on February 16, 2022.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LIVE CURRENT MEDIA INC. | ||
| Date: November 1, 2022 | ||
| By: | /s/ David M. Jeffs | |
| David M. Jeffs | ||
| President | ||