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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Item 1.01 |
| Entry into a Material Definitive Agreement. |
Convertible Notes and Warrants offering
On February 8, 2021, General Cannabis Corp. (the “Company”), entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an accredited investor (the “Investor”), pursuant to which the Company issued and sold convertible notes (the “Notes”) with an aggregate principal amount of $1,660,000 to such Investor. The Notes are part of an over-allotment option exercised by the Company in connection with the convertible note offering consummated on December 23, 2020 and reported on a Current Report on Form 8-K filed on December 30, 2020 (“December 2020 Form 8-K”).
In connection with the issuance of the Notes, the holder received warrants (the “Warrants”) to purchase shares of the Company’s common stock equal to 20% coverage of the aggregate principal amount at $0.56 per share. In the aggregate, this equals 592,858 shares of the Company’s common stock with a par value $0.001 per share (the “Common Stock”).
The Notes will bear interest at an annual rate of 10% and will mature on February 8, 2024 (the “Maturity Date”). The Investor has the option to convert up to 50% of the outstanding unpaid principal and accrued interest of the Notes into Common Stock at a variable price of 80% of the market price but no less than $0.65 per share and no more than $1.00 per share. The Warrants are exercisable at an exercise price of $0.56 per Warrant, subject to adjustment as provided in the Warrants, at any time prior to the earlier of the Maturity Date and an Acquisition (as defined in the Warrants).
The foregoing descriptions of the Notes, Warrants and Securities Purchase Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the agreements, copies of which are attached to the December 2020 Form 8-K as Exhibits 10.1, 10.2 and 10.3, respectively, 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 a Registrant. |
The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the Notes is incorporated herein by reference.
Item 3.02. |
| Unregistered Sales of Equity Securities. |
The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the Warrants is incorporated herein by reference. The Warrants, and any shares of Common Stock issued upon exercise of the Warrants, if applicable, will be issued to the Investor in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereof.
SIGNATURES
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 thereunto duly authorized.
Dated: February 10, 2021
| GENERAL CANNABIS CORP | |
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| By: | /s/ Steve Gutterman |
| Name: | Steve Gutterman |
| Title: | Chief Executive Officer |