UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
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 a Material Definitive Agreement.
Senior Secured Convertible Promissory Notes
On May 1, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Purchasers”). Pursuant to the Purchase Agreement, the Company sold the Purchasers: (i) senior convertible notes in the aggregate original principal amount of $1,850,000, (the “Notes”) convertible into up to 4,625,000 shares of common stock of the Company, par value $0.001 per share (“Common Stock”), subject to adjustments as provided in the Notes, (ii) 925,000 shares of Common Stock (the “Commitment Shares”), (ii) warrants to initially acquire up to an aggregate of 4,625,000 additional shares of Common Stock (the “Warrants”) at an exercise price of $0.85 per Warrant Share. The Warrants are exercisable for cash only, provided there is an effective Registration Statement registering the shares exercisable upon exercise of the Warrant. The Company has received gross proceeds of $1,850,000 in connection with the closing of the financing. The conversion price of the Notes is $0.40 per share, subject to adjustments as provided in the Notes.
The maturity date of the Notes is eighteen months from the issuance date of the Notes. Interest on the unpaid principal balance of the Notes accrues at 12% per annum, payable in arrears for on the first calendar day of each calendar month. Subject to the conversion of the Notes, any accrued interest outstanding is payable in full on the maturity date of the Notes.
The Notes are subject to customary events of default including the failure to pay principal and interest when due or bankruptcy by the Company. Upon the occurrence of an event of default, the unpaid portion of the principal amount will bear simple interest from the date of the event of default at a rate equal to 18% per annum, for the duration from such event of default until the cure of such default or the repayment date of the entire outstanding balance of the Note.
The Warrants are exercisable at any time after the six (6) month and one (1) day anniversary of the date of issuance until May 1, 2029, at an exercise price of $0.85 per Warrant Share, subject to adjustments as provided in the Warrants. The Warrants are exercisable for cash only, provided there is an effective Registration Statement registering the shares exercisable upon exercise of the Warrant.
Pursuant to the Purchase Agreement, the Company and the Purchasers entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement to register the shares of common stock underlying the Notes and the Warrants within ten (10) days after the closing and to have such registration statement effective within seventy (70) days of the closing (or the second business day after the Company is notified by the Securities and Exchange Commission that such registration statement will not be reviewed or subject to further review).
The foregoing summary of the Purchase Agreement, the Notes, the Warrants and the Registration Rights Agreement are qualified by reference to the full text of such documents, copies of which are filed as exhibits to this report and 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 and 9.01 of this Current Report on Form 8-K 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 is incorporated herein reference, to the extent required. Based in part upon the representations of the Investor and the Purchasers, to the Company, including that they are an “accredited investor” as defined under Rule 501(a) of Regulation D, the shares of Common Stock issuable under the Purchase Agreement, upon conversion of the Notes or upon exercise of the Warrant, will be exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
| 4.1 | Form of Warrant |
| 10.1 | Form of the Purchase Agreement |
| 10.2 | Form of the Note |
| 10.3 | Form of Registration Rights Agreement |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 hereunto duly authorized.
Date: May 7, 2024
| SPLASH BEVERAGE GROUP, INC. | |
| /s/ Robert Nistico | |
| Robert Nistico | |
| Chief Executive Officer |