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. |
As previously disclosed in our Current Report on Form 8-K filed on February 16, 2022 (the “Prior 8-K”), Romeo Power, Inc. (the “Company”) entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”), pursuant to which the Company shall have the right, but not the obligation, to sell to Yorkville up to $350,000,000 of its shares of common stock at the Company’s request any time during the 24 months following the execution of the SEPA. Each sale the Company requests under the SEPA (an “Advance”) may be for a number of shares of common stock with an aggregate value of up to $25,000,000. The shares would be purchased at 96.25% of the Market Price (as defined below) and would be subject to certain limitations, including that Yorkville could not purchase any shares that would result in it owning more than 9.99% of the Company’s common stock. “Market Price” is defined as the average of the VWAPs (as defined below) during each of the three consecutive trading days commencing on the trading day following the date the Company submits an Advance notice to Yorkville. “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s common stock for such date on the New York Stock Exchange as reported by Bloomberg L.P. during regular trading hours.
On February 28, 2022, the Company and Yorkville amended the SEPA pursuant to that certain Amendment No. 1 to Standby Equity Purchase Agreement, dated February 28, 2022 (the “SEPA Amendment”), to revise the definition of “Commitment Amount” to clarify that, as to any Advance, the issuance of Shares (as defined in the SEPA) in respect of such Advance would be excluded from the Exchange Cap (as defined in the SEPA) if the Purchase Price (as defined in the SEPA) paid for such Shares equals or exceeds the Minimum Price (as defined in Section 312.03 of the NYSE Listed Company Manual) applicable to such Advance.
As disclosed in the Prior 8-K, in addition to the Company’s right to request Advances, the Company may also request one or more pre-advance loans (each, a “Pre-Advance Loan”) from Yorkville, each request not to exceed $20,000,000 and pursuant to the terms and conditions set forth in the SEPA and the accompanying promissory note attached thereto. Pre-Advance Loans may be repaid with the proceeds of an Advance or repaid in cash.
Also as disclosed in the Prior 8-K, pursuant to the SEPA, the Company (i) is required to register all shares which Yorkville may acquire and file with the Securities and Exchange Commission a prospectus supplement to the Company’s prospectus, dated February 3, 2022, filed as part of the Company’s effective shelf registration statement on Form S-3, File No. 333-262355 (the “Registration Statement”), registering the shares of Common Stock that are to be offered and sold to Yorkville pursuant to the SEPA and (ii) currently intends to use the net proceeds from any sale of the shares for working capital and other general corporate purposes or, if different, in a manner consistent with the application thereof described in the Registration Statement. There are no other restrictions on future financing transactions. The SEPA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We are not required to pay any additional amounts to reimburse or otherwise compensate Yorkville in connection with the transaction except for a $10,000 structuring fee.
The Company is filing the opinion of its counsel, Paul Hastings LLP, regarding the validity of the shares issued pursuant to the SEPA (as amended), as Exhibit 5.1 hereto.
The foregoing is a summary description of certain terms of the SEPA and the SEPA Amendment. For a full description of all terms, please refer to the copy of the SEPA and the SEPA Amendment that is filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K, each of which is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
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.
| ROMEO POWER, INC. | |||
| Date: | March 2, 2022 | By: | /s/ Matthew Sant |
| Name: | Matthew Sant | ||
| Title: | General Counsel and Secretary | ||