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Subsequent Events
6 Months Ended
Jun. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events

Note 15– Subsequent Events

Private Placement

On August 14, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement transaction (the “Private Placement”) (i) 122,412,376 shares (the “Shares”) of the Company’s common stock, par value $0.00001 (“Common Stock”), and (ii) with respect to certain Purchasers, pre-funded warrants to purchase 44,250,978 shares of Common Stock (the “Pre-Funded Warrants”) in lieu of Shares. The purchase price per share of Common Stock is $0.90 per share (the “Purchase Price”), and the purchase price for the Pre-Funded Warrants is the Purchase Price minus $0.001 per Pre-Funded Warrant.

The Pre-Funded Warrants have a per share exercise price of $0.001, subject to proportional adjustments in the event of stock splits or combinations or similar events. The Pre-Funded Warrants will not expire until exercised in full. The Pre-Funded Warrants

may not be exercised if the aggregate number of shares of Common Stock beneficially owned by the holder thereof immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving 61 days’ notice to the Company, but not to any percentage in excess of 19.99%. The Pre-Funded Warrants will only be exercisable upon receipt of stockholder approval of an increase in the authorized shares of the Company's common stock (the “Stockholder Approval”), which the Company will first seek to obtain at a special meeting of stockholders to be held by December 31, 2023. If the Company does not obtain Stockholder Approval by December 31, 2023, it is required to pay liquidated damages of 2.0% of the aggregate purchase price paid by each holder of Pre-Funded Warrants. For any subsequent failure to obtain Stockholder Approval, the Company is required to pay an additional 2.0% as liquidated damages.

The closing of the Private Placement is expected to occur on or before August 16, 2023 (the “Closing”), subject to customary closing conditions. The total gross proceeds to the Company at the Closing are expected to be approximately $150 million, before deducting placement agent commissions and offering expenses payable by the Company.

Under the terms of the Purchase Agreement, the Company has agreed to prepare and file, within 15 days after the Closing (the “Filing Deadline”), one or more registration statements with the Securities and Exchange Commission (the “SEC”) to register for resale the Common Stock issued under the Purchase Agreement and the shares of Common Stock issuable upon conversion of the Pre-Funded Warrants (the “Warrant Shares”) issued pursuant to the Purchase Agreement (together, the “Registrable Securities”), and to cause the applicable registration statements to become effective within a specified period after the Filing Deadline (the “Effectiveness Deadline”). The Company also agreed to use its best efforts to keep such registration statement effective until the earlier of (i) the third anniversary of the Effectiveness Date, as defined in the Purchase Agreement, or (ii) the date all Shares and Warrant Shares (assuming cashless exercise) held by or issuable to a Holder may be sold under Rule 144 without being subject to any volume, manner of sale or publicly available information requirements.

The Company has also agreed, among other things, to pay all Registration Expenses, as defined in the Purchase Agreement, which excludes the fees of legal counsel for any Holder, as defined in the Purchase Agreement. All selling commissions applicable to the sale of Registrable Securities and all fees and expenses of legal counsel for any Holder, as defined in the Purchase Agreement, shall be borne by such Holder.

In the event the registration statement has not been filed by the Filing Deadline or has not been declared effective by the SEC by the Effectiveness Deadline, each as defined in the Purchase Agreement, subject to certain limited exceptions, the Company has agreed to make pro rata payments to each Purchaser as liquidated damages in an amount equal to 1.0% of the Purchaser’s Subscription Amount, as defined in the Purchase Agreement, per 20-day period or pro rata for any portion thereof for each such 20-day period during which such event continues, subject to certain caps set forth in the Purchase Agreement.

The Purchase Agreement contains customary representations, warranties and covenants that were made solely for the benefit of the parties to the Purchase Agreement. Such representations, warranties and covenants (i) are intended as a way of allocating risk between the parties to the Purchase Agreement and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding the terms of transaction and not to provide investors with any other factual information regarding the Company. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures.

The Company has granted the Purchasers customary indemnification rights in connection with the registration statement. The Purchasers have also granted the Company customary indemnification rights in connection with the registration statement.