UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01 Entry Into a Material Definitive Agreement.
Securities Purchase Agreement
On November 7, 2023, TOMI Environmental Solutions, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors (collectively, the “Investors”) pursuant to which the Company agreed to sell and issue to the Investors in a private placement transaction (the “Private Placement”) in one or more closings up to an aggregate principal amount of $5,000,000 (the “Notes”). As of November 7, 2023, the Company issued and sold an aggregate of $2,600,000 of Notes to certain Investors pursuant to the SPA.
The gross proceeds to the Company from the transaction are approximately $2,600,000, before deducting the placement agent’s fees and other estimated offering expenses. The Company intends to use the net proceeds from this offering for working capital and other general corporate purposes. The initial closing of the Private Placement is expected to occur on November 7, 2023, subject to satisfaction of customary closing conditions.
The Notes are due on the fifth anniversary of their issuance and bear simple interest at a rate of 12% per annum, payable in equal monthly installments. The Notes are convertible at any time into shares of the Company’s common stock, par value $0.01 (the “Common Stock”), at the option of the holder at a conversion price of $1.25 per share, as adjusted, which shall not exceed $1.55 per share. In addition, the Company can require Investors to convert the Notes at the then current conversion price at any time after 90 days from the issue date if the Common Stock has a closing bid price of $1.55 per share or higher on the Nasdaq Capital Market for any twenty (20) days within a thirty (30) day period of consecutive trading days, or if a “fundamental change” occurs (as defined in the SPA). The Notes are unsecured and senior to other indebtedness of the Company subject to certain exceptions.
The offer and sale of the Notes pursuant to the SPA is not registered under the Securities Act of 1933, as amended (the “Securities Act”), as it is exempt from registration pursuant to Section 4(a)(2) thereof and Rule 506(b) promulgated thereunder.
The SPA includes customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, certain other obligations of the parties and termination provisions.
Registration Rights Agreement
In addition, pursuant to the SPA, the Company entered into a Registration Rights Agreement (“RRA”) dated November 7, 2023, with each Investor requiring the Company to register the resale of the underlying Common Stock from the conversion of the Notes. The Company is required to prepare and file an initial registration statement with the Securities and Exchange Commission (the “SEC”) as soon as reasonably practicable, but in no event later than 60 calendar days following the date of the initial closing under the SPA (the “Filing Deadline”), and to use commercially reasonable efforts to have the registration statement declared effective within 90 calendar days of the Filing Deadline.
The foregoing descriptions of the SPA, the Note, the RRA and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the forms of such documents which are filed as Exhibits 10.1, 10.2, and 10.3, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities
The information contained above in Item 1.01 related to the SPA, Notes, and Registration Rights Agreement is hereby incorporated by reference into this Item 3.02.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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| Form of TOMI Environmental Solutions, Inc. 12% Convertible Note. | |
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104 |
| Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 7, 2023
TOMI ENVIRONMENTAL SOLUTIONS, INC. | |||
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| By: | /s/ Halden Shane |
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| Name: | Halden Shane |
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| Title: | Chief Executive Officer |
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