Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed in a Current Report on Form 8-K filed by Bloomios, Inc.
(the "Company") on October 31, 2022 (the "October 8-K"), the Company, on October
26, 2022, completed an offering of 15.0% Original Issue Discount Senior Secured
Convertible Debentures (the "Debentures").
On November 15, 2022, the Company had a second closing of its offering of
Debentures. The Debentures issued on November 15, 2022 have an aggregate
principal amount of approximately $852,941 (including a 15% original issue
discount) and were issued to five (5) holders. The cash proceeds of the November
15, 2022 Debenture closing were used to finance operations and transaction fees.
Although the Debentures were issued on November 15, 2022, the maturity date of
the Debentures remains October 26, 2024 and the date of each of the Securities
Purchase Agreement (the "SPA") between the Company and the holders of the newly
issued Debentures and Security Agreement by and among the Company, the Company's
subsidiaries, the holders of the newly issued Debentures, and the agent for the
holders (the "Security Agreement") was October 26, 2022.
The terms of the Debentures, the SPA, and the Security Agreement for the second
closing of the offering of Debentures was substantially the same as the terms
described in the October 8-K which description is incorporated by reference
herein.
In addition, pursuant to the SPA, the holders of the Debentures were each issued
a warrant (the "Warrant") to purchase shares of the Company's common stock, par
value $0.00001 per share (the "Common Stock"). Each Warrant provides for the
purchase by the applicable holder of Debentures of a number shares of Common
Stock equal to the total principal amount of the Debenture purchased by such
holder divided by the average of the VWAP of the Common Stock during the ten
(10) trading day period immediately prior to October 26, 2022. The exercise
price of the Warrants is 125% of the conversion price of the Debentures. A total
of 459,797 Warrants were issued on November 15, 2022.
Pursuant to the SPA, the holders of the Debentures were each issued a number of
shares of Common Stock (the "Incentive Shares") equal to 35% of such holder's
subscription amount (without regard for any beneficial ownership limitations)
divided by the lower of (i) the closing price of the Common Stock on October 26,
2022 or (ii) the average of the VWAP of the Common Stock during the ten (10)
trading day period immediately prior to October 26, 2022. A total of 109,432
shares of Common Stock were issued on November 15, 2022.
The Warrants and Incentive Shares issued on November 15, 2022 equal less than
five percent (5%) of the shares of Common Stock outstanding on that date.
The foregoing summary of the Debentures, the SPA, the Security Agreement, and
the Warrants contains only a brief description of the material terms of the
Debentures, the SPA, the Security Agreement, and the Warrants and such
description is qualified in its entirety by reference to the full text of each
of the Debentures, the SPA, the Security Agreement, and the Warrants, forms of
which were filed as Exhibits 4.1, 10.2, 10.3 and 4.2, respectively, to the
October 8-K and which are incorporated by reference herein.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The applicable information regarding the Debentures set forth in Item 1.01 of
this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
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