Theralink Technologies, Inc. entered into a securities purchase agreement with certain accredited investors and returning investor Cavalry Fund I Management LLC, to issue convertible debentures and accompanying warrant on November 29, 2022. The debentures are discounted, senior, and secured in nature. The principal amount of debentures is $3,355,000. The debentures bear interest at 10% per annum payable upon conversion or maturity. The debentures are convertible into shares of Common Stock at any time after the maturity date and prior to Mandatory Conversion (as defined below) at the conversion price equal to the lesser of $0.003 per share and 70% of the average of the VWAP of the Common Stock during the ten Trading Day period immediately prior to the applicable conversion date. The company will issue warrants to purchase up to 958,571,426 shares of common stock of the company, subject to adjustments provided by the Warrants, which represents 100% warrant coverage. The Warrants are exercisable for five years and six months from the earlier of the maturity date of the Debentures and the closing of the Qualified Financing, at an exercise price equal to in the event that a Qualified Offering is consummated prior to the exercise of the warrant, the price per share at which the Qualified Offering is made or in the event that no Qualified Offering has been consummated, the lower of $0.003 per share and an amount equal to 70% of the average of the VWAP for the common stock over the ten Trading Days preceding the date of the delivery of the applicable exercise notice. The company may hold one or more subsequent closings at any time prior to December 31, 2022, unless otherwise extended, to sell additional Underlying Securities in an aggregate principal amount up to $6,600,000, which may be adjusted upward to mean an aggregate principal amount of $8,000,000. The company will pay a cash placement fee of 10% of the gross cash proceeds raised in the offering, and issue warrants on the terms identical to the Warrants sold in the Offering in an amount equal to 10% of the Underlying Securities sold to investors.
On the same date the company raised $3,050,000 in it's first tranche closing. The debentures mature on November 29, 2023, subject to a three-month extension at the sole discretion of the Company. The company paid $305,000 placement agent fee and a financial advisory fee of $50,000 to Joseph Gunnar & Co. LLC in the transaction. The company paid $50,000 to Olshan Frome Wolosky LLP which acted as legal advisor to Joseph Gunnar & Co. LLC in the transaction. The securities have been issued on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and/or Rule 506 of Regulation D thereunder. The transaction included participation from 12 investors.