Item 1.01 Entry into a Material Definitive Agreement.
On March 3, 2020, Remark Holdings, Inc. ("Remark," "we," "us" or "our") entered
into a common stock purchase agreement (the "Purchase Agreement") with Aspire
Capital Fund, LLC, an Illinois limited liability company ("Aspire Capital"),
which provides that, upon the terms and subject to the conditions and
limitations set forth therein, we have the right to direct Aspire Capital to
purchase up to an aggregate of $30.0 million of shares of our common stock over
the 30-month term of the Purchase Agreement. In consideration for entering into
the Purchase Agreement, we have agreed to issue to Aspire 2,374,545 shares of
our common stock.
Under the Purchase Agreement, on any trading day selected by us over the
30-month term of the Purchase Agreement, we have the right, in our sole
discretion, to present Aspire Capital with a purchase notice (each, a "Purchase
Notice") directing Aspire Capital to purchase up to 250,000 shares of our common
stock per trading day, up to an aggregate of $30.0 million of our common stock,
at a per share price (the "Purchase Price") equal to the lesser of (i) the
lowest sale price of our common stock on the purchase date or (ii) the
arithmetic average of the three lowest closing sale prices for our common stock
during the 10 consecutive trading days ending on the trading day immediately
preceding the purchase date.
The aggregate purchase price payable by Aspire Capital on any one purchase date
may not exceed $500,000, unless otherwise mutually agreed. The parties may
mutually agree to increase the number of shares of our common stock that may be
purchased per trading day pursuant to the terms of the Purchase Agreement to an
additional 2,000,000 shares.
In addition, on any trading day on which we submit a Purchase Notice to Aspire
Capital to purchase at least 250,000 shares, we also have the right, in our sole
discretion, to present Aspire Capital with a volume-weighted average price
purchase notice (each, a "VWAP Purchase Notice") directing Aspire Capital to
purchase an amount of our common stock equal to up to 30% of the aggregate
shares of our common stock traded on the next trading day (the "VWAP Purchase
Date"), subject to a maximum number of shares we may determine, and a minimum
purchase price threshold equal to the greater of (i) 80% of the closing price of
our common stock on the trading day immediately preceding the VWAP Purchase Date
or (ii) a higher price that may be determined by us. The purchase price per
share pursuant to such VWAP Purchase Notice will be equal to the lesser of (i)
the closing sale price of our common stock on the VWAP Purchase Date, or (ii)
97% of the volume-weighted average price for our common stock traded on its
principal market on the VWAP Purchase Date.
We may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire
Capital from time to time during the term of the Purchase Agreement, so long as
the most recent purchase has been completed.
In addition, Aspire Capital will not be required to buy any shares of our common
stock pursuant to a Purchase Notice on any trading day on which the closing
trade price of our common stock is below $0.25. There are no trading volume
requirements or restrictions under the Purchase Agreement, and we will control
the timing and amount of sales of our common stock to Aspire Capital. Aspire
Capital has no right to require any sales by us, but is obligated to make
purchases from us as directed by us in accordance with the Purchase Agreement.
There are no limitations on use of proceeds, financial or business covenants,
restrictions on future fundings, rights of first refusal, participation rights,
penalties or liquidated damages in the Purchase Agreement. The Purchase
Agreement may be terminated by us at any time, at our discretion, without any
cost to us. Aspire Capital has agreed that neither it nor any of its agents,
representatives and affiliates will engage in any direct or indirect
short-selling or hedging our common stock during any time prior to the
termination of the Purchase Agreement.
The Purchase Agreement provides that the total number of shares that may be
issued pursuant to such agreement is limited to 11,007,726 shares (the "Exchange
Cap"), or 19.99% of our shares of common stock outstanding as of the date of the
Purchase Agreement, unless stockholder approval is obtained in accordance with
the rules of the Nasdaq Stock Market. If stockholder approval is not obtained,
such limitation will not apply after the Exchange Cap is reached if at all times
thereafter the average purchase price paid for all shares issued under the
Purchase Agreement is equal to or greater than $0.4879 per share. The Purchase
Agreement also provides that at no time will Aspire Capital (together with its
affiliates) beneficially own more than 19.99% of our outstanding shares of
common stock.
Concurrently with entering into the Purchase Agreement, we also entered into a
registration rights agreement with Aspire Capital (the "Registration Rights
Agreement"), in which we agreed to file with the Securities and Exchange
Commission (the "SEC") one or more registration statements, as necessary, and to
the extent permissible and subject to certain exceptions, to register under the
Securities Act of 1933, as amended, for the sale of the shares of our common
stock that have been and may be issued to Aspire Capital under the Purchase
Agreement. We expect to file with the SEC a prospectus supplement to our
effective shelf Registration Statement on Form S-3 (File No. 333-225448)
registering all of the shares of common stock that may be offered to Aspire
Capital from time to time.
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The foregoing descriptions of the Purchase Agreement and the Registration Rights
Agreement do not purport to be complete and are qualified in their entirety by
reference to the full text of such documents, which are attached hereto as
Exhibits 10.1 and 4.1, respectively, and are incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
On March 3, 2020, the Purchase Agreement replaced a prior common stock purchase
agreement, dated as of March 29, 2019, between us and Aspire Capital, which was
terminated under the terms of the Purchase Agreement.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
4.1 Registration Rights Agreement, dated as of March 3, 2020, by and
between Remark Holdings, Inc. and Aspire Capital Fund, LLC.
10.1 Common Stock Purchase Agreement, dated as of March 3, 2020, by and
between Remark Holdings, Inc. and Aspire Capital Fund, LLC.
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