NVN LIQUIDATION, INC. Item 1.01. Entry into a Material Definitive Agreement.
Purchase Agreement and Registration Rights Agreement with Aspire Capital
On
• the arithmetic average of the three (3) lowest closing sale prices for the
Company's common stock during the ten (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
2,000,000 shares.
In addition, on any date on which the Company submits a Purchase Notice to
Aspire Capital in an amount equal to 300,000 shares, the Company also has the
right, in its 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 stock equal to up to 30% of the aggregate
shares of the Company's common stock traded on its principal market on the next
trading day (the "VWAP Purchase Date"), subject to a maximum number of shares
the Company may determine. The purchase price per share pursuant to such VWAP
Purchase Notice is generally 97% of the volume-weighted average price for the
Company's common stock traded on its principal market on the VWAP Purchase Date.
The Purchase Price will be adjusted for any reorganization, recapitalization,
non-cash dividend, stock split, or other similar transaction occurring during
the period(s) used to compute the Purchase Price. The Company 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.
The Purchase Agreement provides that the Company and Aspire Capital shall not
effect any sales under the Purchase Agreement on any purchase date where the
closing sale price of the Company's common stock is less than $0.15 . There are
no trading volume requirements or restrictions under the Purchase Agreement, and
the Company will control the timing and amount of sales of the Company's common
stock to Aspire Capital . Aspire Capital has no right to require any sales by the
Company, but is obligated to make purchases from the Company as directed by the
Company in accordance with the Purchase Agreement. There are no limitations on
use of proceeds, financial or business covenants, restrictions on future
financing transactions, rights of first refusal, participation rights, penalties
or liquidated damages in the Purchase Agreement. In consideration for entering
into the Purchase Agreement, upon satisfaction of certain conditions under the
Purchase Agreement, the Company issued to Aspire Capital 1,449,275 shares of the
Company's common stock (the "Commitment Shares"). The Purchase Agreement may be
terminated by the Company at any time, at its discretion, without any penalty or
additional cost to the Company. Aspire Capital has agreed that neither it nor
any of its agents, representatives and affiliates shall engage in any direct or
indirect short-selling or hedging of the Company's common stock during any time
prior to the termination of the Purchase Agreement. Any proceeds the Company
receives under the Purchase Agreement are expected to be used for working
capital and general corporate purposes.
The Purchase Agreement provides that the number of shares that may be sold
pursuant to the Purchase Agreement will be limited to 15,859,487 shares (the
"Exchange Cap"), which represents 19.99% of the Company's outstanding shares of
common stock on June 15, 2020 , unless stockholder approval or an exception
pursuant to the rules of the Nasdaq Global Market is obtained to issue more than
19.99%. This limitation will not apply if, at any time the Exchange Cap is
reached and at all times thereafter, the average price paid for all shares
issued under the Purchase Agreement is equal to or greater than $0.414 , which is
the price equal to the closing sale price of the Company's common stock
immediately preceding the execution of the Purchase Agreement. The Company is
not required or permitted to issue any shares of common stock under the Purchase
Agreement if such issuance would breach its obligations under the rules or
regulations of the Nasdaq Global Market. The Company may, in its sole
discretion, determine whether to obtain stockholder approval to issue more than
19.99% of its outstanding shares of Common Stock hereunder if such issuance
would require stockholder approval under the rules or regulations of the Nasdaq
Global Market.
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 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, the sale
of the shares of our common stock that may be issued to Aspire Capital under the
Purchase Agreement. We have filed with the SEC a prospectus supplement to our
effective shelf Registration Statement on Form S-3 (File No. 333-236583)
registering all of the shares of common stock that may be offered to Aspire
Capital --------------------------------------------------------------------------------
from time to time. The legal opinion ofSmith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. , counsel to the Company, relating to the shares of common stock being offered is attached hereto as Exhibit 5.1. The foregoing is a summary description of certain terms of the Purchase Agreement and the Registration Rights Agreement and, by its nature, is incomplete. Copies of the Purchase Agreement and Registration Rights Agreement are filed herewith as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. All readers are encouraged to read the entire text of the Purchase Agreement and the Registration Rights Agreement. The Purchase Agreement is being filed herewith solely to provide investors and security holders with information regarding its terms. It is not intended to be a source of financial, business or operational information about the Company or any of its affiliates. The representations, warranties and covenants contained in the Purchase Agreement are made solely for purposes of the Purchase Agreement and are made as of specific dates; are solely for the benefit of the parties; may be subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Purchase Agreement, including being qualified by confidential disclosures made for the purpose of allocating contractual risk between the parties instead of establishing matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors or security holders. Investors and security holders should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company or any of its affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures. Item 1.02. Termination of a Material Definitive Agreement.
The Purchase Agreement will replace a prior Common Stock Purchase Agreement,
dated as of
(d) Exhibits
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