Item 1.01 Entry into a Material Definitive Agreement.
On March 28, 2022, AiAdvertising, Inc. (the "Company") entered into a Purchase
Agreement (the "Purchase Agreement") with GHS Investments, LLC ("GHS"), which
provides that, upon the terms and subject to the conditions and limitations set
forth therein, the Company may sell to GHS, in its discretion, up to $10,000,000
of shares ("Purchase Shares") of its common stock.
The Company has the right, in its sole discretion, subject to the conditions and
limitations in the Purchase Agreement, to direct GHS, by delivery of a purchase
notice from time to time (a "Purchase Notice") to purchase (each, a "Purchase")
over the one-year term of the Purchase Agreement, a minimum of $10,000 and up to
a maximum of the lower of: (1) one hundred percent (100%) of the average daily
trading dollar volume of the Company's common stock during the ten trading days
preceding the Purchase Date; or (2) one million dollars ($1,000,000), provided
that the parties may agree to waive such limitations. The aggregate value of
Purchase Shares sold to GHS may not exceed $10,000,000. Each Purchase Notice
will set forth the Purchase Price and number of Purchase Shares in accordance
with the terms of the Purchase Agreement.
The number of Purchase Shares the Company issue under each Purchase will be
equal to 112.5% of the Purchase Amount sold under such Purchase, divided by the
Purchase Price per share (as defined under the Purchase Agreement). The Purchase
Price is defined as the lower of (a) 90% of the lowest volume weighted average
price during the Valuation Period; or (b) the closing price for the Company's
common stock on the trading day preceding the date of the Purchase Notice. The
Purchase Price will be subject to a floor of $.01 per share, at or below which
the Company will not deliver a Purchase Notice. The Valuation Period is the ten
consecutive business days immediately preceding, but not including, the date a
Purchase Notice is delivered.
The Purchase Agreement prohibits the Company from directing GHS to purchase any
shares of common stock if those shares, when aggregated with all other shares of
the Company's common stock then beneficially owned by GHS and its affiliates,
would result in GHS and its affiliates having beneficial ownership, at any
single point in time, of more than 4.99% of the then total outstanding shares of
the Company's common stock.
There are no trading volume requirements or restrictions under the Purchase
Agreement and the Company will control the timing and amount of any sales of its
common stock to GHS.
So long as an event of default, as defined in the Purchase Agreement, (all of
which are outside the control of GHS) has occurred and is continuing, the
Company may not deliver a Purchase Notice to GHS.
The Purchase Agreement is for a term of twelve months but may terminate earlier
on the date that all of the Purchase Shares are sold to GHS. The Company and GHS
each have the right to terminate the Purchase Agreement at any time upon thirty
days notice. In the event of bankruptcy proceedings by or against the Company,
the Purchase Agreement will automatically terminate without action of any party.
The shares were offered, and will be issued, pursuant to the Prospectus
Supplement, dated March 28, 2022, to the Prospectus included in the Company's
Registration Statement on Form S-3 (Registration No. 333-252358) filed with the
Securities and Exchange Commission on January 22, 2021.
Sichenzia Ross Ference LLP, counsel to the Company, has issued an opinion to the
Company regarding the validity of the shares of common stock to be issued under
the Purchase Agreement. A copy of the opinion is filed as Exhibit 5.1 to this
Current Report on Form 8-K.
The foregoing description of the Purchase Agreement is qualified in its entirety
by reference to the Purchase Agreement, which is attached hereto as Exhibit 10.1
and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Exhibit
5.1 Opinion of Sichenzia Ross Ference LLP
10.1 Purchase Agreement dated March 28, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
© Edgar Online, source Glimpses