Item 1.01 Entry into a Material Definitive Agreement.
On April 5, 2022, Clearday, Inc. (the "Company"), entered into a Securities
Purchase Agreement (the "Note Purchase Agreement") to issue an unsecured
promissory note (the "Note") to an institutional lender. We used the proceeds of
this financing to fund our operations.
The Note provides for the net funding to Clearday of $150,000 after payment of
specified expenses of $3,750 and provides for an original issue discount of
$18,450, resulting in a principal obligation of $172,200 and a one-time interest
charge of 12% on such principal amount.
The Note provides for a one year maturity. Monthly payments on the Note of
$19,286.40 will be made by Clearday with the first payment being on May 20,
2022, which payments are subject to a 10 day grace period. The Note is
unsecured. The Note provides specified events of default (an "Event of Default")
including failure to timely pay the monetary obligations under the Note and such
breach continues for a period of ten (10) days after written notice from the
Noteholder' a breach of covenants under the Note or the Purchase Agreement that
continues for a period of twenty (20) days after written notice by the
Noteholder; breach of any representation and warranty in the Note or Purchase
Agreement; commencement of bankruptcy or similar proceedings; failure to
maintain the listing of Clearday's common stock on at least one of the
Over-the-Counter markets such as the OTCQB; the failure of Clearday to comply
with the reporting requirements of the Securities Exchange Act; Clearday's
liquidation, or a financial statement restatement by Clearday.
Upon any Event of Default, the obligations under the Note will accrue interest
at an annual rate of 22% and, if such Event of Default is continuing at any time
that is 180 days after the date of the Note, provide the Noteholder the right
and option to convert the obligations under the Note to shares of Clearday's
common stock. The price for any such conversion is equal to 75% (or a 25%
discount) of the average of the five (5) lowest per share daily volume-weighted
average price of Clearday's common stock over the ten (10) consecutive trading
days that are not subject to specified market disruptions immediately preceding
the date of the conversion. The conversion right of the Noteholder is subject to
a customary limitation on beneficial ownership of 4.99% of Clearday's common
stock.
Each of the Note and the Purchase Agreement has customary other covenants and
provisions, including representations and warranties, payment of brokers, and
indemnification, that Clearday will not sell, lease or otherwise dispose of any
significant portion of its assets outside the ordinary course of business
without the consent of the Noteholder and Clearday will maintain a reserve of
authorized and unissued shares of common stock sufficient for full conversion of
the obligations under the Note.
The foregoing descriptions of the Note Purchase Agreement and the Note are not
complete and are qualified in their entirety by reference to the full text of
each such agreement, which is filed as Exhibit 10.1 and Exhibit 10.2 to this
Current Report on Form 8-K and is incorporated herein by reference.
On April 5, 2022, Leander Associates, Ltd., a Texas limited partnership
("Seller") that is a subsidiary of Clearday, Inc. (the "Company"), entered into
a Purchase and Sale Agreement (the "Leander Sale Agreement") to sell one of
Clearday's non-core assets: a land parcel located in Leander, Texas (the
"Property"). The purchase price is approximately $392,040 per acre, subject to
customary apportionments, and includes the price applicable to third party
reporting and engineering documentation and other studies and analysis delivered
by Seller to the purchaser. The purchaser has made an initial deposit of $20,000
and paid an initial non-fundable fee of $5,000, which fee will be applied to the
payment of the purchase price upon a closing. The Leander Sale Agreement
provides a 90-day period following the April 4, 2022 effective date, or until
July 5, 2022 (the "Feasibility Period"), for the purchaser to inspect the
Property and conduct their analysis, appraisals and other examination of the
Property, including environmental inspections. Onsite testing by the purchaser
is subject to customary conditions including notice, indemnification and
maintenance of commercial liability insurance naming Seller as an additional
insured party. The purchaser may conduct a Phase II environmental inspection
subject to Seller's prior written consent. The purchaser may terminate the
Leander Sale Agreement on or prior to the expiration of the Feasibility Period.
Upon such termination, the deposits by purchaser under the Leander Sale
Agreement will be returned. If the purchaser does not so terminate the Leander
Sale Agreement, then it is required to provide an additional $20,000 deposit.
Within 14 days after the effective date, or April 19, 2022, Seller will provide
the purchaser with a title insurance commitment and related title documents. The
Leander Sale Agreement provides for a customary process for the purchaser to
raise, and for the parties to resolve, any purchaser objections to any title
issues, which shall not include customary permitted title exceptions. Prior to
the end of the Feasibility Period, purchaser shall use its commercially
reasonable efforts to obtain a survey of the Property (the "Survey") to the
Seller, and Seller will reimburse 50% of the cost of the Survey, up to $3,000.
Seller shall have no obligation to remove, satisfy or cure any title objections,
except for liens voluntarily created by Seller that secure monetary obligations
of Seller, judgment liens and delinquent real property taxes and assessments
(the "Monetary Liens"), which Seller agrees to remove on or before Closing.
The Leander Sale Agreement provides the purchaser with the ability to assess the
permitting requirements and obtain land use and related approvals prior to
closing the purchase of the Property. If purchaser provides a $10,000 deposit
(the "Initial Permitting Fee") on or before the expiration of the Feasibility
Period, then the purchaser shall have a period (the "Permitting Period") of one
hundred eighty (180) days following the expiration of the Feasibility Period,
subject to up to three extensions, each for 90 days, to obtain the approvals
from the appropriate governmental authorities regarding: (1) the re-zoning of
the Property to mixed-use or multi-family zoning (the "Rezoning"); (2) the
approval of the purchaser's site plan (the "Site Plan"); and (3) the civil
permit for the horizontal development of the Property in accordance with the
Site Plan (the "Civil Permit", and together with the Rezoning and Site Plan,
collectively, the "Approvals"). If, despite purchaser's diligent efforts to
obtain such Approvals, purchaser is unable to obtain such Approvals prior to
expiration of the Permitting Period, the purchaser shall be entitled to extend
the Permitting Period for three (3) periods of ninety (90) days each (each, an
"Permitting Extension Period") by providing notice prior to expiration of the
Permitting Period, as then extended, and providing a $10,000 extension fee (a
"Permitting Extension Fee"). The Initial Permitting Fee and all Permitting
Extension Fees shall be nonrefundable but will be applied to the purchase price
at the closing. Purchaser may terminate the Leander Sale Agreement if purchaser
is unable to obtain the Approvals at the end of the Permitting Period, as duly
extended. The Leander Sale Agreement also provides that the purchaser is
obligated to pay for all "Rollback Taxes," which is the amount of property taxes
to be due upon the change in land usage or ownership of all or part of the
Property
The closing of the purchase and sale of the Property is on the date that is not
later than 60 days after the expiration of the Permitting Period or the
Permitting Extension Period, subject to any adjournment.
The Leander Sale Agreement includes customary terms and conditions including
representations and warranties, payment of brokers, conditions to closing, risk
of loss, condemnation, remedies, environmental conditions, and indemnification.
The Leander Sale Agreement also provides the Seller the right to invest a
portion, up to $600,000, of the Property to the purchaser, which may be
exercised by Seller prior to the date that Approvals are received. Should Seller
elect to exercise such participation right, then Seller and purchaser will enter
into a definitive agreement, in a form and substance acceptable to both parties,
whereby Seller shall receive an amount equal to such contributed property
multiplied by 115% (the "Contribution Value"). Such participation or investment
will provide that all distributions of Cash Flow from the development on the
Property will first be paid to Seller pari passu with all other distributions of
return of capital paid to the members of purchaser until such time that Seller
has received an amount equal to the Contribution Value prior to any other
distributions of profits. Following the distribution of the Contribution Value
to Seller, Seller will not be entitled to any further distributions. Cash flow
is defined be mean gross cash receipts from the ownership, operation, financing,
development, sale of all (or a portion of) the Property less all expenses with
respect to the purchaser's development costs, transaction costs incurred, other
than any expenses paid to affiliates or related parties or foreign persons, any
financing or sale of its assets and properties and customary expenses of the
development and any income derived from leasing the Property.
The foregoing description of the Leander Sale Agreement is not complete and is
qualified in its entirety by reference to the full text of such agreement, which
is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated
herein by reference.
Forward Looking Statements
This communication contains forward-looking statements (including within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended) concerning the Company.
These statements may discuss goals, intentions and expectations as to future
plans, trends, events, results of operations or financial condition, or
otherwise, based on current beliefs of the management of the Company, as well as
assumptions made by, and information currently available to, management.
Forward-looking statements generally include statements that are predictive in
nature and depend upon or refer to future events or conditions, and include
words such as "may," "will," "should," "would," "expect," "anticipate," "plan,"
"likely," "believe," "estimate," "project," "intend," and other similar
expressions. Statements that are not historical facts are forward-looking
statements. Forward-looking statements are based on current beliefs and
assumptions that are subject to risks and uncertainties and are not guarantees
of future performance. Actual results could differ materially from those
contained in any forward-looking statement as a result of various factors,
including, without limitation: the risks regarding the Company and its business,
generally; risks related to the Company's ability to correctly estimate and
manage its operating expenses and develop its innovate non-acute care businesses
and the acceptance of its proposed products and services, including with respect
to future financial and operating results; the ability of the Company to protect
its intellectual property rights; competitive responses to the Company's
businesses including its innovative non-acute care business; unexpected costs,
charges or expenses; regulatory requirements or developments; changes in capital
resource requirements; and legislative, regulatory, political and economic
developments. The foregoing review of important factors that could cause actual
events to differ from expectations should not be construed as exhaustive and
should be read in conjunction with statements that are included herein and
elsewhere, including the risk factors included in the Company's most recent
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K filed with the SEC and the registration statement regarding the
Company's previously announced merger, that was filed and declared effective.
The Company can give no assurance that the actual results will not be materially
different than those based on the forward looking statements. Except as required
by applicable law, the Company undertakes no obligation to revise or update any
forward-looking statement, or to make any other forward-looking statements,
whether as a result of new information, future events or otherwise.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
No. Description
10.1 Form of Promissory Note dated April 5, 2022 in the principal amount of
$172,200.
10.2 Form of Securities Purchase Agreement, dated as of April 5, 2022, by and
between Clearday, Inc. and Sixth Street Lending LLC.
10.3 Purchase and Sale Agreement, effective April 5, 2022, by and between
Leander Associates, Ltd., a Texas limited partnership ("Seller"), and the
purchaser specified therein.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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