Item 1.01. Entry into a Material Definitive Agreement.
On October 21, 2020, Oblong, Inc., a Delaware corporation (the "Company"),
entered into a Securities Purchase Agreement (the "Purchase Agreement") with the
accredited investors party thereto (the "Purchasers"), providing for the offer
and sale by the Company to the Purchasers in a private placement exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance on the exemption provided by Rule 506 of Regulation D and
Section 4(a)(2) of the Securities Act, of (i) 1,043,000 shares (the "Shares") of
the Company's Common Stock, par value $0.0001 per share ("Common Stock"), at a
price of $2.85 per share in cash, and (ii) warrants to purchase up to 521,500
shares of Common Stock (the "Warrants" and, the shares of Common Stock issuable
upon exercise of the Warrants, the "Warrant Shares") for gross proceeds of
$2,972,550 before deducting placement agent fees and other offering expenses
(the "Private Placement"). The Private Placement closed on October 22, 2020.
The Warrants have a thirty month term, are initially exercisable at $4.08 per
share and are subject to cashless exercise if, at the time of exercise, the
Warrant Shares are not subject to an effective resale registration statement.
The Warrants are also subject to adjustment in the event of (i) stock splits and
dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and
(iv) certain fundamental transactions, including but not limited to the sale of
the Company, business combinations, and reorganizations. The Warrants do not
have any price protection or price reset provisions with respect to future
issuances of securities.
The Purchase Agreement obligates the Company to indemnify each Purchaser and
certain related parties for certain losses, including those resulting from a
breach of any of the representations, warranties, covenants or agreements made
by the Company in the Purchase Agreement. The Purchase Agreement also provides
that until the nine (9) month anniversary of the Closing Date (as defined in the
Purchase Agreement), each Purchaser will be offered the right to participate in
certain subsequent financings by the Company. Pursuant to the Purchase
Agreement, the Company also agreed that it will not effect certain sales of
equity securities until the earlier of (i) thirty (30) days following the
effective date of a registration statement registering the Shares, Warrants and
Warrant Shares, or (ii) the date that is seven (7) months following the Closing
Date, subject to certain exceptions including private placements of securities
at a per share price higher than the Shares sold in the Private Placement and
certain registered transactions.
The Purchase Agreement provides that the Company will file a registration
statement with respect to the resale of Shares and Warrant Shares by the
Purchasers within ten (10) days following the effective date of the next
registration statement relating to an offering of the Company's securities,
subject to certain exceptions including any registration of Company securities
on Form S-4 or Form S-8.
The net proceeds of the Private Placement were used by the Company to make the
Satisfaction Payment discussed under "SVB Agreement" below. The Special Equities
Group, a division of Bradley Woods & Co. Ltd. (the "Placement Agent") acted as
exclusive placement agent for the Company in connection with the Private
Placement. At the closing of the Private Placement, the Company paid the
Placement Agent a cash fee equal to 6.0% of the gross proceeds received by the
Company in the Private Placement, totaling approximately $178,353.
The Private Placement is exempt from the registration requirements of the
Securities Act, pursuant to the exemption for transactions by an issuer not
involving any public offering under Section 4(a)(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder, and pursuant to reliance on
similar exemptions under applicable state laws. As a result, the securities sold
in the Private Placement were not registered under the Securities Act or any
state securities laws and may not be offered or sold in the United States absent
registration with the Securities and Exchange Commission (the "SEC") or an
applicable exemption from the registration requirements. Each of the Purchasers
represented in the Purchase Agreement that it is an accredited investor within
the meaning of Rule 501 of Regulation D, and is acquiring the Shares and
Warrants in the Private Placement for investment only and not with a view
toward, or for resale in connection with, the public sale or distribution
thereof. The securities sold in the Private Placement were offered without any
general solicitation by the Company or its representatives. Neither this Current
Report on Form 8-K, nor the exhibits attached hereto, is an offer to sell or the
solicitation of an offer to buy the securities described herein.
The above description of the Purchase Agreement and the transactions
contemplated thereby is only a summary and does not purport to be complete and
is qualified in its entirety by reference to the full text of the Form of Common
Stock Purchase Warrant and the Form of Purchase Agreement, copies of which are
filed as Exhibits 4.1 and 10.1, respectively, to this Current Report on Form 8-K
and are incorporated herein by reference.
On October 22, 2020, the Company entered into an agreement (the "Satisfaction
Agreement") with certain of its subsidiaries, Oblong Industries, Inc. and GP
Communications, LLC (the "Guarantors"), and Silicon Valley Bank, as lender
(SVB"), pursuant to which SVB agreed to accept a one-time cash payment of
. . .
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth above under "SVB Agreement" in Item 1.01 of this
current report on Form 8-K, including Exhibit 10.2 hereto, is incorporated
herein by reference in its entirety.
Item 3.02. Unregistered Sale of Equity Securities.
The information set forth above in Item 1.01 of this current report on Form 8-K,
including Exhibits 4.1 and 10.1 hereto, is incorporated herein by reference in
its entirety. Neither the Shares nor the Warrants have been registered under the
Securities Act or the securities laws of any state, and were offered and issued
in reliance on the exemption from registration under the Securities Act afforded
by Section 4(a)(2) and Rule 506 of Regulation D promulgated thereunder.
Item 7.01. Regulation FD Disclosure.
On October 22, 2020, the Company issued a press release announcing, among other
things, the execution of the Purchase Agreement. A copy of the press release is
furnished as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information
furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit
99.1, is deemed to be "furnished" and shall not be deemed "filed" for the
purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to the liabilities of that section, nor
shall such information and Exhibit be deemed incorporated by reference into any
filing under the Securities Act or the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description
4.1 Form of Common Stock Purchase Warrant.
10.1 Form of Securities Purchase Agreement
10.2 Agreement, dated October 20, 2020, by and among Oblong, Inc., Oblong
Industries, Inc., GP Communications, LLC, and Silicon Valley Bank.
99.1 Press release of Oblong, Inc. dated October 22, 2020.
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