SUGARMADE, INC. Item 1.01 Entry into a Material Definitive Agreement.
On
Under the terms of the Purchase Agreement, Dutchess will not be obligated to
purchase shares of common stock unless and until certain conditions are met,
including but not limited to a Registration Statement on Form S-1 (the
"Registration Statement") becoming effective which registers Dutchess' resale of
any common stock purchased by Dutchess under the Equity Line. The Purchase
Agreement obligates the Company to file the Registration Statement within 45
business days of
From time to time during the Term, the Company, in its sole discretion, may provide Dutchess with one or more drawdown notices (each, a "Drawdown Notice"), to purchase a specified number of shares of common stock ("Drawdown Notice Shares"), subject to the limitations discussed below. The actual amount of proceeds the Company will receive pursuant to each Drawdown Notice (the "Investment Amount") is to be determined by multiplying the number of Drawdown Notice Shares by 93% of the lowest traded price of the common stock during the five business days prior to the Closing Date. Closing Date shall mean the date that is eight business days after the Clearing Date. Clearing Date shall mean the first business day that the Dutchess holds the Drawdown Notice Shares in its brokerage account and is eligible to trade the shares.
The maximum number of shares of common stock to be purchased pursuant to any
single Drawdown Notice cannot exceed the lesser of (i)
In order to deliver a Drawdown Notice and sell Drawdown Notice Shares to
Dutchess, certain conditions set forth in the Purchase Agreement must be met,
including: (a) the representations and warranties of the Company shall be true
and correct in all material respects as of the date of the Purchase Agreement
and the applicable closing date; (b) since the date of the Company's most recent
filing with the
The Purchase Agreement contains customary representations, warranties, and covenants by, among, and for the benefit of the parties. Unless earlier terminated, the Purchase Agreement will terminate automatically on the earlier to occur of: (i) the end of the 36-month Term; (ii) the date that the Company sells and Dutchess purchases the Total Commitment amount; (iii) the date that the Registration Statement is no longer effective; or (iv) the occurrence of certain specified insolvency or bankruptcy-related events. The Company may terminate the Purchase Agreement at any time by written notice to Dutchess in the event of a material breach of the agreement by Dutchess.
The Purchase Agreement also provides for mutual cross-indemnification of the parties and their affiliates in the event that either party incurs losses, liabilities, obligations, claims, damages, liabilities, costs, and expenses resulting from a breach of representations, warranties, covenants, or agreements under the Purchase Agreement; an untrue or misleading statement or misleading omission in the Registration Statement or any preliminary or final prospectus pursuant thereto; or a violation or alleged violation of federal or state securities laws and regulations.
In connection with the Equity Line, the Company also entered into a Registration
Rights Agreement, dated
The description of certain terms of the Purchase Agreement and the Registration Rights Agreement set forth herein does not purport to be complete and is qualified in its entirety by the provisions of such agreements, attached hereto as Exhibits 10.1 and 10.2, respectively, and incorporated by reference herein.
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 Common Stock Purchase Agreement by and betweenSugarmade, Inc. andDutchess Capital Growth Fund LP datedJanuary 6, 2022 . 10.2 Registration Rights Agreement by and betweenSugarmade, Inc. andDutchess Capital Growth Fund LP datedJanuary 6, 2022 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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