Item 1.01 Entry into a Material Definitive Agreement.
On September 21, 2020, SunHydrogen, Inc. (the "Company") entered into a purchase
agreement (the "Purchase Agreement") with GHS Investments, LLC ("GHS"). Under
the Purchase Agreement, the Company may sell, in its discretion (subject to the
terms and conditions of the Purchase Agreement) up to an aggregate of $4,000,000
of common stock to GHS.
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 6-month term of the Purchase Agreement, a minimum of $10,000 and up to
a maximum of $400,000 (the "Purchase Amount") of shares of common stock (the
"Purchase Shares") for each Purchase Notice (provided that, the Purchase Amount
for any Purchase will not exceed two times the average of the daily trading
dollar volume of the common stock during the 10 business days preceding the
purchase date). The number of Purchase Shares the Company will 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 90% of the lowest end-of-day
volume weighted average price of the common stock for the five consecutive
business days immediately preceding the purchase date, including the purchase
date. The Company may not deliver more than one Purchase Notice to GHS every ten
business days, except as the parties may otherwise agree.
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.
Other than as described above, there are no trading volume requirements or
restrictions under the Purchase Agreement. The Company will control the timing
and amount of any sales of its common stock to GHS. The Company may at any time
in its sole discretion terminate the Purchase Agreement.
If an event of default (as defined under the Purchase Agreement) (all of which
are outside the control of GHS) occurs and is continuing, the Company may not
deliver to GHS any Purchase Notice.
The Company will pay a finder's fee to J.H. Darbie & Co., Inc. of 4% of the net
proceeds the Company receives from sales of its common stock to GHS under the
Purchase Agreement.
The shares were offered, and will be issued, pursuant to the Prospectus
Supplement, dated September 21, 2020, to the Prospectus included in the
Company's Registration Statement on Form S-3 (Registration No. 333-239632) filed
with the Securities and Exchange Commission on July 2, 2020.
Sichenzia Ross Ference LLP, counsel to the Company, has issued an opinion to the
Company regarding the validity of the securities to be issued in the offering. 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 Exhibit 10.1 attached hereto 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 (incorporated by reference to 10-K filed September
23, 2020)
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