Item 1.01 Entry into a Material Definitive Agreement.
On December 28, 2020, SunHydrogen, Inc. (the "Company") entered into a letter
agreement ("Letter Agreement") with an existing accredited investor to exercise
certain outstanding warrants (the "Exercise") to purchase up to an aggregate of
120,000,000 shares of the Company's common stock at an exercise price per share
of $0.075 (the "Existing Warrants"). The Existing Warrants were issued on
December 3, 2020, had an exercise price of $0.075 per share and an exercise
period of 30 months from the date of issuance.
The issuance of the 120,000,000 shares of common stock upon exercise of the
Existing Warrants is registered pursuant to effective registration statements on
Form S-3 (File Nos. 333-239632 and 333-251064). The gross proceeds to the
Company from the Exercise are expected to be approximately $9.0 million, prior
to deducting placement agent fees and offering expenses.
In consideration for the immediate exercise of the Existing Warrants for cash,
the exercising investor will receive new unregistered warrants to purchase up to
an aggregate of 132,000,000 shares of common stock (the "New Warrants"). The New
Warrants will have an exercise price of $0.075 per share, with an exercise
period of three years from the date of issuance.
H.C. Wainwright & Co., LLC ("Wainwright") is acting as the exclusive placement
agent for the Exercise and the issuance of the New Warrants. Pursuant to a
letter agreement dated November 30, 2020, as amended on December 28, 2020,
between the Company and Wainwright (the "Engagement Agreement"), at the closing
of the Exercise, the Company will issue to Wainwright (or its designees)
warrants to purchase up to an aggregate of 8,400,000 shares of common stock of
the Company (the "Placement Agent Warrants"), which equals 7.0% of the aggregate
number of shares of common stock issuable to the investor upon the Exercise. The
Placement Agent Warrants will have an exercise price of $0.0938 per share and
will otherwise have identical terms to the New Warrants. In addition, the
Company has agreed to pay Wainwright an aggregate cash fee equal to 7.0% of the
gross proceeds received by the Company from the Exercise and the sale of the New
Warrants, a management fee of 1.0% of the gross proceeds received by the Company
from the Exercise and the sale of the New Warrants, $35,000 for non-accountable
expenses and a $12,900 clearing fee.
The closing of the Exercise and the issuance of the New Warrants is expected to
take place on or about December 31, 2020.
The foregoing summaries of the Letter Agreement, the New Warrants and Engagement
Agreement, are qualified by reference to the full text of such documents which
are filed as exhibits to this report.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 is incorporated by reference into this
Item 3.02. In connection with the sale of the New Warrants and the Placement
Agent Warrants and the shares of common stock issuable thereunder, the Company
relied upon the exemption from registration provided by Section 4(a)(2) of the
Securities Act of 1933, as amended, for transactions not involving a public
Item 9.01 Financial Statements and Exhibits.
Exhibit No Exhibit
10.1 Form of Letter Agreement
10.2 Form of New Warrant
10.3 Engagement Agreement between the Company and H.C. Wainwright & Co.,
LLC (incorporated by reference to 8-K filed December 3, 2020)
10.4 Amendment dated December 28, 2020, to Engagement Agreement between
the Company and H.C. Wainwright & Co., LLC
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