Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, SusGlobal Energy Corp. (the "Company") issued a
promissory note on October 28, 2021 to an investor (the "October 2021 Note").
The October 2021 Note was in the principal amount of $294,118 and had a maturity
date of the earlier of July 28, 2022 or the listing of the Company's common
stock on a national securities exchange in connection with a public offering (a
"Liquidity Event"). As of December 20, 2022, the October 2021 Note had a balance
due of approximately $322,160.
On December 22, 2022, the Company and the investor agreed to
extend the maturity date to the earlier of July 28, 2023 or the occurrence of a
Liquidity Event. In addition, the Company agreed that the investor could
convert the October 2021 Note into shares of the Company's common stock at any
time at the investor's option. Previously, the October 2021 Note was only
convertible upon the occurrence of the Liquidity Event. The Company also agreed
to change the conversion price to be the lowest trading bid price of the
Company's common stock on the trading day immediately prior to the conversion
date multiplied with a 35% discount to that lowest price. Previously, the
conversion price was a 30% discount to the price at which the securities were
sold in connection with the Liquidity Event. In consideration for the extension
of the maturity date, the Company agreed to issue the investor 500,000 shares of
the Company's common stock.
As previously disclosed, the Company issued a promissory note on June 23, 2022
to an investor (the "June 2022 Note"). The June 2022 Note was in the principal
amount of $1,200,000 and had a maturity date of the earlier of December 23, 2022
or the listing of the Company's common stock on a national securities exchange.
On December 29, 2022, the Company and the investor agreed to extend the maturity
date to the earlier of June 23, 2023 or the listing of the Company's common
stock on a national securities exchange. In consideration for the extension of
the maturity date, the Company agreed to: (i) increase the principal amount to
$1,320,000.00 (the "Increased Principal Amount"); (ii) that interest is payable
on the Increased Principal Amount and that such interest (but not any default
interest that becomes due) is paid in full and in advance by the Company issuing
to the investor 450,000 shares of the Company's common stock and (iii) issue to
the investor 666,667 shares of the Company's common stock (the "Modification Fee
Shares"). The parties agreed that the Modification Fee Shares served as an
increase in the amount of commitment fee shares issued to the investor pursuant
to the securities purchase agreement signed by the Company and the investor in
June 2022 in connection with the issuance of the June 2022 Note.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement by a Registrant.
The disclosure under Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 2.03 by reference.
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