| Item 1.01. | Entry into a Material Definitive Agreement |
As previously disclosed, on May 12, 2023, LENSAR, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with NR-GRI Partners, LP, a Delaware limited partnership and an affiliate of North Run Capital, LP (the “Buyer”), whereby it agreed to sell to the Buyer, for an aggregate gross purchase price of $20.0 million, (i) an aggregate of 20,000 shares of a newly established series of Preferred Stock designated as “Series A Convertible Preferred Stock, par value $0.01 per share” (the “Preferred Shares”), which have a stated value of $1,000 per share and are initially convertible into 7,940,446 shares (the “Conversion Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), subject to certain beneficial ownership limitations described below and (ii) warrants (the “Warrants”) to purchase an aggregate of 4,367,246 shares of Common Stock (the “Warrant Shares”). The transaction (the “Offering”) closed on May 18, 2023.
Warrants
In connection with the closing of the Offering, the Company issued to the Buyer 2,183,623 Warrants that are designated as Class A Common Stock Purchase Warrants and have an exercise price equal to $2.45 per share, and 2,183,623 Warrants that are designated as Class B Common Stock Purchase Warrants and have an exercise price equal to $3.0625 per share, subject in each instance to adjustments as provided under the terms of the Warrants. The Warrants are exercisable at any time up to and including the fifth anniversary of the closing date of the Offering, provided that the exercise of the Warrants will be subject to the Ownership Blocker (as defined below), unless the Company’s stockholders approve the removal of the Ownership Blocker. The Warrants may be exercised on a cashless basis at any time while the resale registration statement required by the registration rights agreement entered into by the Company in connection with the Offering is not effective and available for such holder’s Warrant Shares, and the Warrants will automatically be exercised on a cashless basis upon the expiration of the Warrants if not otherwise exercised prior thereto. In the event of a sale of the Company or other Fundamental Transaction (as defined below) prior to the expiration or exercise of the Warrants, the holders of the Warrants may elect to have the Warrants redeemed by the Company for an amount in cash equal to the Black-Scholes value of the Warrants.
The foregoing description of the Warrants is qualified in its entirety by the terms of the Class A Common Stock Purchase Warrant and Class B Common Stock Purchase Warrant attached hereto as Exhibits 4.1 and 4.2, respectively.
Voting Agreements
The Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (the “Certificate of Designations”) to the Company’s Amended and Restated Certificate of Incorporation, establishing the designations, preferences, powers and rights of the Preferred Shares, provides that the Preferred Shares will not be convertible to the extent that the conversion would cause the Buyer, together with its affiliates, to become the beneficial owner of more than 19.99% of the Company’s Common Stock (the “Ownership Blocker”), until such time, if any, that the Company’s stockholders have approved removal of the Ownership Blocker in accordance with Nasdaq Listing Rule 5635. The Company has agreed to call and hold, not later than August 16, 2023, a special meeting of its stockholders to approve the removal of the Ownership Blocker. In connection with the closing of the Offering, each director and executive officer of the Company entered into a voting agreement with the Buyer pursuant to which each such director and executive officer agreed to vote his or her shares of Common Stock in favor of removal of the Ownership Blocker at the special meeting of stockholders (each, a “Voting Agreement”).
The foregoing description of the Voting Agreement is qualified in its entirety by the terms of the Voting Agreement, a form of which is attached hereto as Exhibit 10.1.
| Item 3.02. | Unregistered Sales of Equity Securities |
The information set forth under Item 1.01 above is incorporated herein by reference. On May 12, 2023, the Company entered into the Purchase Agreement, pursuant to which the Company has agreed to sell, upon the terms and conditions set forth therein, the Preferred Shares and Warrants (together with the Conversion Shares and Warrant Shares issuable pursuant thereto) solely to “accredited investors,” as such term is defined in the Securities Act of 1933, as amended (the “Securities Act”) and in reliance on the exemption from registration afforded by Section 4(a)(2) and Regulation D (Rule 506) under the Securities Act and corresponding provisions of state securities laws. Accordingly, none of the securities to be issued in the Offering, including the Conversion Shares and the Warrant Shares, will have been registered under the Securities Act as of the closing date of the Offering, and until registered, these securities may not be offered or sold in the United States absent registration or availability of an applicable exemption from registration. The initial maximum number of shares of Common Stock issuable upon conversion of the Preferred Shares and exercise of the Warrants is 12,307,693 shares, subject to customary anti-dilution adjustments for stock splits, reverse stock split, and the like.
| Item 3.03. | Material Modification to Rights of Security Holders |
On May 18, 2023, in connection with the closing of the Offering, the Company filed the Certificate of Designations to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which established the designations, preferences, powers and rights of the Preferred Shares. The Certificate of Designations became effective with the Secretary of State of the State of Delaware upon filing.
Pursuant to the Certificate of Designations, holders of Preferred Shares will be entitled to vote on an as-converted basis with the Company’s Common Stock, after taking into account the Ownership Blocker. The Preferred Shares rank senior to the Common Stock, as to distributions and payments upon the liquidation,
