UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 23, 2022
SOW GOOD INC.
(Exact name of registrant as specified in its charter)
| Nevada | | 000-53952 | | 27-2345075 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
1440 N Union Bower Rd
Irving, TX 75061
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (214) 623-6055
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(g) of the Act:
| Title of each Class | Trading Symbol | Name of each exchange on which registered |
| Common Stock | SOWG | OTCQB |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1.01 Entry into a Material Definitive Agreement.
On August 23, 2022, Sow Good Inc., a Nevada corporation (the “Company”) closed a private placement (the “Offering”) and concurrently entered into a Note and Warrant Purchase Agreement (the “Purchase Agreement”) with multiple accredited investors (the “Purchasers”) to sell and issue to the Purchasers in reliance on Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, (i) an aggregate of up to $2,500,000 in the August 2022 Promissory Notes (the “Notes”) and (ii) ten-year warrants (the “Warrants”) to purchase up to an aggregate of 625,000 shares (the “Warrant Shares”, and together with the Notes and Warrants, the “Securities”) of the Company’s common stock, par value $0.001 per share, representing 25,000 warrant shares per $100,000 of Notes purchased.
The Notes are 3 year notes. Interest on the Notes accrues at a rate of 8% per annum, payable at the earlier of the Maturity Date (as defined in the Notes to be August 23, 2025, unless accelerated by an Event of Default) or January 1, 2025, and the outstanding principal amount of the Notes matures and becomes due and payable on the Maturity Date. Loans (as defined in the Notes) may be advanced to the Company from time to time from August 23, 2023 to the Maturity Date, upon prior written notice from Company and in aggregate increments of $500,000 (but not to exceed $2,500,000).
The Warrants are exercisable immediately and for a period of 10 years at a price of $2.60 per share. The Company may redeem outstanding warrants prior to their expiration, at a price of $0.01 per share, provided that the volume weighted average sale price per share of Common Stock equals or exceeds $9.00 per share for thirty (30) consecutive trading days ending on the third business day prior to the mailing of notice of such redemption. Assuming full exercise thereof, further proceeds to the Company from the exercise of the Warrant Shares is calculated as $1,625,000. The Offering closed simultaneously with execution of the Purchase Agreement.
The foregoing description of the Offering does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, the Notes and the Warrants, a copy of each of which is attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 4.1, respectively, and which are incorporated herein by reference.
As disclosed on the Company's 8-K filed April 14, 2022 the Company closed a private placement and concurrently entered into a Note and Warrant Purchase Agreement with multiple accredited investors to sell and issue to the investors, (i) an aggregate of $3,700,000 in April 2022 Promissory Notes (the "April Notes"), and (ii) ten-year warrants to purchase an aggregate of 925,000 shares of the Company's common stock, par value $0.001 per share, representing 25,000 warrant shares per $100,000 of April Notes purchased.
On August 23, 2022, the Board approved and the Company entered in a first amendment to each of the April Notes, to update the terms of interest payment (the "Amendment"). Specifically, the Amendment provides that effective January 1, 2023, interest on the April Notes accrues at a rate of 6% per annum, payable at the earlier of the Maturity Date (as defined in the April Notes) or January 1, 2025 rather than being semi-annual cash pay interest. All other terms of the April Notes remain unchanged. The foregoing summary of the Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.3, and which are is incorporated by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 above with respect to the Offering of the Securities is incorporated by this reference into this Item 3.02. The Securities were offered and sold in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act and Rule 506 promulgated thereunder. The Purchase Agreement, Notes and Warrants executed in connection therewith contain representations to support the Company’s reasonable belief that, among other things, the Purchasers had access to information concerning its operations and financial condition, that the Purchasers acquired the Securities for their own account and not with a view to the distribution thereof, and that each Purchaser is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act. The Securities described in Item 1.01 above are deemed to be restricted securities for purposes of the Securities Act and the certificates representing the Securities shall bear legends to that effect. Accordingly, the Securities sold in the Offering may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | SOW GOOD INC. |
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| | By: | /s/ Claudia Goldfarb |
| | | Claudia Goldfarb |
| | | Chief Executive Officer |
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| Date: August 25, 2022 | | |
