UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): October 4, 2024
SKYX PLATFORMS CORP.
(Exact name of Registrant as Specified in its Charter)
| Florida | | 001-41276 | | 46-3645414 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
2855 W. McNab Road
Pompano Beach, Florida 33069
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (855) 759-7584
Not Applicable
(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(b) of the Act:
| Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
| Common Stock, no par value per share | | SKYX | | The Nasdaq Stock Market LLC |
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. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
On October 4, 2024, SKYX Platforms Corp. (the “Company”) sold an aggregate of 440,000 shares of two series of newly-authorized preferred stock, resulting in total gross proceeds to the Company of $11.0 million which preferred stock may be converted into shares of the Company’s common stock at $2.00 per share and bears an 8% annual dividend. The Company intends to use the proceeds for working capital and other general corporate purposes.
Series A Preferred Stock
On October 4, 2024, the Company entered into a Securities Purchase Agreement (the “Series A Purchase Agreement”) with an accredited investor, pursuant to which such investor purchased an aggregate of 200,000 shares of the Company’s newly-authorized Series A Preferred Stock, no par value per share (the “Series A Preferred Stock”), at a purchase price of $25.00 per share. The Series A Purchase Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties and provides the purchaser with certain registration rights.
The Certificate of Designation of Rights, Preferences and Privileges of Series A Preferred Stock (the “Series A Certificate of Designation”) provides for cumulative cash dividends at an annual rate of 8% of the original issue price of $25.00 per share of Series A Preferred Stock, payable quarterly in arrears. In the event the full cumulative dividends are not paid on a dividend payment date, dividends will accrue on the sum of the original issue price, plus the amount of unpaid dividends, at an annual rate of 12%, until such date as the Company has paid all previously accrued but unpaid dividends. In addition, holders of Series A Preferred Stock are also entitled to participate in and receive any dividends declared or paid on the Company’s common stock on an as-converted basis.
Each holder of Series A Preferred Stock has the right, at such holder’s option, to convert such holder’s shares of Series A Preferred Stock into shares of common stock at an initial conversion price per share of $2.00, subject to price protection up to a maximum of 40% in the event the Company issues common stock below $2.00 per share. In addition, for two years following the closing date of the Series A Purchase Agreement, the Series A Preferred Stock is subject to mandatory conversion by the Company upon the occurrence of specified events. In no event will the aggregate number of shares of common stock that may be issued upon the conversion of the Series A Preferred Stock exceed 19.99% of the common stock outstanding on the date of the Series A Purchase Agreement prior to closing, unless the Company obtains stockholder approval.
The Company may redeem all or any of the Series A Preferred Stock for cash at any time beginning five years after the closing date of the Series A Purchase Agreement at a redemption price per share equal to $25.00, plus all accrued and unpaid dividends on the Series A Preferred Stock being redeemed (the “Series A Redemption Price”). Upon a “Fundamental Change” (involving a change of control, as further described in the Series A Certificate of Designation), each holder may require the Company to redeem the holder’s Series A Preferred Stock at the Series A Redemption Price.
In the event of any liquidation, dissolution or winding up of the Company, the holders of Series A Preferred Stock shall be entitled to receive an amount equal to $25.00 per share, plus accrued and unpaid dividends.
With respect to the payment of dividends and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the Company, the Series A Preferred Stock ranks senior to the Company’s common stock and any other class or series of capital stock of the Company created after the Series A Preferred Stock, the terms of which do not expressly provide that such class or series ranks on a parity basis with or senior to the Series A Preferred Stock, and on parity with any class or series of capital stock of the Company expressly designated as ranking on parity with the Series A Preferred Stock. The Series A Preferred Stock has no stated maturity, is not subject to any sinking fund and will remain outstanding indefinitely unless converted into common stock or redeemed by the Company, in which case such shares of Series A Preferred Stock may not be reissued and will automatically be retired and cancelled and resume the status of authorized but unissued shares of preferred stock.
Holders of Series A Preferred Stock generally will be entitled to vote with the holders of the Company’s common stock on all matters submitted for a vote of holders of common stock (voting together with the holders of common stock as a single class) on an as-converted basis. The Series A Preferred Stock is entitled to a separate class vote on all matters that impact the rights, value or conversion terms or ranking of the Series A Preferred Stock. Additionally, the Company shall not, without the approval of 51% of the then outstanding shares of Series A Preferred Stock, (i) issue additional shares of Series A Preferred Stock; (ii) create or issue (A) any class or series of capital stock ranking senior to the Series A Preferred Stock with respect to dividends or distributions or (B) any other securities ranking on parity with the Series A Preferred Stock having the same liquidation preference as the Series A Preferred Stock; or (iii) amend, modify or alter in any manner (A) the Series A Certificate of Designation or (B) the Company’s Certificate of Incorporation (including by filing any new certificate of designation or elimination) or its Amended and Restated Bylaws in a manner that adversely affects the rights, preferences, privileges or restrictions of the Series A Preferred Stock. Pursuant to the Series A Purchase Agreement, the investors in the Series A Preferred Stock consented to the sale and issuance of up to 400,000 shares of a series of preferred stock that, among other things, ranks on parity with or junior to the Series A Preferred Stock.
Series A-1 Preferred Stock
Also on October 4, 2024, the Company entered into a Securities Purchase Agreement (the “Series A-1 Purchase Agreement” and, together with the Series A Purchase Agreement, the “Purchase Agreements”) with certain accredited investors, pursuant to which such investors purchased an aggregate of 240,000 shares of the Company’s newly-authorized Series A-1 Preferred Stock, no par value per share (the “Series A-1 Preferred Stock”), at a purchase price of $25.00 per share. Investors in this offering included Steven Schmidt, President of the Company, John P. Campi, Co-Chief Executive Officer of the Company, and Leonard J. Sokolow, Co-Chief Executive Officer and a director of the Company, as well as significant stockholders. The Series A-1 Purchase Agreement contains customary representations, warranties, agreements and indemnification rights and obligations of the parties and provides the purchasers with certain registration rights.
The Certificate of Designation of Rights, Preferences and Privileges of Series A-1 Preferred Stock (the “Series A-1 Certificate of Designation”) provides for cumulative cash dividends at an annual rate of 8% of the original issue price of $25.00 per share of Series A-1 Preferred Stock, payable quarterly in arrears. In the event the full cumulative dividends are not paid on a dividend payment date, dividends will accrue on the sum of the original issue price, plus the amount of unpaid dividends, at an annual rate of 12%, until such date as the Company has paid all previously accrued but unpaid dividends. In addition, holders of Series A-1 Preferred Stock are also entitled to participate in and receive any dividends declared or paid on the Company’s common stock on an as-converted basis.
Each holder of Series A-1 Preferred Stock has the right, at such holder’s option, to convert such holder’s shares of Series A-1 Preferred Stock into shares of common stock at an initial conversion price per share of $2.00, subject to price protection up to a maximum of 40% in the event the Company issues common stock below $2.00 per share. In addition, for two years following the closing date of the Series A-1 Purchase Agreement, the Series A-1 Preferred Stock is subject to mandatory conversion by the Company upon the occurrence of specified events. In no event will the aggregate number of shares of common stock that may be issued upon the conversion of both the Series A Preferred Stock and the Series A-1 Preferred Stock exceed 19.99% of the common stock outstanding on the date of the applicable Purchase Agreement prior to closing, unless the Company obtains stockholder approval.
The Company may redeem all or any of the Series A-1 Preferred Stock for cash at any time beginning three years after the closing date of the Series A-1 Purchase Agreement at a redemption price per share equal to $25.00, plus all accrued and unpaid dividends on the Series A-1 Preferred Stock being redeemed (the “Series A-1 Redemption Price”). Upon a “Fundamental Change” (involving a change of control, as further described in the Series A-1 Certificate of Designation), the Company may redeem the outstanding Series A-1 Preferred Stock at the Series A-1 Redemption Price.
In the event of any liquidation, dissolution or winding up of the Company, the holders of Series A-1 Preferred Stock shall be entitled to receive an amount equal to $25.00 per share, plus accrued and unpaid dividends.
With respect to the payment of dividends and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the Company, the Series A-1 Preferred Stock ranks senior to the Company’s common stock and any other class or series of capital stock of the Company created after the Series A-1 Preferred Stock, the terms of which do not expressly provide that such class or series ranks on a parity basis with or senior to the Series A-1 Preferred Stock, and on parity with any class or series of capital stock of the Company expressly designated as ranking on parity with the Series A-1 Preferred Stock. The Series A-1 Preferred Stock has no stated maturity, is not subject to any sinking fund and will remain outstanding indefinitely unless converted into common stock or redeemed by the Company, in which case such shares of Series A-1 Preferred Stock may not be reissued and will automatically be retired and cancelled and resume the status of authorized but unissued shares of preferred stock.
Holders of Series A-1 Preferred Stock generally will be entitled to vote with the holders of the Company’s common stock on all matters submitted for a vote of holders of common stock (voting together with the holders of common stock as a single class) on an as-converted basis. The Series A-1 Preferred Stock is entitled to a separate class vote on all matters that impact the rights, value or conversion terms or ranking of the Series A-1 Preferred Stock. Additionally, the Company shall not, without the approval of 51% of the then outstanding shares of Series A-1 Preferred Stock, (i) issue additional shares of Series A-1 Preferred Stock; (ii) create or issue (A) any class or series of capital stock ranking senior to the Series A-1 Preferred Stock with respect to dividends or distributions or (B) any other securities ranking on parity with the Series A-1 Preferred Stock having the same liquidation preference as the Series A-1 Preferred Stock; or (iii) amend, modify or alter in any manner (A) the Series A-1 Certificate of Designation or (B) the Company’s Certificate of Incorporation (including by filing any new certificate of designation or elimination) or its Amended and Restated Bylaws in a manner that adversely affects the rights, preferences, privileges or restrictions of the Series A-1 Preferred Stock. Pursuant to the Series A-1 Purchase Agreement, the investors in the Series A-1 Preferred Stock consented to the sale and issuance of up to 400,000 shares of the Series A Preferred Stock.
The foregoing summary of the Purchase Agreements does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of each of the Series A Purchase Agreement and the Series A-1 Purchase Agreement, copies of which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K (this “Current Report”) and are incorporated herein by reference. In addition, the foregoing summaries of the Series A Preferred Stock and the Series A-1 Preferred Stock do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of the Series A Certificate of Designation and Series A-1 Certificate of Designation, copies of which are incorporated herein by reference to this Current Report.
The representations, warranties and covenants contained in the Purchase Agreements were made solely for the benefit of the parties to the Purchase Agreements and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Purchase Agreements are incorporated herein by reference only to provide investors with information regarding the terms of the Purchase Agreements, and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the Securities and Exchange Commission (the “SEC”).
| Item 3.02 | Unregistered Sales of Equity Securities. |
The disclosure set forth under Item 1.01 of this Current Report is incorporated by reference in this Item 3.02. The issuances of the Series A Preferred Stock and Series A-1 Preferred Stock were deemed to be exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, including Regulation D and Rule 506 promulgated thereunder, as transactions by the Company not involving a public offering.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit Number | | Description |
| 3.1 | | Certificate of Designation of Rights, Preferences and Privileges of Series A Preferred Stock (effective September 30, 2024) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2024). |
| 3.2 | | Certificate of Designation of Rights, Preferences and Privileges of Series A-1 Preferred Stock (effective September 30, 2024) (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2024). |
| 10.1* | | Form of Securities Purchase Agreement for Series A Preferred Stock, dated October 4, 2024. |
| 10.2* | | Form of Securities Purchase Agreement for Series A-1 Preferred Stock, dated October 4, 2024. |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
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.
| | SKYX PLATFORMS CORP. |
| | | |
| Date: October 7, 2024 | By: | /s/ Leonard J. Sokolow |
| | Name: | Leonard J. Sokolow |
| | Title: | Co-Chief Executive Officer |
