expected that the Notes will mature on October 1, 2027, unless redeemed, repurchased or converted in accordance with their terms prior to such date. The Notes are convertible at an initial conversion rate equal to 747.6636, subject to certain adjustments as provided in the Indenture. All conversions will be subject to an increased conversion rate in accordance with the Indenture, based on the Conversion Date (as defined in the Indenture).
Strategic Agreement & Warrant Agreements
As previously disclosed, and as described above, on October 25, 2022, the Company and RXR FP entered into the Strategic Agreement. In consideration of RXR FP’s performance of its obligations under the Strategic Agreement, the Company agreed to issue to RXR FP warrants (the “Warrants”) to purchase, in the aggregate, 9,511,128 shares of the Company’s Class A common stock, par value $0.0001 per share (“Common Stock”). On October 25, 2022, the Company issued the Warrants to RXR FP pursuant to certain Common Stock Purchase Warrant Agreements (the “Warrant Agreements”). The shares underlying the Warrants vest in equal tranches over the three-year period following the initial issuance date of the Warrants, with one-third of such shares vesting each year on the anniversary thereof, provided that all such shares shall vest immediately upon the occurrence of certain specified events (each, an “Early Exercise Event”). The Warrants are exercisable, to the extent vested and unexercised, (1) in the case of certain of the Warrants, upon the earlier of the applicable vesting date or an Early Exercise Event, and prior to 11:59 p.m., New York City time, on October 25, 2032 (the “Warrant Termination Time”), at an exercise price of $0.01 per share of Common Stock, subject to certain adjustments (the “Exercise Price”), (2) in the case of certain of the Warrants, upon the earlier of the applicable vesting date or any later date, provided that the closing price of the Common Stock has exceeded $1.32 (as may be adjusted) for 20 of 30 consecutive trading days prior to such applicable vesting date or such later date, or an Early Exercise Event, and prior to the Warrant Termination Time, at the Exercise Price, and (3) in the case of certain of the Warrants, upon the earlier of the applicable vesting date or any later date, provided that the closing price of the Common Stock has exceeded $1.58 (as may be adjusted) for 20 of 30 consecutive trading days prior to such applicable vesting date or such later date, or an Early Exercise Event, and prior to the Warrant Termination Time, at the Exercise Price. The Warrants may also be exercised, in whole or in part, by means of a “cashless exercise” for a number of shares as determined in the Warrant Agreements. The Strategic Agreement also provides RXR FP with a right of first offer, should the Company undertake a debt financing or equity capital raise, subject to certain exceptions, to participate in such financing or capital raise.
Blocker Agreements
In connection with the execution of the aforementioned agreements, on October 26, 2022, the Company entered into a letter agreement with each of (i) RXR FP Investor LP and RXR FP Investor II LP, and (ii) RXR FP (each of the parties in (i) and (ii), a “Blocker Party,” and such letter agreements, collectively, the “Blocker Agreements”). The Blocker Agreements provide, among other things, that the Notes shall not be converted and the Warrants shall not be exercised, as applicable, to the extent that such conversion or exercise would cause a Blocker Party to beneficially own more than a specified threshold percentage (as may be increased or decreased by the applicable Blocker Party upon 61 days’ written notice) of the Common Stock outstanding immediately following such conversion or exercise.
WorxWell Acquisition
On December 1, 2021, the Company acquired certain assets associated with the WorxWell™ data analytics platform from RXR. In connection with such acquisition, the Company issued 2,000,000 shares of Common Stock and a warrant to purchase 1,000,000 shares of Common Stock to the seller.
Other than as described herein, there are no related person transactions in which Mr. Rechler has an interest requiring disclosure under Item 404(a) of Regulation S-K.
The foregoing descriptions of the Strategic Agreement, the Investment Agreement, the Indenture, the Warrant Agreements and the Blocker Agreements do not purport to be complete and are qualified in their entirety by the terms and conditions of the Strategic Agreement, the Investment Agreement, the Indenture, the Warrant Agreements and the Blocker Agreements, copies of which were filed as exhibits to the Company’s Current Report on Form 8-K filed on October 27, 2022.
