The Bridge Notes will be secured by first-priority security interests in all tangible and intangible assets, now owned and hereafter created or acquired, of the Company and its subsidiaries.
The Bridge Notes also include an additional uncommitted delayed draw term loan pursuant to which the Company may request, subject to the satisfaction or waiver of customary conditions precedent, including the satisfaction of certain performance milestones, and JMCM may make, in its sole discretion, one or more additional loans after the Closing Date and prior to the Maturity Date in an aggregate principal amount not to exceed $2.5 million (the “Additional Bridge Notes”). If Additional Bridge Notes are issued, JMCM will also purchase additional warrants (the “Additional Bridge Warrants”) to purchase shares of Class A Common Stock at a purchase price of $0.125 per Additional Bridge Warrant and in an amount equal to (i) 35% percent of the additional loan amount divided by (ii) the exercise price calculated in accordance with the definition thereof in the form of Bridge Warrant attached hereto as Exhibit 4.2, which is incorporated herein by reference. Any Additional Bridge Notes or Additional Bridge Warrants issued shall have the same terms and conditions as the Bridge Notes and Bridge Warrants.
If an Event of Default under the Bridge Notes occurs, the principal amount, together with accrued interest thereon, will become immediately due and payable.
Bridge Warrant Issuance
The Bridge Warrants will be immediately exercisable upon issuance at an exercise price of $0.808 per Warrant Share, subject to certain adjustments. The exercise price of the Bridge Warrants, and the number of Warrant Shares potentially issuable upon exercise of the Bridge Warrants, will be adjusted proportionately if the Company subdivides its shares of common stock into a greater number of shares or combines its shares of common stock into a smaller number of shares.
The Bridge Notes and Bridge Warrant have not been and will not be, and any Additional Bridge Notes or Additional Bridge Warrants issued, or any securities issued in connection with the Proposed Financing will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”) or the securities laws of any other jurisdiction. The Bridge Notes, the Bridge Warrants, and any Additional Bridge Notes or Additional Bridge Warrants issued, or any securities issued in connection with the Proposed Financing may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The Bridge Notes and Bridge Warrants were, and will be, offered and sold to the Investors in a transaction exempt from registration under the Securities Act in reliance on Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder. The Investors are “accredited investors,” as defined in Regulation D, and are acquiring the Bridge Notes for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof.
This Current Report on Form 8-K does not, and the exhibits attached hereto do not, constitute an offer to sell any security, including the Bridge Notes, the Bridge Warrants, any Additional Bridge Notes or Additional Bridge Warrants that may be issued, or any securities that may be issued in the Proposed Financing, nor a solicitation for an offer to purchase any security, including the Bridge Notes, the Bridge Warrants, any Additional Bridge Notes or Additional Bridge Warrants that may be issued, or any securities that may be issued in the Proposed Financing, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration, qualification, or exemption under the securities laws of any such jurisdiction.
The foregoing summaries of the Initial Financing Agreement, the Bridge Notes and the Bridge Warrants do not purport to be complete and are qualified in their entirety by reference to the copies of the Initial Financing Agreement, the form of Bridge Note and the form of Bridge Warrant that are filed herewith as Exhibits 10.1, 4.1 and 4.2, respectively, and each of which is incorporated herein by reference.
The statements made herein concerning the Proposed Financing include “forward-looking statements.” Specific forward- forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and can be identified by the use of, without limitation, words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “targets,” “forecasts,” “seeks,” “would,” “could” or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that
