| Item 1.01 | Entry into a Material Definitive Agreement. |
On February 5, 2021, Destination XL Group, Inc. (the “Company”) entered into a definitive stock purchase agreement (the “Purchase Agreement”) with funds affiliated with a single institutional investor fund manager, pursuant to which the Company has agreed to issue and sell, in a registered direct offering, an aggregate of 1,111,111 shares of its common stock (the “Shares”), for an aggregate purchase price of $5.0 million. The Company intends to use the net proceeds from the offering for working capital and other general corporate purposes.
The offering is expected to close on or about February 9, 2021, subject to satisfaction of customary closing conditions set forth in the Purchase Agreement. The Purchase Agreement contains representations, warranties, indemnification and other provisions customary for transactions of this nature.
The Offering is being conducted pursuant to a placement agency agreement between the Company and D.A. Davidson & Co., acting as sole placement agent. The Company has agreed to pay D.A. Davidson a fee equal to 7% of the aggregate purchase price paid by the purchasers and certain expenses incurred by it of up to $50,000 and a cash retainer of $100,000. The Placement Agency Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties and termination provisions.
In connection with the offering, (i) the Company has agreed to certain restrictions on the issuance and sale of its shares of common stock (or common stock equivalents) and (ii) each of the Company’s directors and certain of its executive officers will also be required to agree, subject to certain limited exceptions, not to sell or otherwise dispose of any shares of the Company’s common stock (or common stock equivalents), in each case for a period of 30-days following the closing of the offering.
The offering is being made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-238929), which was declared effective by the Securities and Exchange Commission (the “SEC”) on June 16, 2020, the base prospectus dated June 4, 2020 and a prospectus supplement to be filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The Company is currently in discussions with a lender regarding a refinancing of its existing FILO (first in-last out) loan with Bank of America, N.A. Any such refinancing will be subject to due diligence review and customary closing conditions, and there is no guarantee or assurance that the Company will be able to negotiate or enter into a refinancing of its FILO loan.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information contained in this Current Report on Form 8-K contains statements by the Company that are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Some forward-looking statements in this press release include the Company’s potential refinancing of its FILO loan, the expected closing date of the offering and the intended use of proceeds from the offering. These forward-looking statements are based on management’s current expectations and assumptions regarding the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company’s actual results may differ materially
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