root9B Holdings, Inc. (NASDAQ:RTNB) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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Entry into a Material Definitive Agreement.
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As previously disclosed, root9B Holdings, Inc., a Delaware
corporation (the Company) was offering secured, convertible
promissory notes (the Notes) with an aggregate principal amount
of up to $10,000,000, along with warrants to purchase shares of
the Companys common stock, par value $0.001 per share (the Common
Stock), representing fifty percent (50%) warrant coverage (the
Warrants), to the Investors (as defined in the Agreement) in a
private placement, to the Securities Purchase Agreement dated
September 9, 2016 (as amended, the Agreement). The following
description of Notes and Warrants is presented with adjustment
for the Companys reverse split of its Common Stock at a ratio of
one-for-fifteen (the Reverse Split), which was effective on
December 5, 2016. This Current Report on Form 8-K shall not
constitute an offer to sell or the solicitation of an offer to
buy securities.
corporation (the Company) was offering secured, convertible
promissory notes (the Notes) with an aggregate principal amount
of up to $10,000,000, along with warrants to purchase shares of
the Companys common stock, par value $0.001 per share (the Common
Stock), representing fifty percent (50%) warrant coverage (the
Warrants), to the Investors (as defined in the Agreement) in a
private placement, to the Securities Purchase Agreement dated
September 9, 2016 (as amended, the Agreement). The following
description of Notes and Warrants is presented with adjustment
for the Companys reverse split of its Common Stock at a ratio of
one-for-fifteen (the Reverse Split), which was effective on
December 5, 2016. This Current Report on Form 8-K shall not
constitute an offer to sell or the solicitation of an offer to
buy securities.
Securities Purchase Agreement Amendment
On March 24, 2017, the Company entered into an amendment (the
Third Amendment) to the Agreement with the Majority Note Holders
(as defined in the Agreement). The Third Amendment authorizes the
Company to issue new forms of Notes (the Third Form of Note) and
Warrants (the Second Form of Warrant), each as described below.
The Company provided additional representations to each of the
Investors and agreed to file a registration statement with the
SEC for the resale of the Warrants and the underlying shares of
Common Stock no later than June 30, 2017.
Third Amendment) to the Agreement with the Majority Note Holders
(as defined in the Agreement). The Third Amendment authorizes the
Company to issue new forms of Notes (the Third Form of Note) and
Warrants (the Second Form of Warrant), each as described below.
The Company provided additional representations to each of the
Investors and agreed to file a registration statement with the
SEC for the resale of the Warrants and the underlying shares of
Common Stock no later than June 30, 2017.
The Third Amendment also provides for the issuance of Notes (as
amended) with an aggregate principal amount equal to $2,250,000,
along with Warrants (as amended) to purchase approximately
112,500 shares of Common Stock. The Company intends to use the
proceeds for working capital and general corporate purposes. The
Third Amendment also provides that the Company will file a
registration statement covering the resale of the Warrants and
the shares issued upon conversion of the Notes and Warrants by no
later than June 30, 2017. Additionally, the Third Amendment
provides that the Company make certain additional customary
representations and warranties as of each closing. Following the
Third Amendment, the Company has sold Notes with an aggregate
principal amount of approximately $8.8 million, along with
Warrants to purchase approximately 438,550 shares of Common
Stock. Except as discussed herein, the terms of the Agreement,
the security agreement, the Warrants, and the Notes are described
in the Companys Current Report on Form 8-K filed with the
Securities and Exchange Commission on January 26, 2017.
amended) with an aggregate principal amount equal to $2,250,000,
along with Warrants (as amended) to purchase approximately
112,500 shares of Common Stock. The Company intends to use the
proceeds for working capital and general corporate purposes. The
Third Amendment also provides that the Company will file a
registration statement covering the resale of the Warrants and
the shares issued upon conversion of the Notes and Warrants by no
later than June 30, 2017. Additionally, the Third Amendment
provides that the Company make certain additional customary
representations and warranties as of each closing. Following the
Third Amendment, the Company has sold Notes with an aggregate
principal amount of approximately $8.8 million, along with
Warrants to purchase approximately 438,550 shares of Common
Stock. Except as discussed herein, the terms of the Agreement,
the security agreement, the Warrants, and the Notes are described
in the Companys Current Report on Form 8-K filed with the
Securities and Exchange Commission on January 26, 2017.
The Third Amendment will be filed in accordance with the rules
and regulations of the SEC, with portions omitted and filed
separately with the SEC to a request for confidential treatment.
and regulations of the SEC, with portions omitted and filed
separately with the SEC to a request for confidential treatment.
Except as described in this Current Report, the terms of the
Agreement, the security agreement, the Warrants, and the Notes
are described in the Companys Current Report on Form 8-K filed
with the Securities and Exchange Commission on January 26, 2017,
and are qualified in their entirety by reference to the full text
of the Agreement, form of Note, form of Warrant, the security
agreement, and the Second Amendment to the Agreement, copies of
which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, and 10.5,
respectively, to this Current Report on Form 8-K.
Agreement, the security agreement, the Warrants, and the Notes
are described in the Companys Current Report on Form 8-K filed
with the Securities and Exchange Commission on January 26, 2017,
and are qualified in their entirety by reference to the full text
of the Agreement, form of Note, form of Warrant, the security
agreement, and the Second Amendment to the Agreement, copies of
which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, and 10.5,
respectively, to this Current Report on Form 8-K.
Amendment No. 1 to Warrants
On March 24, 2017, the Company and certain holders of the
Warrants (the Holders) entered into an amendment (the Warrant
Amendment) to each of the Warrants held by the Holders. The
Warrant Amendment amends the definition of Exercise Price from
$12.00 per share to $10.00 per share. Except as modified by the
Warrant Amendment, all other terms of the Warrants remain
unchanged and in full force and effect. The foregoing description
of the principal terms of the Warrant Amendment does not purport
to be complete and is qualified in its entirety by reference to
the Warrant Amendment, a copy of which is filed as an exhibit to
this Current Report on Form 8-K as Exhibit 10.6. The Second Form
of Warrant, which incorporates the Warrant Amendment into the
Warrant, is filed as an exhibit to this Current Report on Form
8-K as Exhibit 10.7.
Warrants (the Holders) entered into an amendment (the Warrant
Amendment) to each of the Warrants held by the Holders. The
Warrant Amendment amends the definition of Exercise Price from
$12.00 per share to $10.00 per share. Except as modified by the
Warrant Amendment, all other terms of the Warrants remain
unchanged and in full force and effect. The foregoing description
of the principal terms of the Warrant Amendment does not purport
to be complete and is qualified in its entirety by reference to
the Warrant Amendment, a copy of which is filed as an exhibit to
this Current Report on Form 8-K as Exhibit 10.6. The Second Form
of Warrant, which incorporates the Warrant Amendment into the
Warrant, is filed as an exhibit to this Current Report on Form
8-K as Exhibit 10.7.
Amendment No. 2 to Notes
On March 24, 2017, the Company and certain holders of the Notes
(the Noteholders) entered into a second amendment (the Note
Amendment) to each of Notes held by the Noteholders. The Note
Amendment requires the Company to comply with new financial
covenants, including that the Company maintain a positive Working
Capital (as defined in the Note Amendment) as of each month end
and average cash on hand at least equal to the largest payroll
during the preceding 90 days (subject to certain adjustments),
and requires the Company to provide regular financial reports to
the Noteholders. The Note Amendment also provides that, in
addition to any other right or remedy upon the occurrence or
existence of any Event of Default (as defined in the Notes), and
until the Event of Default is cured or the Note is converted, the
Majority Note Holders may designate up to two candidates
reasonably acceptable to the Company to serve as directors on the
Companys Board of Directors, which right may be exercised only
once. In addition, the Note Amendment amends the definition of
Conversion Price from $12.00 per share to $10.00 per share and
reduces the per share price floor for any interest payments made
in shares of common stock from $12.00 per share to $10.00 per
share. Additionally, the Note Amendment provides the Noteholders
with a right of first refusal in the event a third party makes an
offer to the Company of a (i) financing involving more than
$2,000,000, or (ii) acquisition of control of the Company in
whatever form. The Note Amendment also requires that the Company
offer to the Noteholders the same terms as any subsequent
issuances of convertible promissory notes that contain,
individually or in the aggregate, more favorable terms than the
Notes. Finally, the Note Amendment clarifies that the maturity
date for all notes will be September 9, 2019, any prepayments
made will be on a pro rata basis and a default under any Note
will be treated as a default under all Notes.
(the Noteholders) entered into a second amendment (the Note
Amendment) to each of Notes held by the Noteholders. The Note
Amendment requires the Company to comply with new financial
covenants, including that the Company maintain a positive Working
Capital (as defined in the Note Amendment) as of each month end
and average cash on hand at least equal to the largest payroll
during the preceding 90 days (subject to certain adjustments),
and requires the Company to provide regular financial reports to
the Noteholders. The Note Amendment also provides that, in
addition to any other right or remedy upon the occurrence or
existence of any Event of Default (as defined in the Notes), and
until the Event of Default is cured or the Note is converted, the
Majority Note Holders may designate up to two candidates
reasonably acceptable to the Company to serve as directors on the
Companys Board of Directors, which right may be exercised only
once. In addition, the Note Amendment amends the definition of
Conversion Price from $12.00 per share to $10.00 per share and
reduces the per share price floor for any interest payments made
in shares of common stock from $12.00 per share to $10.00 per
share. Additionally, the Note Amendment provides the Noteholders
with a right of first refusal in the event a third party makes an
offer to the Company of a (i) financing involving more than
$2,000,000, or (ii) acquisition of control of the Company in
whatever form. The Note Amendment also requires that the Company
offer to the Noteholders the same terms as any subsequent
issuances of convertible promissory notes that contain,
individually or in the aggregate, more favorable terms than the
Notes. Finally, the Note Amendment clarifies that the maturity
date for all notes will be September 9, 2019, any prepayments
made will be on a pro rata basis and a default under any Note
will be treated as a default under all Notes.
Except as modified by the Note Amendment, all other terms of the
Notes remain unchanged and in full force and effect. The
foregoing description of the principal terms of the Note
Amendment does not purport to be complete and is qualified in its
entirety by reference to the Form of Note Amendment, a copy of
which is filed as an exhibit to this Current Report on Form 8-K
as Exhibit 10.8.
Notes remain unchanged and in full force and effect. The
foregoing description of the principal terms of the Note
Amendment does not purport to be complete and is qualified in its
entirety by reference to the Form of Note Amendment, a copy of
which is filed as an exhibit to this Current Report on Form 8-K
as Exhibit 10.8.
The Third Form of Note, which incorporates the Note Amendment
into the Notes, will be filed in accordance with the rules and
regulations of the SEC, with portions omitted and filed
separately with the SEC to a request for confidential treatment.
into the Notes, will be filed in accordance with the rules and
regulations of the SEC, with portions omitted and filed
separately with the SEC to a request for confidential treatment.
Waiver
In connection with the Agreement, the Company entered into a
Waiver of Anti-Dilution Rights (the Waiver) with the Qualified
Holders (as defined in the Amended and Restated Securities
Purchase Agreement, dated March 10, 2016, by and among the
Company and the investors party thereto (the 2016 Agreement)). to
the terms of the Waiver, the Qualified Holders agreed to waive
certain anti-dilutive rights provided to them under the terms of
the 2016 Agreement with respect to the Note Amendment and the
Warrant Amendment. The 2016 Agreement was included as Exhibit
10.2 to the Companys Current Report on Form 8-K filed with the
Securities and Exchange Commission on March 14, 2016. The
foregoing description of the principal terms of the Waiver does
not purport to be complete and is qualified in its entirety by
reference to the Form of Waiver, a copy of which is filed as an
exhibit to this Current Report on Form 8-K as Exhibit 10.9.
Waiver of Anti-Dilution Rights (the Waiver) with the Qualified
Holders (as defined in the Amended and Restated Securities
Purchase Agreement, dated March 10, 2016, by and among the
Company and the investors party thereto (the 2016 Agreement)). to
the terms of the Waiver, the Qualified Holders agreed to waive
certain anti-dilutive rights provided to them under the terms of
the 2016 Agreement with respect to the Note Amendment and the
Warrant Amendment. The 2016 Agreement was included as Exhibit
10.2 to the Companys Current Report on Form 8-K filed with the
Securities and Exchange Commission on March 14, 2016. The
foregoing description of the principal terms of the Waiver does
not purport to be complete and is qualified in its entirety by
reference to the Form of Waiver, a copy of which is filed as an
exhibit to this Current Report on Form 8-K as Exhibit 10.9.
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Item 2.03
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Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information disclosed in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03.
Form 8-K is incorporated by reference into this Item 2.03.
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Item 3.02
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Unregistered Sales of Equity Securities.
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The information disclosed in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 3.02.
Form 8-K is incorporated by reference into this Item 3.02.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits.
The information set forth in the Exhibit Index immediately
following the page to this Current Report on Form 8-K is
incorporated by reference into this Item 9.01.
following the page to this Current Report on Form 8-K is
incorporated by reference into this Item 9.01.
About root9B Holdings, Inc. (NASDAQ:RTNB)
root9B Holdings, Inc., formerly root9B Technologies, Inc., is engaged in providing cybersecurity, business advisory services principally in regulatory risk mitigation, and energy and controls solutions. The Company helps clients in various industries to provide cyber operations and solutions, mitigate risk, comply with regulations, and leverage and integrate technology. It operates through three segments: Cyber Solutions, IPSA International, Inc. (IPSA)/Business Advisory Solutions, and Energy and Controls Solutions. The Cyber Solutions segment provides cyber security and technology training capabilities, operational support and consulting services. The IPSA/Business Advisory Solutions segment delivers solutions in both regulatory compliance and risk mitigation. The Energy and Controls Solutions segment works with its customers to assess, design and install processes and automation. Its services include cyber operations assessments, forensics, exploitation and defense planning. root9B Holdings, Inc. (NASDAQ:RTNB) Recent Trading Information
root9B Holdings, Inc. (NASDAQ:RTNB) closed its last trading session up +0.24 at 5.98 with 12,344 shares trading hands.