TOMI Environmental Solutions, Inc. (OTCMKTS:TOMZ) Files An 8-K Entry into a Material Definitive Agreement

TOMI Environmental Solutions, Inc. (OTCMKTS:TOMZ) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01.Entry into a Material Definitive Agreement.

March 2017 Private Placement
On March 15, 2017, TOMI Environmental Solutions, Inc. (the
“Company”) entered into subscription agreements (the
“Subscription Agreements”), to which it issued to certain
accredited investors (the “Investors”) unregistered senior
callable convertible promissory notes (the “Notes”) and
three-year warrants (each, a “Warrant”) to purchase an
aggregate of 833,333 shares of the Company’s common stock, par
value $0.01 per share (“Common Stock”) at an exercise price of
$0.69 per share (the “Warrant Shares”), in exchange for
aggregate gross proceeds of $5.3 million (the “March 2017
Private Placement”). The closing of the March 2017 Private
Placement occurred on March 15, 2017.
Subscription Agreement
to the terms of the Subscription Agreements, the Company agreed
to sell and issue the Notes and Warrants to the Investors and
each Investor agreed to pay $100,000 for each $100,000 of
principal amount of Notes and associated Warrants to purchase
16,666.66 shares of Common Stock for each $100,000 of principal
amount of Notes purchased by such Investor. The Subscription
Agreements contain representations and warranties of the
Investors and the Company that are typical for transactions of
this type. The Company agreed to use the proceeds from the sale
of the Notes and Warrants for research and development,
international product registration, expansion of its internal
sales force, marketing, public relations, expansions of its U.S.
Environmental Protection Agency label and for working capital and
general corporate purposes.
Notes
The Notes bear interest at a rate of 4% per annum and mature on
August 31, 2018, unless earlier redeemed, repurchased or
converted. The Notes will rank senior to all of the Company’s
unsecured debt. The Notes are convertible at the option of the
holder into Common Stock at a conversion price of $0.54 per share
(as subject to adjustment therein). From and after September 1,
2017, the Company may redeem the Notes at any time prior to
maturity at a price equal to 100% of the outstanding principal
amount of the Notes to be redeemed, plus accrued and unpaid
interest as of the redemption date. Interest on the Notes is
payable semi-annually in cash on February 28 and August 31 of
each year, beginning on August 31, 2017.
An event of principal payment default will occur under the Notes
in the event the Company has not paid the principal amount of any
Note by the maturity date, and an event of other payment default
will occur if the Company fails to make any interest payment due
under any Note when due, files a voluntary petition in bankruptcy
or winds up its operations. If any of the foregoing defaults
continue and have not been remedied within 15 calendar days, the
holder of such Note may request in writing that all or a part of
such holder’s Note is converted into shares of Common Stock at
the conversion price of $0.54 per share.
Warrants
Each Warrant is exercisable immediately for cash. The Warrants
also provide that the exercise price of each Warrant will be
adjusted upon the occurrence of certain events such as stock
dividends, stock splits and other similar events.
The Warrants issued to the Investors were not registered under
the Securities Act of 1933, as amended (the “Securities Act”),
or the securities laws of any state, and were offered and will be
sold and issued in reliance on the exemption from registration
under the Securities Act provided by Section 4(a)(2) of the
Securities Act and/or Rule 506 of Regulation D promulgated
thereunder (“Regulation D”). The shares issuable to Investors
upon conversion of the Notes and the Warrant Shares issuable to
Investors upon exercise of the Warrants were not registered under
the Securities Act, or the securities laws of any state, and were
offered in reliance on the exemption from registration under the
Securities Act provided by Section 4(a)(2) of the Securities Act
and/or Rule 506 of Regulation D and may be sold upon exercise to
an available exemption, including Section 4(a)(2) and Section
3(a)(9) of the Securities Act. Each Investor was an accredited
investor (as defined in Rule 501 of Regulation D) at the time of
the March 2017 Private Placement.
The forms of Note and Warrant are attached as Exhibits 4.1 and
4.2, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference. The foregoing descriptions of
these instruments do not purport to be complete and are qualified
in their entirety by reference to such exhibits.

Item 2.03.Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
As more fully described in Item 1.01 above, which disclosure
regarding the Notes and Warrants is incorporated by reference
herein, on March 15, 2017, the Company issued the Notes and the
Warrants to the Investors to the Subscription Agreements.
Item 3.02.Unregistered Sales of Equity
Securities.
As more fully described in Item 1.01 above, which disclosure
regarding the Notes and Warrants is incorporated by reference
herein, on March 15, 2017, the Company issued the Notes and the
Warrants to the Investors to the Subscription Agreements. The
issuance of the Note is, and upon conversion of the Note on its
terms, the issuance of the shares of Common Stock upon such
conversion will be, and the issuance of the Warrant is, and upon
exercise of the Warrant on its terms, the issuance and sale of
the Warrant Shares will be, exempt from registration to an
exemption afforded by Section 4(a)(2) of the Securities Act and
Rule 506(b) of Regulation D, based on representations of the
Investors, which included, in pertinent part, that the recipient
is an “accredited investor”, as that term is defined in Rule
501 of Regulation D, who is acquiring the Note and Warrant for
investment purposes for its own account and not as nominee or
agent, and not with a view to the resale or distribution thereof,
and that such the investor understands that the Note and Warrant
may not be sold or otherwise disposed of without registration
under the Securities Act or an applicable exemption therefrom.
Item 8.01.Other Events.
On March 20, 2017, the Company issued a press release regarding
the March 2017 Private Placement, which is attached as Exhibit
99.1 to this Current Report on Form 8-K and incorporated herein
by reference.
Item 9.01.Financial Statements and Exhibits.
(d)Exhibits.
Exhibit Number Description
4.1 Form of Note
4.2 Form of Warrant
99.1 Press Release dated March 20, 2017


About TOMI Environmental Solutions, Inc. (OTCMKTS:TOMZ)

TOMI Environmental Solutions, Inc. (TOMI) is a provider of infection prevention and decontamination products and services. The Company is focused primarily on life sciences, including healthcare, bio-safety, pharmaceutical, clean-room and research. The Company provides environmental solutions for indoor and outdoor surface decontamination through the sale of equipment, services and licensing of its SteraMist Binary Ionization Technology (BIT), which is a hydrogen peroxide based mist and fog. BIT technology is the platform that runs its SteraMist equipment. This technology is developed for the neutralization of anthrax spores. SteraMist BIT is a hospital-healthcare disinfectant that is used as a misting/fogging agent. BIT is a two-step process that aerosolizes and activates a low concentration hydrogen peroxide solution producing a fine aqueous mist that contains a high concentration of Reactive Oxidative Species (ROS), mostly hydroxyl radicals.

TOMI Environmental Solutions, Inc. (OTCMKTS:TOMZ) Recent Trading Information

TOMI Environmental Solutions, Inc. (OTCMKTS:TOMZ) closed its last trading session 00.000 at 0.150 with 10,800 shares trading hands.

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