Financial Technology

KULR TECHNOLOGY GROUP, INC. : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)

Item 1.01Entry into a Material Definitive Agreement.

As previously disclosed in the Current Report on Form 8-K filed on May 16, 2022
and June 3, 2022 (the “Prior 8-K”), KULR Technology Group, Inc. (the “Company”)
entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN,
Ltd.
(“Yorkville” or “YA”), pursuant to which, the Company shall have the right,
but not the obligation, to sell to Yorkville up to $50,000,000 of its shares of
common stock, par value $0.0001 per share (“Common Stock”), at the Company’s
request any time during the commitment period commencing on May 13, 2022 and
terminating on the earliest of (i) the first day of the month following the
24-month anniversary of the SEPA and (ii) the date on which Yorkville shall have
made payment of any advances requested pursuant to the SEPA for Common Stock
equal to the commitment amount of $50,000,000. Each sale the Company requests
under the SEPA (an “Advance”) may be for a number of shares of Common Stock with
an aggregate value of up to $5,000,000. The shares would be purchased at 98.0%
of the Market Price (as defined below) and would be subject to certain
limitations, including that Yorkville could not purchase any shares that would
result in it beneficially owning more than 4.99% of the Common Stock. “Market
Price” is defined in the SEPA as the lowest of the VWAPs (as defined below)
during each of the three consecutive trading days commencing on the trading day
following the Company’s submission of a request for an Advance (an “Advance
Notice”) to Yorkville. “VWAP” is defined in the SEPA to mean, for any trading
day, the daily volume weighted average price of our Common Stock for such date
on the NYSE American as reported by Bloomberg L.P. during regular trading hours.

On June 3, 2022, the Company and Yorkville amended the SEPA pursuant to that
certain Amendment to Standby Equity Purchase Agreement (the “SEPA Amendment”),
to revise the definition of “Commitment Amount” to clarify that, as to any
Advance, the issuance of shares of Common Stock in respect of such Advance would
be excluded from the Exchange Cap (as defined below) if (a) the Company’s
stockholders have approved issuances in excess of the Exchange Cap (as defined
in the SEPA) in accordance with the rules of the Principal Market or (b) the
Purchase Price of the Common Stock with respect to an Advance, equals or exceeds
a per share price equal to the greater of (i) the book value of the Common Stock
immediately preceding the delivery of the Advance Notice (as defined in the
SEPA) or (ii) or the market value of the Common Stock (as reflected on
Bloomberg, LP) immediately preceding the delivery of the Advance Notice (in
either case in compliance with the NYSE American rules).

On September 23, 2022, the Company entered into the Supplemental Agreement to
the SEPA (the “Supplemental Agreement”) with Yorkville, which Supplemental
Agreement is intended to amend and supplement the SEPA, as amended by the SEPA
Amendment. Pursuant to the Supplemental Agreement, Yorkville committed to
advance up to $50,000,000 against future purchases of shares of Common Stock
under the SEPA. Under the Supplemental Agreement, the Company may request from
time-to-time Pre-Paid Advances of up to $15,000,000 each from Yorkville (or such
greater amount that the parties may mutually agree), with a limitation on
aggregate Pre-Paid Advances of $50,000,000. Interest accrues on the outstanding
balance of any Pre-Paid Advance at a rate equal to an annual rate of 10%,
subject to an increase to 15% upon events of default described in the
Supplemental Agreement. The Company will be required to pay to the Investor an
amount in cash representing any amount of a Pre-Paid Advance that remains
outstanding, plus any accrued and unpaid interest thereon, on the date that is
12 months following the date of each Pre-Paid Advance, unless otherwise agreed
by the parties. Furthermore, upon the occurrence of certain events, the Company
may be required to make monthly repayments of amounts outstanding under a
Pre-Paid Advance, each monthly repayment to be in an amount equal to the sum of
(x) $3.0 million, (y) 5% (the “Payment Premium”) in respect of such amount, and
(z) all outstanding accrued and unpaid interest in respect of such Pre-Paid
Advance as of each payment date.

Outstanding Pre-Paid Advances may be offset upon the issuance of our Common
Stock to Yorkville at purchase price equal to the lower of (a) 135% of the of
the daily VWAP of our Common Stock as of the trading day immediately prior to
the date of such Pre-Paid Advance, or the Fixed Price, or (b) 95% of the lowest
VWAP of our Common Stock during the three consecutive trading days immediately
preceding the date on which YA provides a purchase notice (an “Investor Notice”)
to us, or the Variable Price, and the lower of the Fixed Price and the Variable
Price shall be referred to as the Purchase Price; however, in no event shall the
Purchase Price be less than the $0.75 per share, or the Floor Price. Upon the
delivery of an Investor Notice, we shall be deemed to have delivered a
corresponding Advance Notice to the Investor requesting the Advance amount set
forth in the Investor Notice at the Purchase Price. In no event shall the number
of shares of Common Stock issuable to the Investor pursuant to an Investor
Notice and corresponding Advance Notice cause the number of Shares to exceed the
Exchange Cap (as defined in the Supplemental Agreement), to the extent
applicable, provided further that, the Exchange Cap will not apply if (a) the
Company’s stockholders have approved issuances in excess of the Exchange Cap or
(b) the purchase price of shares of Common Stock with respect to an Investor
Noticeand corresponding Advance, equals or exceeds a per share price equal to
the greater of (i) book value of Common Stock immediately preceding the delivery
of the Investor Notice and corresponding Advance Notice or (ii) or the market
value of the Common Stock immediately preceding the delivery of the Investor
Notice.

Concurrently with the entry into the Supplemental Agreement, Yorkville advanced,
as an initial Pre-Paid Advance, the principal amount of $15,000,000. Pursuant to
the Supplemental Agreement, Yorkville may submit to the Company an Investor
Notice of up to $3,000,000 per 30-day period, or such greater amount as the
parties may mutually agree, and any outstanding Pre-Paid Advances, and accrued
interest, will be offset upon the issuance of Common Stock to Yorkville at the
applicable Purchase Price. The Company at its option shall have the right, but
not the obligation, to repay (“Optional Prepayment”) early a portion or all
amounts outstanding under a Pre-Paid Advance, plus a Payment Premium, in cash
provided that (i) at the time of the prepayment notice, the daily VWAP is less
than the Fixed Price and (ii) the Company provides the Investor with at least 10
Trading Days’ prior written notice of its desire to exercise an Optional
Prepayment. The number of shares issuable to Yorkville under any individual
Investor Notice or aggregate Investor Notices shall be limited by the same
limitations set forth in the SEPA, as amended.

In connection with the funding of the initial Pre-Paid Advance, the Company and
Yorkville agreed to apply part of the proceeds to be advance to the Company
toward the repayment of all remaining obligation due under the Promissory Note
dated May 13, 2022 issued to Yorkville by the Company in principal amount equal
to $5,000,000. The Company is not required to pay any additional amounts to
reimburse or otherwise compensate Yorkville in connection with the transactions
contemplated under the Supplemental Agreement except for a $10,000 structuring
fee.

As previously disclosed in the Prior 8-K, pursuant to the SEPA, the Company (i)
is required to register all shares which Yorkville may acquire and file with the
Securities and Exchange Commission a prospectus supplement to the Company’s
prospectus, dated July 13, 2021, filed as part of the Company’s effective shelf
registration statement on Form S-3, File No. 333-257697 (the “Registration
Statement”), registering the shares of Common Stock that are to be offered and
sold to Yorkville pursuant to the SEPA and (ii) currently intends to use the net
proceeds from any sale of the shares for working capital and other general
corporate purposes, which may include, among other things, procuring battery
cell supplies, as well as other key materials, and bringing part of its
production capabilities to North America.

The foregoing is a summary description of certain terms of the SEPA, the SEPA
Amendment and the Supplemental Agreement. For a full description of all terms,
please refer to the copies of the SEPA, the SEPA Amendment and the Supplemental
Agreement that are incorporated by reference and filed herewith as Exhibit 10.1,
Exhibit 10.2 and Exhibit

Item 9.01 Financial Statement and Exhibits.




(d) Exhibits



Exhibit
Number     Description of Document
  5.1        Opinion of Sichenzia Ross Ference LLP
  10.1       Standby Equity Purchase Agreement, dated May 13, 2022, by and between
           KULR Technology Group, Inc. and YA II PN, Ltd. (incorporated by
           reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
           filed with the Securities and Exchange Commission on May 13, 2022)
  10.2       Amendment, dated June 3, 2022, to the Standby Equity Purchase
           Agreement by and between KULR Technology Group, Inc. and YA II PN,
           Ltd.
  10.3       Supplemental Agreement dated as of September 23, 2022 to the Standby
           Equity Purchase Agreement dated as of May 16, 2022 between KULR
           Technology Group, Inc. and YA II PN, LTD.
  23.1       Consent of Sichenzia Ross Ference LLP (included in Exhibit 5.1)
104        Cover page of this Current Report on Form 8-K formatted in Inline XBRL

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