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Item 1.01.
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Entry into a Material
Definitive Agreement.
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Securities Purchase Agreement
On September 14, 2016, EVINE Live
Inc. (the “Company”) entered into Securities Purchase Agreements (the “Purchase Agreement”) with
certain accredited investors pursuant to which it agreed to sell, in the aggregate for all investors: (a) 5,952,381 shares of
the Company’s common stock at a price of $1.68 per share, (b) Warrants to purchase 2,976,190 shares of the
Company’s common stock (the “Warrants”), and (c) options (“Options”) by which certain investors
may, upon exercise, purchase additional shares of the Company’s common stock and warrants (“Option
Warrants”) to purchase shares of the Company’s common stock. If all of the Warrants, Option and Option Warrants
issued by the Company are exercised, the total shares of common stock issued in connection with this offering (the
“Offering”) is expected to represent no more than approximately 19.999% of the Company’s total issued and
outstanding shares following such exercises.
The Company expects to raise total gross
proceeds of $10,000,000 through the Offering, not including the proceeds of any future exercise of the Warrants, Options and Option
Warrants. The Company intends to use the net proceeds of the Offering for general working capital purposes and debt repayment.
In connection with the closing of the Offering, the Company will pay estimated expenses of $700,000.
Brand Building Advisory Committee
In connection with the Offering, Messrs.
Tommy Hilfiger and Tommy Mottola have agreed to join the Company’s newly-formed Brand Building Advisory Committee, which
is a non-board committee that will advise the Board of Directors, including on matters related to brand strategy.
Registration Rights
As part of the Purchase Agreement, the
Company has agreed to register the shares of common stock sold in the private placement and the shares of common stock issuable
upon exercise of the Warrants, Options and Option Warrants, as well as the Warrants, Options and Option Warrants (collectively,
the “registrable securities”) for resale or other disposition. Specifically, the Company agreed to (i) file with the
Securities and Exchange Commission a shelf registration statement with respect to the resale of the registrable securities within
30 days after the closing date; (ii) use commercially reasonable efforts to have the shelf registration statement declared effective
by the SEC as soon as possible after the initial filing, and in any event no later than 90 days after the closing date (or 120
days in the event of a full review of the shelf registration statement by the SEC); and (iii) keep the shelf registration statement
effective until the earlier of the second anniversary of the closing or such time as all registrable securities may be sold pursuant
to Rule 144 under the Securities Act of 1933, without the need for current public information or other restriction. If the Company
is unable to comply with any of the above covenants, it will be required to pay liquidated damages to the investors in the amount
of 1% of the investors’ purchase price for every 30 days until such non-compliance is cured (subject to a 12% cap), with
such liquidated damages payable in cash.
Warrant and Option Coverage
The Warrants will expire five years after
issuance and will not be exercisable until six months following the closing of the private placement. The exercise price of the
Warrants is $2.90 per share.
Each of the Warrants contains a limitation
on the number of shares of common stock that an Investor may purchase through the Offering. This limitation varies by investor,
but the aggregate limitation, counting all Investors, prevents the Offering from exceeding 19.999% of the Company’s issued
and outstanding Common Stock following exercise of all Warrants, Options and Option Warrants.
The Options are not issued for a specific
number of shares; rather, each may be exercised for a combination of shares of the common stock and warrants to purchase common
stock sufficient to increase such Investor’s holdings in the Company, on a post-exercise basis, to a specific beneficial
ownership percentage. This number varies by Investor, but the aggregate Options and Option Warrants, if exercised in full by all
Investors, would increase the holdings of all Investors, collectively, to no more than approximately 19.999% of the Company’s
issued and outstanding Common Stock at such time. Each Option may only be exercised once, in whole or in part, and will have a
per-share exercise price equal to the five-day volume weighted average price per share of the Company’s common stock as of
the day immediately prior to exercise. The term of each Option is six months from issuance; provided, however, that an Option may
not be exercised for the first 30 days following issuance.
A copy of the form of Purchase Agreement,
which includes the forms of the Warrant and Option, are filed as exhibits to this Form 8-K and are incorporated herein by reference.
Closing
The closing of the Offering is expected
to occur on or about September 20, 2016, subject to certain customary closing conditions.
Exemption
The offer and sale of the Securities will
be exempt from registration under the Securities Act of 1933, and the issuance of the common stock upon exercise of the Warrants,
Options, and warrants issued upon exercise of the Options will be exempt, pursuant to Section 4(a)(2) of the Securities Act, on
the basis that they do not constitute a public offering since they are being made to a small number of accredited, qualified investors
and involve no general solicitation. The Securities may not be offered or resold in the United States in the absence of an effective
registration statement or exemption from the Securities Act’s registration requirements.
Press Release
On September 14, 2016, the Company issued
a press release announcing the execution of the Purchase Agreement, a copy of which is filed as Exhibit 99.1 hereto.