|
Item
1.01
|
Entry
into a Material Definitive Agreement.
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As
described below, Monaker Group, Inc. (the “
Company
”, “
we
” or “
us
”) has
taken steps to raise additional capital to meet keys requirement that the Company believes will enable its common stock to qualify
for uplisting onto the NASDAQ Capital Market (“
NASDAQ
”). The capital was raised through the exercise of warrants
by directors and a major shareholder, as discussed below. Upon completion of the uplisting, which is still in process, and still
subject to NASDAQ approval and confirmation, the liquidated damage provisions of the Purchase Agreement (discussed below) will
terminate.
On
January 10, 2018, the Company entered into a First Amendment to Warrant with Pacific Grove Capital LP (“
Pacific
”),
one of the purchasers (collectively, the “
Purchasers
”) of shares and warrants pursuant to the terms of that
certain Common Stock and Warrant Purchase Agreement entered into between the Company and the purchasers named therein dated July
31, 2017 (the “
Purchase Agreement
”).
Pursuant
to the First Amendment to Warrant, the Company and Pacific agreed to reduce the exercise price of the warrants to purchase 875,000
shares of common stock which Pacific acquired pursuant to the Purchase Agreement, from $2.10 per share to $1.05 per share, in
consideration for Pacific immediately exercising such warrants for cash. This warrant exercise, along with the other warrants
exercised as described below, provided additional funds and increased stockholders’ equity required to qualify for consideration
to have the Company’s common stock uplisted onto the NASDAQ Capital Market (“
NASDAQ
”). Upon uplifting
to NASDAQ, the liquidated damage provisions of the Purchase Agreement (discussed below), relating to the failure of the Company
to uplist prior to the Required Uplisting Date (defined below) will cease.
Additionally,
the Purchase Agreement includes certain liquidated damage provisions which require the Company to grant to the Purchasers, as
partial liquidated damages for any delay in obtaining an uplisting to the NASDAQ which uplisting was required to have occurred,
pursuant to the Purchase Agreement, on or before December 9, 2017 (the “
Required Uplisting Date
”), additional
warrants (on substantially similar terms as the warrants granted pursuant to the Purchase Agreement) equal to each Purchaser’s
pro rata share of 1% of the warrants sold pursuant to the Purchase Agreement, for each day that the Company fails to uplist its
common stock to NASDAQ after the Required Uplisting Date (the “
Liquidated Damages
”). A total of up to 100%
of the warrants sold pursuant to the Purchase Agreement may be issued to the Purchasers as Liquidated Damages.
Consequently,
Pacific was due additional warrants to purchase 271,250 shares of the Company’s common stock in connection with the Liquidated
Damages, as of the parties entry into the First Amendment to Warrant, which warrants Pacific also agreed to immediately exercise
for cash at a reduced exercise of $1.05 per share (compared to the original exercise price of such warrants, $2.10 per share),
pursuant to the First Amendment to Warrant.
Total
consideration received from the exercise of the warrants by Pacific pursuant to the First Amendment to Warrant was $1,203,563.
The
description of the First Amendment to Warrant above is not complete and is qualified in its entirety by the full text of the First
Amendment to Warrant, a copy of which is filed herewith as
Exhibit 10.1
, which is incorporated by reference in this
Item
1.01
in its entirety.
As
a result of the reduction in the exercise price of the Pacific warrants which was agreed to pursuant to the First Amendment to
Warrant, the anti-dilution provisions of the Purchase Agreement and the Purchaser warrants was triggered. Specifically, because
the Company issued shares of common stock below (a) the $2.00 price per share of the securities sold pursuant to the Purchase
Agreement, the Purchasers are due an additional 36,142 shares of the Company’s common stock; and (b) the $2.10 exercise
price of the warrants sold pursuant to the Purchase Agreement (and the warrants granted to the placement agent), the exercise
price of such warrants automatically decreased to $2.05 per share.
In
aggregate between the Pacific warrant exercises and the insider warrant exercises described below under
Item 3.02
, the
Company raised $1,664,013 in proceeds, which funds (less expenses and applicable fees) the Company required to meet the minimum
stockholders’ equity required to uplist its common stock onto the NASDAQ, which uplisting the Company hopes to accomplish,
subject to approval for such uplisting by the NASDAQ, by the end of January 2018.