|
|
|
Item 1.01.
|
|
Entry Into a Material Definitive Agreement.
|
Securities Purchase Agreement
On September 20, 2019, General Cannabis Corp, a Colorado corporation (the Company), entered into a Securities Purchase Agreement (the Securities Purchase Agreement) with certain accredited investors (the Investors), pursuant to which the Company issued and sold to the Investors (a) an aggregate of $400,000 principal amount of senior unsecured promissory notes (the Notes) and (b) warrants (the Warrants) to purchase an aggregate of 400,000 shares of common stock, par value $0.001 per share, of the Company (the Common Stock).
The Notes will bear interest at an annual rate of 12% and will mature on October 31, 2020 (the Maturity Date). The Warrants are exercisable at an exercise price of $1.30 per Warrant, subject to adjustment as provided in the Warrants, at any time prior to (a) the earlier of the Maturity Date and an Acquisition (as defined in the Warrants) or (b) if the Note is prepaid at any time pursuant to the terms thereof, October 31, 2022.
As disclosed on the Companys Current Report on Form 8-K filed September 17, 2019, on September 17, 2019, the Company previously issued an aggregate of $1,106,000 principal amount of Notes and Warrants to purchase up to an aggregate of 1,106,000 shares of Common Stock to certain investors. Pursuant to the Securities Purchase Agreement, the Company may issue additional Notes up to an aggregate of $5,000,000 principal amount of Notes at any time outstanding and additional Warrants to purchase up to an aggregate of 5,000,000 shares of Common Stock to additional accredited investors on the terms and conditions set forth in the Securities Purchase Agreement.
Pursuant to the Securities Purchase Agreement, the Company agreed to file with the Securities and Exchange Commission a registration statement on Form S-3 (or such other form, including a post-effective amendment, as is then available to the Company) as soon as reasonably practicable providing for the resale of the Common Stock issuable upon exercise of the Warrants and to use commercially reasonable efforts to cause such registration statement to be declared effective.
The foregoing description of the Securities Purchase Agreement, the Notes and the Warrants do not purport to be complete and are qualified in their entirety by reference to the forms of Securities Purchase Agreement, Note and Warrant filed as Exhibits 10.1, 4.1 and 4.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.