Item
1.01 Entry into Material Definitive Agreement.
Series
K Securities Purchase Agreement
TheMaven,
Inc., ( “Maven”) entered into securities purchase agreements (the “Securities Purchase Agreements”) on
October 23, 2020 and October 28, 2020, in a single private placement of its securities with several accredited investors (the
“Investors”). In the offering Maven sold an aggregate of 12,042 shares of Series K Convertible Preferred Stock, par
value $0.01 per share (the “Series K Preferred Stock”), at a per share stated value of $1,000 (the “Stated Value”).
The Series K Preferred Stock is initially convertible into 30,105,225 shares of Maven’s common stock, par value $0.01 per
share (the “Common Stock”), at a conversion rate equal to the Stated Value divided by the conversion price of $0.40.
The aggregate gross proceeds was $12.0 million.
Of
the gross proceeds received in the offering, approximately $8.6 million were cash proceeds from several investors, which will
be used for general corporate purposes and payment on a prior investment of $2.6 million, and approximately $3.4 million represented
conversion of outstanding amounts under the existing debt facility between Maven and BRF Finance Co., LLC.
The
number of shares issuable upon conversion of the Series K Preferred Stock will be adjusted in the event of stock splits, stock
dividends, combinations of shares and similar transactions. All of the shares of Series K Preferred Stock convert automatically
into shares of Common Stock on the date an amendment to Maven’s Certificate of Incorporation is filed and accepted with
the State of Delaware that increases the number of authorized shares of Common Stock to at least a number permitting all the Series
K Preferred Stock, and all of Maven’s Series J Convertible Preferred Stock, Series I Convertible Preferred Stock and Series
H Convertible Preferred Stock, to be converted in full. Officers of Maven have the right to vote the issued shares of Series K
Preferred Stock in favor of the foregoing certificate of incorporation amendments to increase the authorized share capitalization
of the company and any reverse stock split proposed by the board of directors.
B.
Riley FBR, Inc., a full service investment bank and wholly-owned subsidiary of B. Riley Financial, Inc. (“B. Riley”)
acted as placement agent for the financing and earned a fee of $520,500 in consideration for its services.
Additionally,
pursuant to a Registration Rights Agreement (“Registration Rights Agreement”) entered into in connection with the
Securities Purchase Agreements, Maven agreed to register the shares issuable upon conversion of the Series K Preferred Stock for
resale by the Investors. Maven has committed to file the registration statement by no later than the 30th calendar day following
the date the Company files its (a) Annual Reports on Form 10-K for the fiscal year ended December 31, 2018 and December 31, 2019,
(b) all its required Quarterly Reports on Form 10-Q since the quarter ended September 30, 2018, through the quarter ended September
30, 2020, and (c) any Form 8-K Reports that the Company is required to file with the Commission; provided, however, if such 30th
calendar day is on or after February 12, 2021, then such 30th calendar date shall be tolled until the 30th calendar day following
the date that the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “Filing
Date”). Maven has also committed to cause the registration statement to become effective by no later than 90 days after
the Filing Date (or, in the event of a full review by the staff of the Securities and Exchange Commission, 120 days following
the Filing Date). The Registration Rights Agreement provides for liquidated damages upon the occurrence of certain events up to
a maximum amount of 6% of the aggregate amount invested by such Investor pursuant to the Securities Purchase Agreement.
Amendment
to Second Amended and Restated Note Purchase Agreement
On
October 23, 2020, the Company entered into Amendment No. 1 to Second Amended and Restated Note Purchase Agreement (the “Amended
Note Purchase Agreement”) with the guarantors from time to time party thereto, each of the purchasers from time to time
named on Schedule I attached thereto and BRF Finance Co., LLC, in its capacity as agent for the purchasers. The material terms
of the Amended Note Purchase Agreement are as follows:
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The
September 30, 2020, interest payment to be paid in the form of PIK Interest;
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The
December 31, 2020, interest payment and all interest payments due in 2021, are to be paid in the form of PIK Interest or,
at the option of each note holder, to have all or a portion of the amount of interest then due paid in the form of the Company’s
Series K Preferred Stock or, in the event that the Series K Preferred Stock has been converted into shares of the Company’s
common stock, in common stock;
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The
maturity date of the principal amount of the delayed draw term notes due on March 31, 2021 (the “Delayed Draw First
Maturity Notes”) is changed to March 31, 2022;
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The
maturity date of the notes (other than the Delayed Draw First Maturity Notes) is changed from June 14, 2022 to December 31,
2022;
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Each
holder of notes is provided with the option to convert up to the Conversion Portion (as defined below) of the Delayed Draw
First Maturity Notes into Series K Preferred Stock (or common stock if the Series K Preferred Stock has been converted into
common stock at such time). “Conversion Portion” means 28% of the aggregate cash proceeds received by the Company
from the issuance and sale of Series K Preferred Stock during the 90-day period commencing October 23, 2020 (the “Series
K Exception Period”);
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The
requirement to make mandatory prepayments on the notes out of proceeds received from sales of the Company’s equity,
including the proceeds received from the issuance and sale of the Series K Preferred Stock during the Series K Exception Period,
is waived; and
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In
connection with a note holder’s election to receive Series K Preferred Stock (or shares of common stock upon the conversion
in such shares of the Series K Preferred Stock), the aggregate liquidation preference of the Series K Preferred Stock to be
issued for each $1,000 of obligations under the notes so converted, will be based on the purchase price paid for $1,000 in
liquidation preference of the Series K Preferred Stock during the Series K Exception Period.
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The
foregoing is only a brief description of the respective material terms of the Securities Purchase Agreements, the Registration
Rights Agreement and the Amended Note Purchase Agreement and is qualified in its entirety by reference to the form of Securities
Purchase Agreements, the form of Registration Rights Agreement and Amended Note Purchase Agreement that are filed as Exhibits
10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and incorporated by reference herein.