Item
1.01 Entry into a Material Definitive Agreement.
On
February 3, 2021, Ballantyne Strong, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting
Agreement”) with ThinkEquity, a division of Fordham Financial Management, Inc. (the “Representative”), as representative
of the several underwriters listed therein (the “Underwriters”), in connection with a public offering (the “Offering”),
pursuant to which the Company agreed to issue and sell 3,290,000 shares of common stock of the Company (the “Offering Shares”),
par value $0.01 per share (the “Common Stock”), at a public offering price of $2.30 per share. The Offering closed
on February 8, 2021. The estimated net proceeds from the Offering were approximately $6.7 million, after deducting underwriting
discounts and commissions and estimated offering expenses payable by the Company.
The
Underwriting Agreement contains customary representations, warranties and agreements by the Company and customary obligations
of the parties, including a 90-day lock-up period on certain dispositions of Common Stock by the Company, subject to customary
exceptions. Additionally, the Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”), or to contribute to payments the Underwriters
may be required to make because of any of those liabilities. Until February 3, 2022, the Representative has an irrevocable right
of first refusal to act as sole investment banker, sole book-runner and/or sole placement agent, at the Representative’s
sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings,
for the Company, or any successor to or any subsidiary of the Company, using an investment banker, placement agent or broker on
terms customary to the representative. The Representative will have the sole right to determine whether or not any other broker-dealer
will have the right to participate in any such offering and the economic terms of any such participation. The Representative will
not have more than one opportunity to waive or terminate the right of first refusal in consideration of any payment or fee.
Pursuant
to the Underwriting Agreement, the Company also issued to certain of the Representative’s designees, upon closing of the
Offering, warrants to purchase up to 164,500 shares of Common Stock (the “Representative’s Warrants”). The Representative’s
Warrants are exercisable at any time, in whole or in part, from August 2, 2021 until February 3, 2026 at a price per share of
$2.875. The Representative’s Warrants also provide for one “piggyback” registration right with respect to the
registration of the shares of Common Stock underlying the Representative’s Warrants and customary anti-dilution provisions.
The piggyback registration rights last 4.5 years from the initial exercise date of August 2, 2021.
The
Offering was made pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-238757),
preliminary and final prospectus supplements thereto and an accompanying prospectus, all of which were previously filed with the
Securities and Exchange Commission. The Representative’s Warrants were issued and the shares of Common Stock underlying
the Representative’s Warrants, unless registered, are expected to be issued, in each case, in reliance on the exemption
from the registration requirements in Section 4(a)(2) of the Securities Act.
The
foregoing descriptions of the Underwriting Agreement and Representative’s Warrants are qualified in their entirety by reference
to the complete text of the Underwriting Agreement and form of Representative’s Warrants, copies of which are filed herewith
as Exhibits 1.1 and 4.1 and are incorporated herein by reference.
A copy of the opinion of White & Case LLP relating to the legality of the Offering Shares is also filed herewith as Exhibit
5.1.