Item 3.02 Unregistered Sales of Equity Securities
On October 10, 2018, Vivos, Inc. (the
“
Company
”) consummated a private placement
transaction (the “
Private
Placement
”), pursuant to
which the Company offered, issue and sold an aggregate of
315,600,000 shares of Company common stock, par value $0.001 per
share (“
Common
Stock
”), and shares of
newly established Series B Convertible Preferred Stock
(“
Series B
Preferred
”) on an as
converted into Common Stock basis (together, the
Shares
”),
to certain accredited investors, and which resulted in gross
proceeds to the Company of $1,578,000. Shares of Series B Preferred
were issued to certain investors instead of Common Stock due to
beneficial ownership limitations preventing such investors from
owning in excess of 4.99% of the total voting securities of the
Company.
Under the terms of the Private Placement,
participants were issued warrants equal to 50% of the Shares
purchased in the Private Placement (the “
Warrants
”). The Warrants have a
two-year term and are exercisable for shares of the Company’s
Common Stock at a price of $0.01 per share.
As consideration for the sale and issuance of the
Shares in the Private Placement, (i) the Company entered into
Securities Purchase Agreements (the “
Purchase
Agreements
”) with certain
accredited investors, pursuant to which the Company received gross
proceeds of $725,000; and (ii) certain holders of debt instruments
issued by the Company exchanged such debt for Shares in the
aggregate amount of $853,000, which debt instruments include, among
others, (a) certain bridge loans in the aggregate principal amount
of $175,000 and buying power of $210,000, and (b) debt with an
outstanding balance of $442,651 held by the Company’s
Chairman of the Board.
In
connection with the consummation of the Private Placement, the
outstanding balance of $2,253,538 due pursuant to certain
outstanding convertible secured debentures and convertible notes,
all of which had variable rate conversion features, automatically
converted into an aggregate of 563,399,500 Shares (the
“
Debt
Conversion
”) pursuant to Path Forward and Standstill
Agreements previously entered into by and between the Company and
the holders of such debentures and notes (the “
Path Forward Agreements
”). In
addition, as agreed upon in the Path Forward Agreements, the
Company repurchased $333,333 of outstanding debt due under certain
secured convertible debentures in consideration for the cash
payment by the Company to the holder of such debentures of $200,000
(the “
Redemption
”). The Redemption was
consummated on October 10, 2018 using a portion of the proceeds
from the Private Placement. The shares issued pursuant to the Path
Forward Agreements are subject to a restriction on any sales of
such shares below $0.02 per share through December 31, 2018 and are
subject to certain volume limitations on any sales below $0.01 per
share until June 30, 2019.
The
Shares offered, issued and sold pursuant to the Private Placement
and the Debt Conversion were issued without registration and
are subject to restrictions under the Securities Act of 1933, as
amended, and the securities laws of certain states, in
reliance on the private offering exemptions contained in Section
4(a)(2) of the Securities Act of 1933, as amended, and on
Regulation D promulgated thereunder, and in reliance on similar
exemptions under applicable state laws as a transaction not
involving a public offering.
The
foregoing descriptions of the Purchase Agreements and Warrants do
not purport to be complete, and are qualified in their entirety by
reference to the same, forms of which are attached to this Current
Report on Form 8-K as Exhibits 10.1 and 4.1, respectively, and
are incorporated by reference herein.