Item 1.01
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Entry into Material Definitive Agreement.
On August 10, 2018 (the “Closing
Date”), TheMaven, Inc., a Delaware corporation (the “Company”), closed on a securities purchase agreement (the
“Securities Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which
the Company sold an aggregate of 18,730 shares of the Company’s Series H Convertible Preferred Stock, par value $0.01 per
share (the “Series H Preferred Stock”), at a stated value of $1,000 (the “Stated Value”), initially convertible
into 56,757,575 shares of the Company’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 $0.33 (the “Conversion Price”), for aggregate gross
proceeds of $13 million. Of the shares of Series H Preferred Stock issued, 5,730 were issued upon conversion of an aggregate $4,775,000
of 10% Convertible Debentures (the “Debentures”) issued by the Company on June 15, 2018 to certain accredited investors,
including 1,200 shares of Series H Preferred Stock issued to James Heckman, the Company’s Chief Executive Officer, and 30
shares of Series H Preferred Stock issued Josh Jacobs, the Company’s President.
The number of shares issuable upon
conversion of the Series H Preferred Stock is adjustable in the event of stock splits, stock dividends, combinations of shares
and similar transactions. In addition, if at any time prior to the nine month anniversary of the Closing Date, the Company sells
or grants any option or right to purchase or issues any shares of Common Stock, or securities convertible into shares of Common
Stock, with net proceeds in excess of $1 million in the aggregate, entitling any person to acquire shares of Common Stock at an
effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price”),
then the Conversion Price shall be reduced to equal the Base Conversion Price. All of the shares of Series H Preferred Stock shall
convert automatically into shares of Common Stock on the fifth anniversary of the Closing Date at the then Conversion Price.
B. Riley FBR, Inc. (“B. Riley”)
acted as placement agent for the financing. In consideration for its services as placement, the Company paid B. Riley a fee of
$575,000 (including a previously paid retainer of $75,000) and issued to B. Riley 669 shares of Series H Preferred Stock. In addition,
entities affiliated with B. Riley purchased 5,592 shares of Series H Preferred Stock in the financing.
In connection with the financing, B.
Riley and a majority-in-interest of the Investors have each been granted the right to designate one director to the Company’s
Board of Directors, (each a “Designee”). Further, so long as at least 20% of the shares of Series H Preferred Stock
issued in the financing are outstanding, the Company shall recommend to its stockholders that it elect each Designee to serve as
a director on the Company’s Board of Directors.
The Company intends to use the net proceeds from the financing
to consummate its previously announced acquisitions of Say Media, Inc. and HubPages, Inc. and for working capital and general corporate
purposes.
Additionally, pursuant to a Registration
Rights Agreement (“Registration Rights Agreement”) entered into in connection with the Securities Purchase Agreement,
the Company agreed to register the shares issuable upon conversion of the Series H Preferred Stock for resale by the Investors.
The Company has committed to file the registration statement by no later than 75 days after the Closing Date and to cause the registration
statement to become effective by no later than 120 days after the Closing Date (or, in the event of a full review by the staff
of the Securities and Exchange Commission, 150 days following the Closing 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 Purchase Agreement.
The foregoing is only a brief description
of the respective material terms of the Securities Purchase Agreement and the Registration Rights Agreement and is qualified in
its entirety by reference to the form of Purchase Agreement and the Registration Rights Agreement that are filed as Exhibits 10.1
and 10.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.