Item 1.01
|
Entry Into a Material Definitive Agreement.
|
On April 18, 2019, Envision Solar International,
Inc. (the “Company”) closed a transaction, entered into pursuant to that certain Underwriting Agreement dated as of
April 16, 2019 (the “Underwriting Agreement”) with Maxim Group LLC (“Maxim”), as representative for the
several underwriters named in Schedule I thereto (the “Underwriters”), pursuant to which the Company agreed to issue
and sell to the Underwriters an aggregate of 2,000,000 units with each unit consisting of one (1) share of the Company’s
common stock, par value $0.001 per share (the “Common Stock”), and a warrant to purchase one (1) share of Common Stock
at an exercise price equal to $6.30 per share (the “Warrants”). In addition, the Company granted the Underwriters a
45-day option to purchase up to 300,000 additional shares of Common Stock, or Warrants, or any combination thereof, at the public
offering price to cover over-allotments, if any. The Common Stock and the Warrants were offered and sold to the public (the
“Offering”) pursuant to the Company’s registration statement on Form S-1 (File Nos. 333-226040), filed by
the Company with the Securities and Exchange Commission (the “Commission”) on July 2, 2018, as amended, which became
effective on April 15, 2019, and a related registration statement filed pursuant to Rule 462 promulgated under the Securities Act
of 1933, as amended (the “Securities Act”). The offering price to the public was $6.00 per unit and the Underwriters
agreed to purchase 2,000,000 units. In addition, the Underwriters purchased 300,000 Warrants upon the exercise of the Underwriters’
over-allotment option. The Company received gross proceeds of approximately $12,000,000, before deducting underwriting discounts
and commissions and estimated offering expenses. In connection with the offering described above, the Company issued a press release
announcing the closing of the offering. A copy of a press release is attached hereto as Exhibit 99.1.
The Underwriting Agreement contains customary
representations, warranties, and covenants by the Company. It also provides for customary indemnification by each of the Company
and the Underwriters, severally and not jointly, for losses or damages arising out of or in connection with the offering, including
for liabilities under the Securities Act, other obligations of the parties and termination provisions. In addition, pursuant to
the terms of the Underwriting Agreement, the Company, certain existing shareholders and each of the Company’s directors and
executive officers have entered into “lock-up” agreements with the Underwriters that generally prohibit the sale, transfer,
or other disposition of securities of the Company for a period of at least 180 days following April 18, 2019 without the prior
written consent of Underwriters.
Pursuant to the Underwriting Agreement,
we also agreed to issue to the Underwriters warrants (the “Representative’s Warrants”) to purchase up to a total
of 100,000 shares of common stock (5% of the shares of common stock sold). The warrants are exercisable at $6.60 per share and
have a term of five years. Pursuant to the customary FINRA rules, the representative’s warrants are subject to a 180-day
lock-up pursuant to which the representative will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities
underlying these warrants, nor will it engage in any hedging, short sale, derivative, put, or call transaction that would result
in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the date of the
prospectus relating to the offering. A copy of the form of the Representative’s Warrant is attached as an Exhibit 4.2 to
this report, and is incorporated herein by reference.
In addition, pursuant the Underwriting
Agreement, we granted Maxim, a right of first refusal, for a period of twelve months from the commencement of sales of this offering,
to act as sole and exclusive investment banker, book-runner, financial advisor, underwriter and/or placement agent, at the Maxim’s
sole and exclusive discretion, for each and every future public and private equity and debt offering.
The total expenses of the offering was
approximately $500,000 which included Maxim’s expenses relating to the offering, including without limitation the reasonable
fees, disbursements and other charges of the underwriters’ counsel, up to $100,000.
On April 18, 2019,
the Company also entered into a Warrant Agency Agreement with Corporate Stock Transfer, Inc. (“Warrant Agreement”)
pursuant to which Corporate Stock Transfer, Inc. agrees to act as transfer agent with respect to the Warrants. A copy of the Warrant
Agreement is attached as an Exhibit 10.1 to this report, and is incorporated herein by reference.
A copy of the Underwriting Agreement is
attached as Exhibit 1.1 to this report, and is incorporated herein by reference. The foregoing description of the material terms
of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to such exhibit. The
provisions of the Underwriting Agreement, including the representations and warranties contained therein, are not for the benefit
of any party other than the parties to such agreement and are not intended as a document for investors or the public to obtain
factual information about the current state of affairs of the parties to that document. Rather, investors and the public should
look to other disclosures contained in the Company’s filings with the Commission.
The final prospectus relating to the offering
has been filed with the SEC and is available on the SEC’s web site at http://www.sec.gov. Copies of the final prospectus
relating to the offering, when available, may be obtained from Maxim Group LLC, 405 Lexington Avenue, New York, NY 10174, or from
the above-mentioned SEC website.