UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO SECTION 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For
the month of September 2019
Commission
File Number: 001-38772
REEBONZ
HOLDING LIMITED
(Exact
Name of Registrant as Specified in Its Charter)
c/o
Reebonz Limited,
5 Tampines North Drive 5
#07-00
Singapore 528548
+65 6499 9469
(Address of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
I.
Financing Transaction for Issuance of Senior Convertible Notes
On
September 4, 2019, Reebonz Holding Limited (the “Company” or “We”) entered into a financing transaction
for the issuance of a series of senior convertible notes of the Company, in the aggregate original principal amount of $3,750,000
(the “Notes”) pursuant to a Securities Purchase Agreement by and among Reebonz Holding Limited and each of the investors
listed on the Schedule of Buyers party thereto (the “Securities Purchase Agreement”). Upon closing of the sale of
the Notes (the “Closing”), the Company is expected to receive gross cash proceeds of $3.525 million. Roth Capital
Partners and Maxim Group LLC acted as placement agents (the “Placement Agents”) in the transaction. The Company will
receive approximately $3.3 million in net proceeds at Closing, after deducting placement agent fees payable to the Placement Agents
and Buyer’s counsel in connection with the transaction.
The
preceding summary of the Securities Purchase Agreement is not complete and is qualified in its entirety by reference to the full
text of the Securities Purchase Agreement, the form of which is attached as Exhibit 10.1 to this Form 6-K.
This
report on Form 6-K does not constitute an offer to sell or the solicitation of an offer to purchase the Notes.
II.
Convertible Notes
Ranking
and Conversion
Pursuant
to that certain Form of Note entered into in connection with the Securities Purchase Agreement (the “Form of Note”),
payments due under the Notes (i) rank pari passu with all other Notes of the same series and (b) are senior to all other indebtedness
of the Company and its subsidiaries, subject to specified exceptions with respect to permitted senior indebtedness as specified
in the Form of Note. The permitted senior indebtedness includes the Company’s existing indebtedness. At any time after the
Issuance Date (as defined in the Form of Note), the Notes are convertible into validly issued, fully paid and non-assessable Ordinary
Shares of the Company.
Maturity
Date
Unless
earlier converted or redeemed, the Notes mature on July 31, 2020 (the “Maturity Date”), subject to the right of the
investors to extend the Maturity Date (i) if an event of default under the Notes has occurred and is continuing or any event shall
have occurred and be continuing that with the passage of time and the failure to cure would result in an event of default under
the Notes and (ii) for a period of 20 business days following the consummation of a Fundamental Transaction (as defined in the
Form of Note), including specified change of control events.
Interest
Interest
does not accrue on the Notes unless and until an Event of Default (as defined in the Form of Note) has occurred. From and after
the occurrence and during the continuance of any Event of Default, interest shall accrue at eighteen percent (18.0%) per annum,
shall be computed on the basis of a 360-day year and twelve 30-day months, shall compound each calendar month and shall be payable
in arrears on the first trading day of each such calendar month in which interest accrues. Accrued and unpaid interest, if any,
shall also be payable by way of inclusion of such interest in the Conversion Amount (as defined in the Form of Note) on each conversion
date or upon any redemption or any required payment, including upon selected events of default.
Installment
Payment of Principal
On
November 29, 2019, and thereafter, on the last Trading Day of the calendar month immediately following the previous Installment
Date until and including the Maturity Date, the Company is required to make installment payments equal to 1/9th of
the initial outstanding principal amount under the Note, which shall be paid in cash or Ordinary Shares of the Company. If the
Company elects to make an installment payment in cash (an “Installment Redemption”) the Company shall pay in cash
an amount equal to 103% of the applicable Installment Redemption Amount for such installment. If the Company elects to make an
installment payment in Ordinary Shares (subject to certain Equity Conditions), the Installment Redemption Amount shall be satisfied
by issuing the number of Ordinary Shares calculated based on the Installment Conversion Price, which is the lower of (i) the Conversion
Price then in effect (initially at $6.50 per share), and (ii) 85% of the quotient of (A) the sum of the VWAP of the Ordinary Shares
for each of the three (3) Trading Days with the lowest VWAP of the Ordinary Shares during the twenty (20) consecutive Trading
Day period ending and including the Trading Day immediately prior to the applicable Installment Date, divided by (B) three (3).
If the Company elects to satisfy all or any portion of an installment in shares of Ordinary Shares, the Company will pre-deliver
such Ordinary Shares to the Investor on the 23rd Trading Day prior to the applicable Installment Date, with a true-up of shares
(if necessary) on the Installment Date. All amortization payments shall be subject to the Investors’ right to (a) defer
some or all of any Installment Payment to a subsequent Installment Date; and (b) at any time during an Installment Period, convert
up to four times the Installment Amount at the Installment Price.
Conversion
All
amounts due under the Notes are convertible at any time after the issuance date, in whole or in part (subject to rounding for
fractional shares), at the option of the holders into ordinary shares of the Company at a fixed conversion price, which is subject
to adjustment as summarized below. The Notes are initially convertible into ordinary shares of the Company at the initial price
of $6.50 per share. This conversion price is subject to adjustment for stock splits, combinations or similar events and “full
ratchet” anti-dilution provisions, among other adjustments.
Events
of Default
The
Notes contain customary events of default including but not limited to: (i) failure to register the Company’s ordinary shares
within specified time periods; (ii) failure to make payments when due under the Notes; and (iii) bankruptcy or insolvency of the
Company.
If
an event of default occurs, each holder may require the Company to redeem all or any portion of the Notes (including all accrued
and unpaid interest thereon), in cash, at a price equal to the greater of: (i) the product of (A) the Conversion Amount (as defined
in the Form of Note) multiplied by (B) a 120% redemption premium; and (ii) the product of (X) the Conversion Amount divided by
$6.50, subject to the adjustments specified in the Form of Note, multiplied by (Y) the product of (1) the 120% redemption premium
multiplied by (2) the greatest closing sale price of the Ordinary Shares of the Company on any trading day during the period commencing
on the date immediately preceding such event of default and ending on the date the Company makes the entire payment required to
be made.
At
any time after the occurrence of an event of default, each holder may elect to convert the notes using an “Alternate Conversion
Price” which shall be the lowest of (i) the applicable Conversion Price as in effect on the applicable conversion cate of
the applicable Alternate Conversion, (ii) the greater of (x) the Floor Price (currently $0.30) and (y) the lowest of (I) 80% of
the VWAP (as defined in the Note) of the Ordinary Shares as of the trading day immediately preceding the delivery or deemed delivery
of the applicable conversion notice, (iii) 85% of the VWAP of the Ordinary Shares as of the trading day of the delivery or deemed
delivery of the applicable conversion notice and (iv) 85% of the price computed as the quotient of (I) the sum of the VWAP of
the Ordinary Shares for each of the three (3) trading days with the lowest VWAP of the Ordinary Shares during the twenty (20)
consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the
applicable conversion notice, divided by (II) three (3).
Fundamental
Transactions
The
Notes prohibit the Company from entering into specified transactions involving a change of control, subject to specified exceptions
for a successor entity that assumes in writing the Company’s obligations concerning the Notes. In the event of specified
transactions involving a change of control, the holder of a Note will have the right to require us to redeem all or any portion
of the Note it holds (including all accrued and unpaid interest thereon) at a price equal to the Change in Control Redemption
Price (as defined in the Form of Note).
Limitations
on Conversion and Issuance
A
Note may not be converted and shares of common stock may not be issued under the Notes if, after giving effect to the conversion
or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the Company’s outstanding
ordinary shares. At each holder’s option, the note blocker may be raised or lowered to any other percentage not in excess
of 9.99% under the terms specified in the Form of Note.
The
preceding summaries of the Notes and terms related thereto are not complete and are qualified in their entirety by reference to
the full text of the Form of Note, which is attached as Exhibit 10.2 to this Form 6-K.
Reservation
of Shares
So
long as the Notes are outstanding, the Company is required to reserve at least 300% of the number of Ordinary Shares as necessary
to effect the conversion, including Installment Conversions, Alternate Conversions and Accelerations of all of the Notes at the
Alternate Conversion Price then in effect.
The
preceding summary of the Note is not complete and is qualified in its entirety by reference to the full text of the Form of Note,
the form of which is attached as Exhibit 10.2 to this Form 6-K.
III.
Registration Rights Agreement
The
Company entered into a Registration Rights Agreement with the Holders as of the date of Closing (the “Registration Rights
Agreement”). Pursuant to the terms of Registration Rights Agreement, the Company has agreed to file with the SEC an initial
Registration Statement on Form F-3 (or Form F-1 if F-3 is not available) covering the resale of all of the Registrable Securities,
provided that such initial Registration Statement shall register for resale at least the number of Ordinary Shares equal to 300%
of the maximum number of Conversion Shares issuable upon conversion of the Notes (using the Alternate Conversion Price) as of
the date such Registration Statement is initially filed with the SEC, with the filing of such initial Registration Statement to
occur by the earlier of the (A) 120th calendar day after the Closing Date and (B) 2nd Business Day after the date the
Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed
or will not be subject to further review.
If
the Company is unable to meet its filing and effectiveness deadlines under the Registration Rights Agreement as well as certain
other requirements relating to its Nasdaq Listing and current public information requirements, the Company may be required to
pay certain cash damages under the Registration Rights Agreement, with such damages equal to two percent (2.0%) of the applicable
investor(s) original principal amount stated in such Investor’s Note on the Closing Date. If the Company does not meet specified
obligations under the Registration Rights Agreement, an Event of Default under the Notes may occur. The preceding
summary of the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of
the Form of Registration Rights Agreement, which is attached as Exhibit 10.3 to this Form 6-K.
IV.
Notice of Failure to Satisfy a Continued Listing Rule or Standard.
On
September 5, 2019, Reebonz Holding Limited (the “Company”) issued a press release announcing that the Company has received
written notification from The Nasdaq Stock Market LLC that the Company did not meet the continued listing requirements of maintaining
a minimum Market Value of Publicly Held Shares for the Nasdaq Global Market, as set forth in the Nasdaq Listing Rule 5450(b)(3)(C)
because the market value of the Company’s publicly held ordinary shares for the last 30 consecutive business days was below
the minimum MVPHS requirement of US$15,000,000. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated
herein by reference.
Pursuant
to Rule 5810(c)(3)(D) of the Nasdaq Listing Rules, the Company has a compliance period of 180 calendar days, or until February
25, 2020 (the "Compliance Period"), to regain compliance with Nasdaq's minimum MVPHS requirement. If at any time during
the Compliance Period, the Company's MVPHS closes at US$15,000,000 or more for a minimum of ten consecutive business days, Nasdaq
will provide the Company a written confirmation of compliance and the matter will be closed.
During
the Compliance Period, the Company's ordinary shares will continue to be listed and trade on the Nasdaq Global Market.
V.
Exhibits
(1)
The agreements filed as exhibits to this Form 6-K contain representations and warranties made by the parties thereto. The assertions
embodied in such representations and warranties are not necessarily assertions of fact, but a mechanism for the parties to allocate
risk. Accordingly, investors should not rely on the representations and warranties as characterizations of the actual state of
facts or for any other purpose.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
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REEBONZ HOLDING LIMITED
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Date: September 5, 2019
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By:
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/s/ Nupur Sadiwala
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Nupur Sadiwala
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Chief Financial Officer
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