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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 28, 2022 

 

AIADVERTISING, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   000-13215   30-0050402

(State or other jurisdiction of
incorporation or organization)

  (Commission File Number)   IRS Employer
Identification No.)

 

321 Sixth Street

San Antonio, TX

  78215
(Address of Principal Executive Offices)     (Zip Code)

 

(805) 964-3313

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Tile of each class   Trading Symbol(s)   Name of each exchange on which registered
N/A   N/A   N/A

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

 

Emerging Growth Company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On March 28, 2022, AiAdvertising, Inc. (the “Company”) entered into a Purchase Agreement (the “Purchase Agreement”) with GHS Investments, LLC (“GHS”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to GHS, in its discretion, up to $10,000,000 of shares (“Purchase Shares”) of its common stock.

 

The Company has the right, in its sole discretion, subject to the conditions and limitations in the Purchase Agreement, to direct GHS, by delivery of a purchase notice from time to time (a “Purchase Notice”) to purchase (each, a “Purchase”) over the one-year term of the Purchase Agreement, a minimum of $10,000 and up to a maximum of the lower of: (1) one hundred percent (100%) of the average daily trading dollar volume of the Company’s common stock during the ten trading days preceding the Purchase Date; or (2) one million dollars ($1,000,000), provided that the parties may agree to waive such limitations. The aggregate value of Purchase Shares sold to GHS may not exceed $10,000,000. Each Purchase Notice will set forth the Purchase Price and number of Purchase Shares in accordance with the terms of the Purchase Agreement.

 

The number of Purchase Shares the Company issue under each Purchase will be equal to 112.5% of the Purchase Amount sold under such Purchase, divided by the Purchase Price per share (as defined under the Purchase Agreement). The Purchase Price is defined as the lower of (a) 90% of the lowest volume weighted average price during the Valuation Period; or (b) the closing price for the Company’s common stock on the trading day preceding the date of the Purchase Notice. The Purchase Price will be subject to a floor of $.01 per share, at or below which the Company will not deliver a Purchase Notice. The Valuation Period is the ten consecutive business days immediately preceding, but not including, the date a Purchase Notice is delivered.

 

The Purchase Agreement prohibits the Company from directing GHS to purchase any shares of common stock if those shares, when aggregated with all other shares of the Company’s common stock then beneficially owned by GHS and its affiliates, would result in GHS and its affiliates having beneficial ownership, at any single point in time, of more than 4.99% of the then total outstanding shares of the Company’s common stock.

 

There are no trading volume requirements or restrictions under the Purchase Agreement and the Company will control the timing and amount of any sales of its common stock to GHS.

  

So long as an event of default, as defined in the Purchase Agreement, (all of which are outside the control of GHS) has occurred and is continuing, the Company may not deliver a Purchase Notice to GHS.

 

The Purchase Agreement is for a term of twelve months but may terminate earlier on the date that all of the Purchase Shares are sold to GHS. The Company and GHS each have the right to terminate the Purchase Agreement at any time upon thirty days notice. In the event of bankruptcy proceedings by or against the Company, the Purchase Agreement will automatically terminate without action of any party.

 

The shares were offered, and will be issued, pursuant to the Prospectus Supplement, dated March 28, 2022, to the Prospectus included in the Company’s Registration Statement on Form S-3 (Registration No. 333-252358) filed with the Securities and Exchange Commission on January 22, 2021.

   

Sichenzia Ross Ference LLP, counsel to the Company, has issued an opinion to the Company regarding the validity of the shares of common stock to be issued under the Purchase Agreement. A copy of the opinion is filed as Exhibit 5.1 to this Current Report on Form 8-K.

 

The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the Purchase Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

 

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Item 9.01 Financial Statements and Exhibits.

 

Exhibit No.   Exhibit
5.1   Opinion of Sichenzia Ross Ference LLP
10.1   Purchase Agreement dated March 28, 2022
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  AIADVERTISING, INC.
     
Date: March 29, 2022 By: /s/ Andrew Van Noy
    Name:  Andrew Van Noy
    Title: Chief Executive Officer

 

 

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