HPCO Hempacco Company Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

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): December 19, 2023

(619) 779-0715

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

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:

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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.

Background

As disclosed in the Current Report on Form 8-K of Hempacco Co., Inc. (the “Company”) filed on October 25, 2023, and in the Company’s Definitive Information Statement filed on November 8, 2023, on October 19, 2023, the Company entered into the first of several securities purchase agreements for the sale of, in the aggregate (the “Financing Transactions”), (i) up to $3,000,000 in convertible promissory notes (the “Notes”), (ii) warrants to purchase up to 1,300,000 shares of common stock (the “Warrants”), and (iii) up to 300,000 shares of common stock (the “Shares”). The Notes, Warrants, and Shares are being offered and sold in reliance upon exemptions from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

On October 19, 2023, the Company entered into the first securities purchase agreement as part of the Financing Transactions, pursuant to which the Company sold to FirstFire Global Opportunities Fund, LLC, a Delaware limited liability company (“FirstFire”), (i) a convertible promissory note in the principal amount of $277,777.78, (ii) warrants to purchase 120,370 shares of Common Stock, and (iii) 27,777 shares of Common Stock, for an aggregate purchase price of $250,000, and the Company granted FirstFire certain registration rights pursuant to a registration rights agreement with FirstFire.

Additional Tranche of Funding

Effective December 19, 2023, the Company, as part of the Financing Transactions, entered into another securities purchase agreement (the “FirstFire SPA”) with FirstFire, pursuant to which the Company sold to FirstFire (i) another convertible promissory note in the principal amount of $277,777.78 (the “FirstFire Note”), (ii) additional warrants to purchase 120,370 shares of Company common stock (the “FirstFire Warrants”), and (iii) 27,777 additional shares of Company common stock (the “FirstFire Shares”), for an aggregate purchase price of $250,000 (the “Second FirstFire Transaction”), and the Company entered into another registration rights agreement with FirstFire (the “FirstFire RRA”).

The Second FirstFire Transaction closed on December 19, 2023, and on such date pursuant to the FirstFire SPA, FirstFire’s legal expenses of $2,500 were paid from the gross purchase price, the Company’s broker-dealers in connection with the transaction were paid $20,000 from the gross purchase price, the Company receiving net funding of $227,500, and the FirstFire Note, FirstFire Warrants, and FirstFire Shares were issued to FirstFire. 

The FirstFire SPA includes customary representations, warranties and covenants by the Company and customary closing conditions. The FirstFire SPA requires that the proceeds from the Financing Transactions first be used for the fulfillment of purchase order No. 213420187, and then for business development and operating capital only, but not for repayment of indebtedness owed to officers, directors or employees of the Company or their affiliates, the repayment of any debt issued in corporate finance transactions, any loan to or investment in any other corporation, partnership, enterprise or other person (except in connection with the Company’s currently existing operations), or any loan, credit, or advance to any officers, directors, employees, or affiliates of the Company.

The FirstFire RRA requires the Company to file with the SEC a registration statement registering for resale by FirstFire the shares of Company common stock issued or issuable to it under the Financing Transactions within 90 days of closing, and have such registration statement effective within 120 days.

The FirstFire Note matures 12 months following the issue date, accrues guaranteed interest of 10% per annum (with the first 12 months of interest guaranteed and earned in full as of issuance of the note), is unsecured, and is generally required to be repaid 1/6^th each month ($46,300/month) beginning 4 months after closing. The FirstFire Note is convertible into shares of the Company’s common stock at the election of the holder at a conversion price equal to $1.50/share subject to adjustment as provided in the FirstFire Note (the “Conversion Price”). The Conversion Price shall be adjusted if an Event of Default (as such term is defined in the FirstFire Note, and including any failure to pay monthly amortization payments as required by the FirstFire Note) has occurred, in which case the Conversion Price shall mean the lesser of (i) 75% of $1.50/share (which percentage shall be reduced by 10% for each 30 calendar day period that passes after the Event of Default, but shall not be reduced lower than 50%), or (ii) 90% of the lowest VWAP (as defined in the FirstFire Note) on any Trading Day (as defined in the FirstFire Note) during the 5 Trading Days prior to the conversion date (which percentage shall be reduced to 87.5% if the Company has failed to make a required monthly amortization payment); provided, however, that the holder may not convert the FirstFire Note to the extent that such conversion would result in the holder’s beneficial ownership of the Company’s common stock being in excess of 4.99% of the Company’s issued and outstanding common stock. Additionally, the holder is entitled to deduct $1,750 from the conversion amount in each note conversion to cover the holder’s fees associated with the conversion, provided that the gross conversion amount in that conversion is at least $25,000. 

The FirstFire Warrants have a 5-year term, are exercisable on a cashless basis, and have an exercise price of $1.50, subject to adjustment as provided in the FirstFire Warrants.

The foregoing descriptions of the FirstFire SPA, FirstFire RRA, FirstFire Notes, and FirstFire Warrants do not purport to be complete and are qualified in their entirety by reference to the full text of those agreements, copies of which are filed as Exhibits 10.1-10.4, respectively, to this Current Report on Form 8-K and incorporated by reference herein.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure provided above in Item 1.01 above is incorporated by reference into this Item 2.03.

Item 3.02. Unregistered Sales of Equity Securities.

The disclosure provided above in Item 1.01 above is incorporated by reference into this Item 3.02. The FirstFire Note, FirstFire Warrants, and FirstFire Shares were sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, as there was no general solicitation, the purchaser was accredited, and the sale did not involve a public offering.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

* Filed herewith.

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, hereunder duly authorized.

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