The terms related to interest, security, payments, conversion (including the conversion rate), rights of Chenel Capital upon a Fundamental Change (as defined in the Subsequently Purchased Convertible Note) and affirmative and negative covenants are the same as described under the heading “Convertible Notes Issuance” in the Company’s Current Report on Form 8-K filed with the SEC on November 24, 2023 (the “November 8-K”). Chenel Capital has agreed that the transactions currently contemplated by the Merger Agreement, including any filings required by Chenel Capital as a result of the Subsequent Financing, or any other person or persons with the SEC in connection with the Merger Agreement will not constitute a Fundamental Change (as defined in the Convertible Notes).
The Subsequently Purchased Convertible Note was not issued pursuant to an indenture. Unless the Company obtains the Requisite Stockholder Approvals (as defined in the Purchase Agreement), the Company will be prohibited from issuing any shares of Class A Common Stock upon conversion of the Subsequently Purchased Convertible Note if the issuance of such shares of Class A Common Stock, together with shares issued upon the conversion of any other Convertible Notes and exercise of any Warrants (as defined in the Purchase Agreement), would exceed 19.99% of the Company’s outstanding shares of Class A Common Stock as of the date of the Purchase Agreement or otherwise exceed the aggregate number of shares of Class A Common Stock which the Company may issue without breaching the Company’s obligations under the Nasdaq listing rules.
The Subsequent Financing is connected to the Company’s announcements in its November 8-K, its Current Report on Form 8-K, filed with the SEC on January 25, 2024 (the “January 8-K”), its Current Report on Form 8-K, filed with the SEC on March 1, 2024 (the “First March 8-K”), its Second March 8-K, its Current Report on Form 8-K, filed with the SEC on March 21, 2024 (the “Third March 8-K”), its Current Report on Form 8-K, filed with the SEC on April 26, 2024 (the “April 8-K”), its Current Report on Form 8-K, filed with the SEC on May 17, 2024 (the “May 8-K”) and its Current Report on Form 8-K, filed with the SEC on July 5, 2024 (the “July 8-K”), of a series of closings of previous financing transactions (the “Prior Financings”) with JMCM Holdings LLC (“JMCM”), MH Orbit LLC (“MH Orbit”), SherpaVentures Fund II, LP (“ACME Fund II”), Chris C. Kemp, through the Chris Kemp Living Trust dated February 10, 2021 (the “Kemp Trust”), Dr. Adam P. London, RBH Ventures Astra SPV, LLC (“RBH”), ERAS Capital, LLC (“ERAS”), Ulrich Gall, Richard Delmas Breezy Wynn and Astera Institute (“Astera” and collectively with JMCM, MH Orbit, ACME Fund II, the Kemp Trust, Dr. London, RBH, ERAS, Mr. Gall and Mr. Wynn, the “Initial Investors” and collectively with Chenel Capital, the “Investors”), pursuant to which the Company issued to the Initial Investors senior secured convertible notes (the “Existing Issued Convertible Notes”) substantially in the form of Senior Secured Convertible Note due 2025 filed as Exhibit 4.1 to the June 8-K, and warrants in accordance with the form of the Common Stock Purchase Warrant filed as Exhibit 4.2 to the November 8-K (the “Existing Issued Warrants” and together with the Subsequently Purchased Warrants, collectively, the “Warrants”). Such Prior Financings are discussed in the November 8-K, the January 8-K, the First March 8-K, the Second March 8-K, the Third March 8-K, the April 8-K, the May 8-K and the July 8-K.
The foregoing summary of the Subsequently Purchased Convertible Note does not purport to be complete and is qualified in its entirety by reference to the form of Senior Secured Convertible Note that was filed as Exhibit 4.1 to the June 8-K which is incorporated herein by reference.
No Registration; Registration Rights
The Subsequently Purchased Convertible Note and the Underlying Shares have not been, and the Subsequently Purchased Convertible Note will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”) or the securities laws of any other jurisdiction. The Subsequently Purchased Convertible Note and the Underlying Shares may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and any applicable state securities laws. The Subsequently Purchased Convertible Note was offered and sold to Chenel Capital in a transaction exempt from registration under the Securities Act in reliance on Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder. Chenel Capital is an “accredited investor,” as defined in Regulation D, and acquired the Subsequently Purchased Convertible Note and any Underlying Shares for investment only and not with a view toward, or for resale in connection with, the public sale or distribution thereof.