|
Item 1.01
|
Entry into a Material Definitive Agreement
|
On June 28, 2019, BioHiTech Global, Inc.
(the “Registrant”) completed a private placement for $1,885,000 in Units. The Registrant received gross proceeds of
$1,885,000 from the sale of Units on June 28, 2019 and on May 10, 2019, from twenty four (24) investors.
Commencing on May 10, 2019, BioHiTech Global,
Inc. (the “Registrant”) entered into a series of Investor Subscription Agreements with certain accredited investors
(the “Investors”), pursuant to which the Registrant agreed to sell and the Investors agreed to purchase in a private
placement offering units (the “Units”) in the aggregate offering amount of $1,885,000. Each Unit, which may be offered
in fractions, amount of $100,000, is comprised of 1,000 Shares of the Registrant’s Series D Convertible Preferred Stock (the
“Series D Preferred Shares”) and warrants (the “Warrants”) to purchase a number of shares of the Company’s
common stock, $0.0001 par value per share (the “Common Stock”), up to such 50% of the number of shares of Common Stock
issuable upon conversion of the Series D Preferred Share at an exercise price of $3.50 per share of Common Stock.
Each share of Series D Preferred Shares
have a stated value of $100.00, and is convertible into shares of Common Stock at the price of $3.50 per share based on the stated
value of the Series D Preferred being converted. The Series D Preferred Shares has usual dividends at the rate of 9% payable annually
in arrears in cash or, at the Company’s option, in Common Stock based upon the then in effect conversion price. The Series
D Preferred Shares also have an alternative dividend provision based upon the cash flow distributed to the parent from the Company’s
next HEBioT facility, excluding the Company’s plant in Martinsburg, West Virginia, (“the Next Facility”) based
upon the Series D Preferred Shares proportional investment in the facility. The Series D Preferred Shares also has an alternative
conversion based upon a multiple of the annualized EBITDA of the Next Facility converted at the higher of the conversion rate in
effect or the market price of the Company’s common stock if higher.
The Units, the Series D Preferred Shares
and the Warrants were offered and sold without registration under the Securities Act of 1933, as amended (the “Securities
Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as provided in Rule 506(b) of Regulation
D promulgated thereunder. The Units, the Series D Preferred Shares and the Warrants and the Common Stock issuable upon conversion
of the Series D Preferred Shares and the Warrants have not been registered under the Securities Act or any other applicable securities
laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration
requirements of the Securities Act.
The Registrant paid placement agent fees
of $93,500 and $15,000 in cash to Network 1 Financial Securities, Inc. and ViewTrade Securities Inc., respectively.
The foregoing description of the terms
and conditions of the Investor Subscription Agreement, the Warrants and the Certificate of Designation is only a summary and is
qualified in its entirety by the full text of the Investor Subscription Agreement, the Warrants, the Certificate of Designation,
and the Certificate of Amendment of Designation, which have been filed as Exhibits 10.25, 10.26, 4.8 and 4.9 to the Registrant’s
Quarterly Report on Form 10-Q filed on May 15, 2019.
This Current Report on Form 8-K contains
forward-looking statements that involve risks and uncertainties. The risks and uncertainties involved include the dilution to
current stockholders as a result of the potential purchase price discount offered to the Investor, and the market overhang of
shares available for sale that may develop as a result of the subsequent sale by the Investor of the shares of Common Stock underlying
the Series D Preferred Shares and the Warrants, as well as other risks detailed from time to time in the Registrant’s periodic
filings with the Securities and Exchange Commission.