Item 1.01 |
Entry into a Material
Definitive Agreement |
On
January 6, 2023, Cryptyde, Inc. (the “Company”) entered into a Second Amendment Agreement (the “Amendment Agreement”)
with an accredited investor (the “Investor”) to amend (i) that certain Securities Purchase Agreement dated as of January
26, 2022, as previously amended on July 28, 2022, by and between the Company and the Investor (the “SPA”), (ii) that certain
Senior Secured Convertible Note, as previously amended on July 28, 2022 (the “Note”), issued pursuant to the SPA, (iii) that
certain Registration Rights Agreement dated as of January 26, 2022, as previously amended on July 28, 2022, by and between the Company
and the Investor (the “RRA”), and (iv) those certain warrants to purchase shares of the Company’s common stock (“Common
Stock”) issued to the Investor pursuant to the SPA, as previously amended on July 28, 2022 (the “Warrants”).
Pursuant
to the Amendment Agreement, the conversion price of balance of the Note that remains outstanding will be voluntarily adjusted to $0.20
per share of Common Stock.
The
Amendment Agreement grants the Company the right to redeem all or a portion of the outstanding amount of the Note (the “Redemption
Right”) upon 10 trading days’ notice provided that (i) no Equity Conditions Failure (as defined in the Note) exists and (ii)
the Company has sufficient resources to effect the redemption. The Redemption Right is subject to certain other restrictions contained
in the Amendment Agreement.
The
Amendment Agreement provides that if the Investor converts any portion of the Note during the 10 consecutive trading day period starting
on January 6, 2023 (the “Applicable Conversion Period”), the Investor shall, on the first business day immediately following
the end of the Applicable Conversion Period, release to the Company an amount of cash from the Control Account (as defined in the Note)
equal to 20% of the amount converted during the Applicable Conversion Period if the volume-weighted average price (“VWAP”)
of the Common Stock on each trading day during the Applicable Conversion Period equals or exceeds $0.20 and there is no circumstance
or event that would, with or without the passage of time or the giving of notice, result in a material default, material breach or event
of default under any Transaction Document (as defined in the SPA).
As
a result of the voluntary adjustment to the conversion price of the Note, the exercise price of the Warrants were automatically adjusted
to $0.20 per share of Common Stock and the number of shares issuable upon exercise of the Warrants (the “Warrant Shares”)
was proportionately increased to 166,666,650 Warrant Shares. Pursuant to the Amendment Agreement, the Investor agreed to waive the adjustment
to the number of Warrant Shares issuable pursuant to the Warrant to the extent such adjustment results in a number of Warrant Shares
underlying the Warrant exceeding 111,000,000. The Amendment Agreement provides that the Investor (i) will not exercise Warrants
to purchase more than an aggregate of 75,000,000 Warrant Shares until March 2, 2023, provided such limitation will be waived upon
the occurrence of an Event of Default (as defined in the Note) or if the VWAP of the Common Stock on any trading day from January 6,
2023 until March 2, 2023 is less than $0.22 and (ii) will not exercise any Warrants until (x) such time as the aggregate principal amount
outstanding of the Note is equal to or less than the amount remaining in the Control Account or (y) the occurrence of an Event of Default
(the “Investor Initial Exercisability Date”). However, the Investor may exercise Warrants for up to 10,000,000 shares of
Common Stock prior to the Investor Initial Exercisability Date if the VWAP of the Common Stock on any trading day during the period starting
on March 1, 2023 and ending on and including March 31, 2023 is less than $0.20. If the VWAP of the Common Stock on each trading day
from January 6, 2023 through March 1, 2023, is greater than $0.22, the Investor will forfeit Warrants to purchase 36,000,000 Warrant
Shares provided that there is no circumstance or event that would, with or without the passage of time or the giving of notice, result
in a material default, material breach or event of default under any Transaction Document. Additionally, the exercise price of the Warrants
will be voluntarily adjusted to $0.001 per share of Common Stock.
The
Amendment Agreement requires the Company to provide each stockholder entitled to vote at the next special or annual meeting of stockholders
of the Company, which must be held not later than April 1, 2023, a proxy statement soliciting each such stockholder’s affirmative
vote at the stockholder meeting for approving the increase of the authorized shares of Common Stock from 250,000,000 to 500,000,000 (such
affirmative approval being referred to herein as the “Stockholder Approval” and the date the Stockholder Approval is obtained
is referred to herein as the “Stockholder Approval Date”). If despite the Company’s reasonable best efforts the Stockholder
Approval is not obtained on or prior to the Stockholder Meeting Deadline, the Company shall cause an additional stockholder meeting to
be held every ninety (90) days thereafter until such Stockholder Approval is obtained.
The
Amendment Agreement requires the Company to enter into a waiver agreement (the “Waiver Agreement”) with BHP Capital NY, Inc.
(“BHP”). Pursuant to the Amendment Agreement, the Waiver Agreement must limit (i) limit the number of shares of Common Stock
issuable upon exercise of the warrant (“BHP Warrant Shares”) to purchase Common Stock (the “BHP Warrant”) as
a result of certain anti-dilution protections contained in the BHP Warrant to 40,000,000 BHP Warrant Shares; provided, however, that
upon the Investor’s forfeiture of 36,000,000 Warrant Shares, BHP will forfeit 12,972,000 shares of Common Stock issuable upon exercise
of the BHP Warrant, and (ii) waive any right to exercise the BHP Warrant prior to such time as the cash in the Control Account (as defined
in the Note) equals or exceeds the outstanding principal amount of the Note (the “BHP Initial Exercisability Date”). However,
BHP may exercise the BHP Warrant for up to 3,600,000 shares of Common Stock prior to the BHP Initial Exercisability Date if the VWAP
of the Common Stock on any trading day during the period starting on March 1, 2023 and ending on and including March 31, 2023 is less
than $0.20. On January 6, 2023, the Company entered into the Waiver Agreement with BHP.
The
Waiver Agreement prohibits the BHP from exercising BHP Warrants to purchase more than 27,028,000 BHP Warrant Shares until March 2, 2023
unless the VWAP of the Common Stock on any trading date occurring from January 6, 2023 until March 2, 2023 is less than $0.22.
If the VWAP of the Common Stock on each trading day from January 6, 2023 through March 1, 2023, is greater than $0.22, BHP will forfeit
BHP Warrants to purchase 12,972,000 BHP Warrant Shares.
The
foregoing description of the Amendment Agreement and the Waiver Agreement does not purport to be complete and is qualified in its entirety
to the complete text of the Amendment Agreement and Waiver Agreement, copies of are filed as Exhibits 10.1 and 10.2, respectively, to
this Current Report on Form 8-K and is incorporated by reference herein.