SECURITIES AND EXCHANGE COMMISSION
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 21, 2023
TOUGHBUILT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction | | | | (IRS Employer
Identification No.) |
8669 Research Drive, Irvine, CA | | | | |
(Address of principal executive offices) | | | | |
Registrant’s telephone number, including area code:
(949) 528-3100
(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 (
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:
| | | | Name of each exchange on which
registered: |
| | | | The Nasdaq Stock Exchange, LLC |
| | | | The Nasdaq Stock Exchange, LLC |
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).
x
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 3.03. Material Modification to Rights of Security Holders.
The disclosure set forth in Item 5.03 below is hereby incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On
September 21, 2023,
the board of directors (the “
”) of
ToughBuilt Industries, Inc. a Nevada corporation (the “
”),
declared
a
dividend
of
one
one-thousandth (0.001) of
a
share
of
Series H
Preferred
Stock,
par
value
$0.0001
per
share
(“
”),
for
each
outstanding
share
of
the Company’s
c
ommon stock,
par
value
$0.0001
per
share
(“
”)
to
stockholders
of
record
at
5:00 p.m. Eastern Time on October 2, 2023 (the “
”).
On September 2
1
, 2023, the Company filed a certificate of designation (the “
Certificate of Designation
”) with the Nevada Secretary of State therein establishing the Series H Preferred Stock and describing the rights, obligations and privileges of the Series H Preferred Stock. The
following description
of
the Series H
Preferred Stock does
not purport to be complete and is
qualified in its
entirety by reference to
the
Certificate
of
Designation,
which
is
filed
as
Exhibit
3.1
to
this
Current
Report
and
is
incorporated
herein
by
reference.
. The Series H Preferred Stock consists of 50,000 shares. Each share of Series H Preferred Stock has a par value of $0.0001 per share. Shares of Series H Preferred Stock will be uncertificated and represented in book-entry form. The Series H Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series H Preferred Stock has no stated maturity and is not subject to any sinking fund.
. The holders of Series H Preferred Stock, as such, will not be entitled to receive dividends of any kind.
Except as otherwise provided by the Company’s Amended and Restated Articles of Incorporation or bylaws or required by law, the holders of shares of Series H Preferred Stock shall have the following voting rights:
Each share of Series H Preferred Stock will entitle the holder thereof to 1,000,000 votes per share (and, for the avoidance of doubt, each fraction of a share of Series H Preferred Stock will have a ratable number of votes). Thus, each one-thousandth of a share of Series H Preferred Stock would entitle the holder thereof to 1,000 votes. The outstanding shares of Series H Preferred Stock will vote together with the outstanding shares of Common Stock of the Company as a single class exclusively with respect to (i) any proposal to adopt an amendment to the Company’s Amended and Restated Articles of Incorporation, as amended (the “
Articles of Incorporation
”), to reclassify the outstanding shares of Common Stock into a smaller number of shares of Common Stock at a ratio specified in or determined in accordance with the terms of such amendment (the “
”) and (ii) any proposal to adjourn any meeting of shareholders called for the purpose of voting on Reverse Stock Split (the “
”). The Series H Preferred Stock will not be entitled to vote on any other matter, except to the extent required under the Nevada Revised Statutes.
Unless otherwise provided on any applicable proxy or ballot with respect to the voting on the Reverse Stock Split or the Adjournment Proposal, the vote of each share of Series H Preferred Stock (or fraction thereof) entitled to vote on the Reverse Stock Split, the Adjournment Proposal or any other matter brought before any meeting of stockholders held to vote on the Reverse Stock Split, the Adjournment Proposal shall be cast in the same manner as the vote, if any, of the share of Common Stock (or fraction thereof) in respect of which such share of Series H Preferred Stock (or fraction thereof) was issued as a dividend is cast on the Reverse Stock Split, the Adjournment Proposal or such other matter, as applicable, and the proxy or ballot with respect to shares of Common Stock held by any holder on whose behalf such proxy or ballot is submitted will be deemed to include all shares of Series H Preferred Stock (or fraction thereof) held by such holder. Notwithstanding the foregoing, and for the avoidance of doubt, each share of Series H Preferred Stock (or fraction thereof) redeemed pursuant to the Initial Redemption (as defined below) shall have no voting power with respect to, and the holder of each share of Series H Preferred Stock (or fraction thereof) redeemed pursuant to the Initial Redemption shall have no voting power with respect to any such share of Series H Preferred Stock (or fraction thereof) on, the Reverse Stock Split or the Adjournment Proposal or any other matter brought before any meeting of shareholders held to vote on the Reverse Stock Split. Holders of Series H Preferred Stock will not receive a separate ballot or proxy to cast votes with respect to the Series H Preferred Stock on the Reverse Stock Split, the Adjournment Proposal or any other matter brought before any meeting of stockholders held to vote on the Reverse Stock Split.
.
No shares of
Series H Preferred
Stock may be transferred by the holder thereof except in connection with a transfer by such holder
of
any
shares
of
Common Stock
held
by
such
holder,
in
which
case
a
number
of
one
one-thousandths
(1/1,000)
of
a
share
of
Series H
Preferred
Stock
equal
to
the
number
of
shares
of
Common Stock
to
be
transferred
by
such
holder
will
be
automatically
transferred
to
the
transferee
of
such
shares
of
Common Stock.
.
All
shares
of
Series H
Preferred
Stock
that
are
not
present
in
person
or
by
proxy
at
any
meeting
of
stockholders
held
to
vote
on
the Reverse Stock Split
and
the
Adjournment
Proposal
as
of
immediately
prior
to
the
opening
of
the
polls
at
such
meeting
(the
“
”) will automatically be redeemed in whole, but not
in
part,
by
the
Company
at
the
Initial
Redemption
Time
without
further
action
on
the
part
of
the
Company
or
the
holder
of
shares
of
Series H
Preferred
Stock
(the
“
”).
Any outstanding shares of Series H Preferred Stock that have not been redeemed pursuant to an Initial Redemption shall be redeemed in whole, but not in part, (i) if such redemption is ordered by the Board in its sole discretion, automatically and effective on such time and date specified by the Board in its sole discretion or (ii) automatically upon the approval by the Company’s shareholders of the Reverse Stock Split at any meeting of the shareholders held for the purpose of voting on such proposal (the “
” and, together with the Initial Redemption, the “
” and each a “
”).
Each share of Series H Preferred Stock redeemed in any Redemption shall be redeemed in consideration for the right to receive an amount equal to One Cent ($0.01) in cash for each hundred (100) whole shares of Series H Preferred Stock that are “beneficially owned” by the “beneficial owner” (as such terms are defined below) thereof as of the applicable Redemption Time and redeemed pursuant to such Redemption, payable upon receipt by the Company of a written request submitted by the applicable holder to the corporate secretary of the Company (each a “
Redemption Payment Request
”) following the applicable Redemption Time. Such Redemption Payment Request shall (i) be in a form reasonably acceptable to the Company, (ii) set forth in reasonable detail the number of shares of Series H Preferred Stock beneficially owned by the holder at the applicable Redemption Time and include evidence reasonably satisfactory to the Company regarding the same, and (iii) set forth a calculation specifying the amount in cash owed to such Holder by the Company with respect to the shares of Series H Preferred Stock that were redeemed at the applicable Redemption Time. For the avoidance of doubt, the redemption consideration in respect of the shares of Series H Preferred Stock (or fractions thereof) redeemed in any Redemption: : (x) shall entitle the former beneficial owners of less than hundred (100) whole shares of Series H Preferred Stock redeemed in any Redemption to no cash payment in respect thereof and (y) shall, in the case of a former beneficial owner of a number of shares of Series H Preferred Stock (or fractions thereof) redeemed pursuant to any Redemption that is not equal to a whole number that is a multiple of one hundred (100), entitle such beneficial owner to the same cash payment, if any, in respect of such Redemption as would have been payable in such Redemption to such beneficial owner if the number of shares (or fractions thereof) beneficially owned by such beneficial owner and redeemed pursuant to such Redemption were rounded down to the nearest whole number that is a multiple of one hundred (100) (such, that for example, the former beneficial owner of one hundred and fifteen (115) shares of Series H Preferred Stock redeemed pursuant to any Redemption shall be entitled to receive the same cash payment in respect of such Redemption as would have been payable to the former beneficial owner of one hundred (100) shares of Series H Preferred Stock redeemed pursuant to such Redemption). As used herein, “
Person
” shall mean any individual, firm, corporation, partnership, limited liability company, trust, or other entity, and shall include any successor (by merger or otherwise) to such entity. As used herein, a Person shall be deemed the “
beneficial owner
” of, and shall be deemed to “
beneficially own
,” any securities which such Person is deemed to beneficially own, directly or indirectly, within the meaning of Rule l3d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended.
From and after the time at which any shares of Series H Preferred Stock are called for redemption (whether automatically or otherwise), such shares of Series H Preferred Stock shall cease to be outstanding, and the only right of the former holders of such shares of Series H Preferred Stock, as such, will be to receive the applicable redemption price, if any. The shares of Series H Preferred Stock redeemed by the shall not be reissued as shares of Series H Preferred Stock and the Company shall take all action necessary to restore such shares to the status of authorized but unissued shares of Preferred Stock. Notwithstanding anything to the contrary herein or otherwise, and for the avoidance of doubt, any shares of Series H Preferred Stock (or fraction thereof) that have been redeemed pursuant to an Initial Redemption shall not be deemed to be outstanding for the purpose of voting or determining the number of votes entitled to vote on any matter submitted to shareholders (including the Reverse Stock Split or any other matter brought before any meeting of shareholders held to vote on the Reverse Stock Split) from and after the time of the Initial Redemption. Notice of any meeting of shareholders for the submission to shareholders of any proposal to approve the Reverse Stock Split shall constitute notice of a redemption of shares of Series H Preferred Stock pursuant to an Initial Redemption and result in the automatic redemption of the applicable shares of Series H Preferred Stock (and/or fractions thereof) pursuant to the Initial Redemption at the Initial Redemption Time. Notice by the Company of the shareholders’ approval of the Reverse Stock Split, by filing of any press release or through a Current Report on Form 8-K with the Securities and Exchange Commission, shall constitute a notice of a redemption of shares of Series H Preferred Stock pursuant to a Subsequent Redemption and result in the automatic redemption of the applicable shares of Series H Preferred Stock (and/or fractions thereof) pursuant to the Subsequent Redemption at the Subsequent Redemption Time. In connection with the filing of the Certificate of Designation, the Company has set apart funds for payment for the redemption of all shares of Series H Preferred Stock pursuant to the Redemptions and shall continue to keep such funds apart for such payment through the payment of the purchase price for the redemption of all such shares.
.
The
Series H
Preferred
Stock
will
rank
senior
to
the
Common Stock
as
to
any
distribution
of
assets
upon
a
liquidation,
dissolution
or
winding
up
of
the
Company,
whether
voluntarily
or
involuntarily
(a
“
”).
Upon
any
Dissolution,
each
holder
of
outstanding
shares
of
Series H
Preferred
Stock
will
be
entitled
to
be
paid
out
of
the
assets
of
the
Company available
for distribution to stockholders, prior and in preference
to any distribution to the holders of
Common Stock, an
amount
in
cash
equal
to
$0.01
per
outstanding
share
of
Series H
Preferred
Stock
. The Series H Preferred Stock may be issued in whole shares or in any fraction of a share that is one one-thousandth (1/1,000
th
) of a share or any integral multiple of such fraction, which fractions shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, participate in distributions upon a Dissolution and have the benefit of any other rights of holders of Series H Preferred Stock.
Item 7.01. Regulation FD Disclosure.
On September 21, 2023, the
Company issued a press release announcing the
Series H Preferred
Stock dividend. copy of that press release is furnished as Exhibit 99.1 to this Current Report and incorporated herein by reference.
Exhibit
99.1,
which
is
incorporated
into
this
Item 7.01, is being furnished pursuant to
Item 7.01 and shall not be deemed “filed” for the purposes of
Section 18 of the
Exchange
Act,
or
otherwise
subject
to
the
liabilities
of
that
section,
nor
shall
it
be
deemed
incorporated
by
reference
in
any
filing
under
the
Securities
Exchange
Act
of
1934,
as amended,
or
the
Securities
Act
of
1933,
as amended,
except
as shall
be
expressly
set
forth
by
reference
in
such
a
filing.
Item 9.01. Financial Statements and Exhibits
.
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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 hereunto duly authorized.
| TOUGHBUILT INDUSTRIES, INC. |
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Exhibit 99.1
ToughBuilt Industries Announces Distribution of
Series H Preferred Stock to Holders of its Common Stock
IRVINE, CA, September 21, 2023 - ToughBuilt Industries Inc. (NASDAQ: TBLT; TBLTW) (“ToughBuilt” or the “Company”) today announced that its Board of Directors declared a dividend of one one-thousandth of a share of newly-designated Series H Preferred Stock, par value $0.0001 per share, for each outstanding share of ToughBuilt common stock held of record as of 5:00 p.m. Eastern Time on October 2, 2023. The shares of Series H Preferred Stock will be distributed to such recipients at 5:00 p.m. Eastern Time on October 17, 2023. The outstanding shares of Series H Preferred Stock will vote together with the outstanding shares of the Company’s common stock, as a single class, exclusively with respect to a proposal giving the Board of Directors the authority, as it determines appropriate, to implement a reverse stock split, as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the reverse stock split, and will not be entitled to vote on any other matter, except to the extent required under the Nevada Revised Statutes. Subject to certain limitations, each outstanding share of Series H Preferred Stock will have 1,000,000 votes per share (or 1,000 votes per one one-thousandth (0.001) of a share of Series H Preferred Stock).
All shares of Series H Preferred Stock that are not present in person or by proxy at the meeting of stockholders held to vote on the above described proposals as of immediately prior to the opening of the polls at such meeting will automatically be redeemed by the Company. Any outstanding shares of Series H Preferred Stock that have not been so redeemed will be redeemed if such redemption is ordered by ToughBuilt’s Board of Directors or automatically upon the approval by ToughBuilt’s stockholders of the above described proposals.
The Series H Preferred Stock will be uncertificated, and no shares of Series H Preferred Stock will be transferable by any holder thereof except in connection with a transfer by such holder of any shares of the Company’s common stock held by such holder. In that case, a number of one one-thousandths of a share of Series H Preferred Stock equal to the number of shares of ToughBuilt’s common stock to be transferred by such holder would be transferred to the transferee of such shares of common stock.
Further details regarding the Series H Preferred Stock will be contained in a report on Form 8-K to be filed by ToughBuilt with the Securities and Exchange Commission.
ABOUT TOUGHBUILT INDUSTRIES, INC.
ToughBuilt is an advanced product design, manufacturer, and distributor with emphasis on innovative products. Currently focused on tools and other accessories for the professional and do-it-yourself construction industries. We market and distribute various home improvement and construction product lines for both the do-it-yourself and professional markets under the TOUGHBUILT brand name, within the global multibillion dollar per year tool market industry. All our products are designed by our in-house design team. Since launching product sales in 2013, we have experienced significant annual sales growth. Our current product line includes three major categories, with several additional categories in various stages of development, consisting of Soft Goods & Kneepads and Sawhorses & Work Products. Our mission is to provide products to the building and home improvement communities that are innovative, of superior quality derived in part from enlightened creativity for our end users while enhancing performance, improving well-being and building high brand loyalty. Additional information about the Company is available at: https://www.toughbuilt.com/.
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) the impact of the worldwide COVID-19 pandemic and government actions, on our business, (ii) supply chain disruptions, (iii) inflationary and interest rate concerns and the impact on consumers, (iv) cybersecurity breaches and threats, (v) market acceptance of our existing and new products, (vi) delays in bringing products to key markets; (vii) an inability to secure regulatory approvals for the ability to sell our products in certain markets, (viii) intense competition in our industry from much larger, multinational companies, (ix) product liability claims, (x) product malfunctions, (xi) our limited manufacturing capabilities and reliance on subcontractors for assistance, (xii) our efforts to successfully obtain and maintain intellectual property protection covering our products or defend ourselves from third parties’ infringement claims, (xiii) our reliance on a single supplier for certain product components, (xiv) the fact that we will need to raise additional capital to meet our business requirements in the future and that such capital raising may be costly, dilutive or difficult to obtain and (xv) the fact that we conduct business in multiple foreign jurisdictions, exposing us to tariffs, foreign currency exchange rate fluctuations, logistical and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction and (xvi) changes in e-commerce marketplaces. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. The Company encourages you to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements contained in this press release. As a result of these matters, changes in fact, assumptions not being realized or other circumstances, the Company's actual results may differ materially from the expected results discussed in the forward-looking statements contained in this press release. The forward-looking statements made in this press release are made only as of the date of this press release, and the Company undertakes no obligation to update them to reflect subsequent events or circumstances.
Investor Relations Contact:
KCSA Strategic Communications
David Hanover
toughbuilt@kcsa.com
Source: ToughBuilt Industries, Inc