Item 1.01
.
Entry into a Material Definitive Agreement.
Demand Notes with Share Rights
:
On July 23, 2019, CurAegis Technologies, Inc. (the “Company) commenced a financing (the “Financing”), in connection with which the Company entered into a credit facility of up to $1,500,000 with M&T Bank and commenced an offering (the “Offering”) of up to 15,152,500 shares of the Company’s Common Stock. Each of the investors in the Offering and the Company, as co-borrowers, shall execute Demand Notes in favor of the lender, and the Company shall enter into a General Security Agreement, among other documents. Interest on the Demand Notes shall accrue at the lender’s prime rate, and, as demand notes, the lender may make demand for payment at any time. Purchases of the Company’s Common Stock in the Offering shall be pursuant to a Subscription Agreement. As of the date of this Current Report on Form 8-K, the Company has issued and sold 60,000 shares of the Company’s Common Stock and received aggregate proceeds of $200,000 in the Financing.
The shares of the Company’s Common Stock are being offered and sold in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933 (“Securities Act”), as amended, and Rule 506 of Regulation D as promulgated by the United States Securities and Exchange Commission thereunder. The shares of the Company’s Common Stock will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
This information set forth in this Current Report on Form 8-K is neither an offer to sell, nor a solicitation of an offer to buy, any shares of the Company’s Common Stock, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The description of the Financing above is only a summary and is subject to, and qualified in its entirety by reference to, the Subscription Agreement, a copy of which is attached as
Exhibit
10
.1
, the form of Demand Note, a copy of which is attached as
Exhibit 10.2
, and the General Security Agreement, a copy of which is attached as
Exhibit 10.3
, each of which are incorporated by reference in this Current Report on Form 8-K.
2019 Convertible Notes
The Company is currently offering up to $2.5 million aggregate principal amount of 6% Senior Convertible Promissory Notes and 750,000 shares of common stock (the “2019 Convertible Notes and Shares”) in a private placement. During the period from June 3, 2019 to July 25, 2019, the Company issued $350,000 aggregate principal amount of 6% Senior Convertible Promissory Notes, and 105,000 shares of common stock, in connection with the 2019 Convertible Notes and Shares.
This Current Report on Form 8K of the Company reports the July 25, 2019 investment made by William W. Destler, a director of the Company. On July 25, 2019, William W. Destler, a director of the Company, purchased $25,000 principal amount of the 6% Senior Convertible Promissory Notes and received the corresponding shares of common stock.
The 2019 Convertible Notes and Shares are included in a private placement exempt from registration under the Securities Act and Rule 506 thereunder. Each purchaser is an accredited investor. Such securities will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This report does not constitute an offer for the sale of any securities. The descriptions of the 2019 Convertible Notes and Shares, and the securities purchase agreement pursuant to which the 2019 Convertible Notes and Shares are offered, are qualified in their entirety by reference to Exhibits 4.1 and 4.2 hereto, which are incorporated by reference herein.