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Item 1.01.
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Entry into a Material Definitive Agreement.
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Securities Purchase Agreement and Warrants
On April 20, 2021, SANUWAVE Health, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”), with Leviston Resources, LLC, an accredited
investor (the “Purchaser”) for the sale by the Company in a private placement (the “Private Placement”) of (i) the Company’s future advance convertible promissory note in an aggregate principal amount of up to $3,402,000 (the “Note”) and (ii) a
warrant to purchase an additional 16,666,667 shares of common stock of the Company (the “Warrant”). The Warrant has an exercise price of $0.18 per share and a four year term. The closing of the Private Placement occurred on April 20, 2021 (the
“Closing Date”).
The foregoing descriptions of the Purchase Agreement and the Warrant do not purport to be complete and are qualified in their entirety by reference to the full text of the
Purchase Agreement and the Warrant, which are filed as Exhibit 10.1 and Exhibit 4.1, respectively, and are incorporated herein by reference.
Note
As noted above, on April 20, 2021, the Company issued the Note to the Purchaser in an aggregate principal amount of up to $3,402,000 (the “Aggregate Amount”), which shall be advanced in
disbursements by the Purchaser (“Disbursements”), as set forth in the Note. On April 21, 2021, the Purchaser advanced a Disbursement of $750,000. Remaining Disbursements up to the Aggregate Amount shall be subject to the satisfaction of certain
terms and conditions set forth in the Note. Disbursements bear an interest at a rate of five percent (5%) per annum and have a maturity date of twelve (12) months from the date of issuance. The Note is convertible at the option of the holder into
shares of the Common Stock of the Company at a conversion price per share equal to the lesser of (i) $0.18, and (ii) ninety percent (90%) of the closing price for a share of Common Stock reported on the OTCQB on the effective date of the
Registration Statement (as defined below).
The Note contains customary events of default and covenants, including limitations on incurrences of indebtedness and liens.
Pursuant to the Purchase Agreement, the Company has agreed within a reasonable period of time following the Closing Date, and in any event prior to any Disbursement under the Note subsequent to the
initial Disbursement, to enter into a Security Agreement in favor of the Purchaser, securing the Company’s obligations under the Note.
The rights of the Purchaser to receive payments under the Note are subordinate to the rights of NH Expansion Credit Fund Holdings LP (“North Haven Expansion”) pursuant to a Subordination Agreement,
that the Company and the Purchaser entered into with North Haven Expansion on April 20, 2021, in connection with the Private Placement (the “Subordination Agreement”).
The foregoing descriptions of the Note and the Subordination Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Note and the
Subordination Agreement, which are filed as Exhibit 4.2 and Exhibit 10.2, respectively, and are incorporated herein by reference.
Registration Rights Agreement
In connection with the Purchase Agreement, the Company entered into a registration rights agreement with the Purchaser on April 20, 2021 (the “Registration Rights Agreement”)
pursuant to which the Company has agreed to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission no later than thirty (30) days following the Closing Date for the registration of 100% of the
maximum number of the Shares issuable upon conversion of the Note and exercise of the Warrants issued pursuant to the Purchase Agreement (the “Registrable Securities”). The Company shall use its best efforts to keep the Registration Statement
continuously effective under the Securities Act of 1933, as amended (the “Securities Act”), until all Registrable Securities have been sold, or may be sold without the requirement to be in compliance with Rule 144(c)(1) of the Securities Act and
otherwise without restriction or limitation pursuant to Rule 144 of the Securities Act, as determined by the counsel to the Company.
The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the
Registration Rights Agreement, which is filed hereto as Exhibits 10.3 and is incorporated herein by reference.