Item 3.02
Unregistered Sales of Equity Securities
On January 29, 2019, Summer Energy Holdings, Inc. (the “
Company
”) entered into a Securities Purchase Agreement and accepted a subscription from an unrelated third party accredited investor to purchase 1,000,000 shares of the Company’s common stock (the “
Common Stock
”) at a price of $1.50 per share for a total purchase price of $1,500,000.
On February 8, 2019, the Company entered into a Securities Purchase Agreement and accepted a subscription from another unrelated third party accredited investor to purchase 1,000,000 shares of Common Stock at a price of $1.50 per share for a total purchase price of $1,500,000. The sale of these shares of Common Stock, together with the shares of Common Stock sold on January 29, 2019, triggered the Company’s obligation to file a Current Report on Form 8-K pursuant to item 3.02.
On February 11, 2019, the Company entered into Securities Purchase Agreements and accepted subscriptions from two additional unrelated third party accredited investors to purchase a total of 1,135,000 shares of Common Stock at a price of $1.50 per share for a total purchase price of $1,702,500
The Company intends to use the proceeds from the foregoing sales of Common Stock for general corporate and working capital purposes.
Contemporaneous with the execution of the aforementioned Securities Purchase Agreements, the Company and the four investors entered into separate Registration Rights Agreements (“
RRAs
”). Pursuant to the terms of the RRAs, the Company has agreed to provide certain piggyback registration rights regarding the purchased shares under the Securities Act of 1933, as amended (the “
Securities Act
”), and the rules and regulations promulgated thereunder, and applicable state securities laws.
The offerings of the securities offered and sold by the Company to the investors were not registered under the Securities Act. The shares of Common Stock sold to the investors were restricted securities and may not be offered or re-sold in the United States by the investors absent registration or an applicable exemption from registration requirements.
The sales of the shares of Common Stock under the Securities Purchase Agreements were made in reliance on the private offering exemption of Section 4(a)(2) of the Securities Act and/or the private offering safe harbor provisions of Rule 506(b) of Regulation D based on the following factors: (i) the number of offerees or purchasers, as applicable, (ii) the absence of general solicitation, (iii) investment representations obtained from the investors, including their status as accredited investors and that they were purchasing the shares for their own account for investment purposes, (iv) the provision of appropriate disclosure by the Company, and (v) the placement of restrictive legends on the certificates representing the Common Stock sold.