Greenwave Technology Solutions Inc.

01/13/2025 | Press release | Distributed by Public on 01/13/2025 08:28

Material Agreement Form 8 K

Item 1.01 Entry into a Material Definitive Agreement.

Registered Direct Offering and Concurrent Private Placement

On January 10, 2025, Greenwave Technology Solutions, Inc. (the "Company") and certain institutional and accredited investors (the "Purchasers") entered into a securities purchase agreement (the "Purchase Agreement"), pursuant to which the Company agreed to sell to such Purchasers an aggregate of 7,544,323 shares (the "Shares") of common stock, par value $0.001 per share, of the Company (the "Common Stock"), in a registered direct offering (the "Registered Direct Offering"), and accompanying warrants to purchase up to 7,544,323 shares of Common Stock (the "Warrants") in a concurrent private placement (the "Private Placement" and together with the Registered Direct Offering, the "Offering"), for gross proceeds of approximately $4 million, before deducting the placement agent's fees and other estimated offering expenses. The purchase price per Share and the accompanying Warrant to purchase one share of Common Stock is $0.5302.

The sale and offering of the Shares pursuant to the Purchase Agreement will be effected as a takedown off the Company's shelf registration statement on Form S-3 (File No. 333-271324), which became effective on April 28, 2023 (the "Registration Statement"), pursuant to a prospectus supplement and accompanying prospectus to be filed with the Securities and Exchange Commission (the "SEC"). The Warrants, the Placement Agent Warrants (as defined herein) and the shares of Common Stock underlying the Warrants ("Warrant Shares") and the Placement Agent Warrant Shares (as defined herein) were not offered pursuant to the Registration Statement and were offered pursuant to an exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Act"), contained in Section 4(a)(2) thereof and/or Regulation D promulgated thereunder.

The Warrants will be exercisable upon the receipt of stockholder approval for the issuance of the Warrants and Warrant Shares and have an exercise price of $0.5302 per share. The Warrants will expire five years from the date of stockholder approval. At any time after the date that is 120 days following the Closing (as defined below) of the Offering, the Warrants can be exercised on a cashless basis if there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares. The Company has agreed to file a registration statement under the Act with the SEC covering the resale of the Warrant Shares within 20 calendar days following the date of the Purchase Agreement and to use commercially reasonable efforts to cause the registration statement to be declared effective by the SEC within 120 days following the Closing of the Offering.

Following the later of receipt of approval of the Company's stockholders and effectiveness of a registration statement registering the resale of the Warrant Shares, the Warrants may be redeemed by the Company if the price of the Company's Common Stock on Nasdaq is more than 200% of the exercise price of the Warrants for 20 consecutive trading days and the Company gives proper notice to the holders of such redemption. The Purchase Agreement also prohibits each Purchaser from conducting any short sales while such Purchaser owns any unexpired Warrants.

The Company currently intends to use the net proceeds from the Offering for satisfaction of the Company's debt and for working capital purposes. The Offering is expected to close on or about January 14, 2025 (the "Closing").

Dawson James Securities, Inc. (the "Placement Agent") is acting as the placement agent for the Offering. Pursuant to an engagement agreement between the Placement Agent and the Company, dated as of January 10, 2025, the Company agreed to pay the Placement Agent a cash fee equal to 6% of the aggregate gross proceeds raised in the Offering, and to reimburse the Placement Agent for certain expenses, including legal fees, of $50,000 in the aggregate. In addition, the Company agreed to issue to the Placement Agent, or its designees, warrants (the "Placement Agent Warrants") to purchase up to 754,432 shares of Common Stock (the "Placement Agent Warrant Shares"). The Placement Agent Warrants have generally the same terms and conditions as the Warrants issued to the Purchasers, except that the Placement Agent Warrants will have an exercise price equal to $0.66275 per share.

The legal opinion of Pryor Cashman LLP relating to the legality of the issuance and sale of the Shares in the Registered Direct Offering is attached as Exhibit 5.1 to this Current Report on Form 8-K.

Exchange Offer

Concurrently with the Offering, on January 10, 2025, the Company entered into exchange agreements (collectively, the "Exchange Agreements") with holders (the "June Holders") of certain warrants issued on or about June 12, 2024 to purchase the Company's Common Stock (the "June Warrants") whereby the Company and the June Holders agreed to exchange the June Warrants for shares of Common Stock equivalent to 96% of the shares of Common Stock issuable upon exercise of the June Warrants (the "Exchange"). Pursuant to the Exchange, the Company agreed to issue 5,327,401 shares of Common Stock (the "Exchange Shares") in exchange for the surrender and termination of certain June Warrants to purchase up to 5,549,374 shares of Common Stock.

The issuances of the Exchange Shares pursuant to the Exchange Agreement were made in reliance on the exemption from registration provided by Section 3(a)(9) of the Act.