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Item
1.01
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Entry
into a Material Definitive Agreement.
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On
February 8, 2018 alpha-En Corporation (the “Company”) entered into a preferred stock purchase agreement (“Stock
Purchase Agreement”) with several accredited and institutional investors, pursuant to which the Company agreed to issue
and sell in a private placement up to 2,100 shares of Series A Preferred Stock, par value $0.01 per share (“Series A Preferred”),
as well as warrants to purchase the Company’s common stock, par value $0.01 per share (“Common Stock”), at a
purchase price of $1,000 per share, for total gross proceeds of up to $2.1 million.
Terms
of the Series A Preferred
The
rights, preferences, privileges and limitations of the Series A Preferred are set forth in an amended and restated certificate
of incorporation filed by the Company with the Secretary of State of the State of Delaware on February 8, 2018 (the “Restated
Certificate”).
The
Series A Preferred ranks senior to the Company’s common stock with respect to dividend rights and rights upon liquidation,
winding-up or dissolution and will rank pari passu to all future preferred stock of the Company.
The
Series A Preferred is entitled to accrue cumulative dividends at a rate equal to 10.0% simple interest per annum on the original
issue price of $1,000 per share (the “Original Issue Price”). Accrued dividends will be payable quarterly based on
a 365-day year and may be paid in cash or in additional shares of Series A Preferred.
Each
share of Series A Preferred is convertible into 572 shares of Common Stock, subject to customary increases or decreases for stock
splits, stock dividends recapitalizations and the like, and may be converted to Common Stock at any time after issuance at the
option of a holder.
Unless
otherwise required by applicable law, holders of the Series A Preferred will vote together with holders of Common Stock and not
as a separate class and each share of Series A Preferred will have a number of votes equal to the number of shares of Common Stock
then issuable upon conversion of the Series A Preferred.
Upon
any liquidation, dissolution or winding up of the Company, liquidation of the Company’s assets will be made in the following
order of priority: (a) first, payment or provision for payment of debts and other liabilities; (b) second, payment to the holders
of Series A Preferred an amount with respect to each share of Series A Preferred equal to the Original Issue Price, plus any accrued
but unpaid Dividends thereon; and (c) third, payment to the holders of Common Stock.
After
the one year anniversary of the issuance date of the Series A Preferred, the Company will have the right to redeem all or a portion
of the Series A Preferred at a price per share equal to the Original Issue Price plus any accrued but unpaid dividends.
Terms
of the Common Stock Warrant
Each
investor purchasing Series A Preferred pursuant to the Stock Purchase Agreement also received a warrant to purchase Common Stock
(the “Common Stock Warrant”). For each share of Series A Preferred purchased the investors received a warrant to purchase
500 shares of Common Stock. The Warrants have an exercise price of $2.00 per share, are immediately exercisable and will expire
five years from the date of issuance.
The
above descriptions of the Stock Purchase Agreement, Common Stock Warrant and Restated Certificate are qualified in their entirety
by reference to Exhibits 3.1., 10.1 and 10.2 attached hereto, respectively.
