FINGERMOTION, INC. : Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (Form 8 -K)

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Section 1.01 Entering into a Material Definitive Agreement

On August 9, 2022, FingerMotion, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with Lind Global Fund II LPa
Delaware limited partnership (the “Investor”), pursuant to which the Company issued to the Investor a secured, interest-free, two-year convertible promissory note in the principal amount of $4,800,000 (the “Note”) and one common share purchase warrant (the “Warrant”) to acquire 3,478,261 common shares of the Company (each, a “Warrant Share”). A total of $4,000,000 has been funded under the note (representing the principal amount less a 20% coupon). Proceeds from the sale of the note and warrant are for general working capital purposes. In connection with the issuance of the note and warrant, the Company paid a $120,000 commitment fee to the Investor.

Commencing 180 days after the issuance of the note, the Company will pay the outstanding principal amount of the note in eighteen (18) consecutive monthly installments of $266,667 each. At the option of the Company, the monthly payment may be made in cash, in common shares of the Company (the “Redemption Shares”) at a price based on 90% of the average of the five (5) lowest daily VWAP at course of the twenty (20) days before the date of payment subject to a floor price of $0.86 per share (the “Floor Price”), or a combination of cash and Redemption Shares, provided that if at the time the Redemption Share Price is deemed to be the Floor Price, then in addition to Redemption Shares, the Company will pay the Investor an additional amount in cash as determined by a formula contained in the Note. In order for the Company to issue Redemption Shares, the Redemption Shares must either be eligible for immediate resale under Rule 144 or be registered under the United States Securities Act of 1933, as amended (the “WE Securities Act”). Any portion of a monthly cash payment must include a premium of three percent (3%) of that cash amount.

After the date that is sixty (60) days after the date the registration statement was declared effective (as discussed in more detail below), the Company may refund all, but not less than all, of the outstanding principal amount, provided that such repayment will include a premium of five percent (5%) of the outstanding principal amount of the note, and the investor shall have the right to convert up to one-third (1/3) of the amount outstanding principal amount of the Note at a price per share equal to the lesser of the Redemption Share Price or the Conversion Price (as described below).

The purchase agreement contains a restriction that in no event may more than 8,561,451 common shares of the Company be issued under the combined note and warrant without first receiving shareholder approval. to issue more than 8,561,451 common shares of the Company below.

The Company has agreed to file a registration statement (the “Registration Statement”) with the Security and Exchange Commission no later than thirty (30) days from August 9, 2022, covering the resale of all common shares of the Company issuable to the Investor under the Note and Warrant. The Investor has also been granted additional registration rights. In addition, pursuant to the terms of the Purchase Agreement, the Investor is entitled to participate in any offering of shares or debt securities, or a combination of units thereof (a “Subsequent Financing”) equal to 10% of the Subsequent Financing under the same conditions. , conditions and prices provided for in the Subsequent Financing up to August 9, 2024.


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The Note is convertible into ordinary shares of the Company by the Investor at any time after the earlier of six (6) months from the date of issue or the date on which the Registration Statement becomes effective, provided that no conversion may be effected if would result in the beneficial ownership by the Investor and its affiliates of more than 4.99% of the outstanding common shares of the Company. The conversion price of the Note is equal to $2.00subject to customary adjustments, however, if new securities, other than exempt securities, are issued by the Company at a price lower than the conversion price, the conversion price will be reduced to this price.

In the event of a change of control of the Company, the Investor has the right to require the Company to prepay the outstanding principal amount of the Bond. A change of control includes a change in the composition of the board of directors of the Company, a shareholder beneficially owning more than 40% or the sale or other disposition by the Company of all or substantially all of the assets .

The note contains certain negative clauses, in particular the prohibition for the Company of certain distributions, loans or issues of securities at a future price.

In the event of the occurrence of an event of default as described in the Note, the bearer may at any time, at his choice, declare the Note immediately due and payable in an amount of 110% or 120% of the principal amount remaining due according to the type of event. of default. Events of default include, but are not limited to, default on any other debt in excess of $50,000; the breach or performance of any other covenant, condition or agreement contained in the ticket or any transaction document; failure of the Company to instruct its transfer agent to issue uncaptioned share certificates; the shares of the Company are no longer listed or cease to be listed; if after six months the shares are not available for immediate resale under Rule 144; and the market capitalization of the Company is lower $20,000,000 for ten (10) consecutive days. In the event of default, subject to applicable recovery periods, the holder may demand that all or part of the principal amount remaining due be converted into ordinary shares of the Company at the lower of the conversion price and 80% of the average price of the three ( 3) Lowest daily VWAP during the twenty (20) days preceding the delivery of the conversion notice, subject to the Floor Price, it being understood that if, at the time of this request, the conversion price is deemed to be the Floor Price, then, in addition to the common shares of the Company at the floor price, the Company will pay the holder an additional cash amount as determined in accordance with a formula contained in the note.

The warrant entitles its holder to purchase up to 3,478,261 common shares of the Company for up to August 9, 2027at an exercise price of $1.75 per warrant share, subject to customary adjustments. In addition, the exercise price is revisable in the event of the issue of new securities, other than exempt securities, at an effective price lower than the exercise price, then the exercise price will be reduced to an exercise price equal to the lesser of (i) the consideration per share deemed to have been paid for such new securities, and (ii) the average VWAP of the common shares of the Company during the five (5) trading days immediately following such issuance, subject to subject to compliance with commercial market requirements. . . .

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under a

           Off-Balance Sheet Arrangement or a Registrant



The information set out above in Section 1.01 relating to the rating is incorporated by reference into this Section 2.03.

Item 3.02 Unregistered Sale of Equity securities

Reference is made to the disclosure set forth in 1.01 above, which disclosure is incorporated herein by reference.

The note and warrant have been, and the common shares of the Company issuable upon conversion of the note and exercise of the warrant will be, issued pursuant to an exempt transaction from the requirements of registration under the WE
Securities Act on the basis of the exemption provided by Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder. The Investor has declared that he is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D, and that he is acquiring the securities described herein for investment purposes only and not in for the purpose of, or for resale in connection with, their public sale or distribution.


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Item 9.01 Financial statements and supporting documents




(d) Exhibits



Exhibit    Description
  4.1        Warrant, dated August 9, 2022, issued by FingerMotion, Inc. to Lind
           Global Fund II LP
  10.1       Securities Purchase Agreement between FingerMotion, Inc. and Lind
           Global Fund II LP, dated August 9, 2022
  10.2       Senior Secured Convertible Promissory Note, dated August 9, 2022,
           issued by FingerMotion, Inc. to Lind Global Fund II LP(*)
  10.3       Security Agreement between FingerMotion, Inc. and Lind Global Fund II
           LP, dated August 9, 2022
  10.4       Guaranty, dated August 9, 2022, made by each of Finger Motion Company
           Limited, Finger Motion (CN) Global Limited, Finger Motion (CN) Limited,
           Shanghai JiuGe Business Management Co., Ltd., Finger Motion Financial
           Group Limited and Finger Motion Financial Company Limited, in favor of
           Lind Global Fund II LP
  104      Cover Page Interactive Data File (the cover page XBRL tags are embedded
           within the inline XBRL document)




Notes:



(*)    Portions of this exhibit have been omitted.



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