UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On August 23, 2024 and July 25, 2024, Perfect Moment Ltd., (the “Company”), and its subsidiaries, Perfect Moment USA Inc. and Perfect Moment Asia Limited (collectively, the “Borrower”) entered into subordinated business loan and security agreements (the “Loan Agreements) with Agile Lending, LLC (the “Lender”) and Agile Capital Funding, LLC, as collateral agent, which provides for the issuance by the Borrower of subordinated secured promissory notes in the principal amounts of $525,000 (the “July Note “) and $1,050,000 (the “August Note” and collectively with the July Note, the “Notes”). Principal and interest in the aggregate amount of $745,500 under the July Note shall be repaid in weekly payments of $26,625 commencing on August 2, 2024, and shall be repaid on or before the maturity date of February 7, 2025. Principal and interest in the aggregate amount of $1,491,000 under the August Note shall be repaid in weekly payments of $53,250 commencing on September 3, 2024, and shall be repaid on or before the maturity date of September 16, 2025. The Notes may be prepaid subject to a prepayment fee. Payment under the Notes is expressly subordinated to the Borrower’s obligations on certain Senior Indebtedness, as such term is defined in the Loan Agreements.
The Borrower granted the collateral agent a security interest, for the benefit of the Lender, in certain properties, rights and assets of the Borrower, as set forth in the Loan Agreements.
The Borrower agreed to certain covenants under the Loan Agreements including, but not limited to, delivery of certain financial statements and providing the Lender with prompt notice upon the occurrence of certain events as set forth in the Loan Agreements. The Borrower also agreed to certain negative covenants, including, but not limited to, refraining from taking certain actions without the prior written consent of the Lender.
The Loan Agreements provide for certain standard events of defaults, including, but not limited to, failure to make any required payment under the Notes, the Company becoming insolvent, the Company and its subsidiaries, as a whole, becoming insolvent, and the filing of any notice of a lien, levy or assessment against the Borrower or its material subsidiaries, A default interest rate of 5% will become effective upon the occurrence of an event of default.
The foregoing description of the Loan Agreements and the Notes are not complete and are qualified in their entirety by reference to the full text of such agreements, which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 10.1* | Subordinated Business Loan and Security Agreement dated July 25, 2024 | |
| 10.2* | Subordinated Business Loan and Security Agreement dated August 23, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of such omitted materials supplementally upon request by the Securities and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PERFECT MOMENT LTD. | ||
| Date: August 29, 2024 | By: | /s/ Jeff Clayborne |
| Jeff Clayborne | ||
| Chief Financial Officer | ||