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Subsequent Events
12 Months Ended
Dec. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events

18.SUBSEQUENT EVENTS

February Term Loan

On February 2, 2021, the Company entered into a Securities Purchase Agreement (the “February Securities Purchase Agreement”) with High Trail Investments ON LLC ( “High Trail ON”), pursuant to which, among other things, the Company agreed to issue and sell to High Trail ON, in a private placement transaction (the “February Private Placement”), in exchange for the payment by High Trail ON of $14.0 million less applicable expenses as set forth in the February Securities Purchase Agreement, (i) a 0% coupon senior secured promissory note in an aggregate principal amount of $16.5 million (the “February Note”) that will mature on February 1, 2023, and (ii) a warrant to purchase up to an aggregate of 469,931 shares of common stock of the Company (the “February Warrant”). The Company used all of the net proceeds from the February Private Placement to fund the Healing Solutions asset purchase described below.

In connection with the February Private Placement, on February 2, 2021, the Company entered into (i) an amendment (the “SPA & Note Amendment”) to that certain Securities Purchase Agreement (the “December Securities Purchase Agreement”), dated as of November 30, 2020, by and among the Company and High Trail and the Note and (ii) an amendment (the “December Amendment”) to the Warrant. The SPA & Note Amendment amends the December Securities Purchase Agreement and the Note to, among other things, allow for the issuance of the February Note and to clarify how the issuance of the February Note and certain of High Trail ON’s rights thereunder affects the Note and High Trail’s rights under the Note. The December Amendment amends the Warrant to amend the provision that gives the Company the right to require High Trail to exercise the Warrant if the price of the Company’s common stock exceeds 200% of the exercise price of the Warrant for 20 consecutive trading days and certain other conditions are satisfied to increase the price per share that the Company’s common stock must exceed for 20 consecutive trading days from $18.02 to $30.00 per share.

Healing Solutions Acquisition

On February 2, 2021, the Company acquired the assets of e-commerce company, Healing Solutions, LLC, a leading online seller of essential oils (the “Healing Solutions Assets”). As consideration for the Healing Solutions Assets, the Company paid approximately $15.3 million in cash and issued approximately 1.4 million shares of the Company’s common stock.

 

 

High Trail Letter Agreement

On February 8, 2021, the Company entered into a letter agreement with High Trail (the “Letter Agreement”), pursuant to which, among other things, (i) the Company and High Trail agreed to amend the terms of the Warrant, to provide that the Warrant was immediately exercisable on a cash basis, (ii) High Trail agreed to exercise 980,000 shares of the Company’s common stock subject to the Warrant (the “Warrant Shares”) for an aggregate payment to the Company of $8.8 million (iii) High Trail and the Company agreed to cancel the unexercised portion of the Warrant in exchange for an aggregate payment by High Trail to the Company of $17.0 million and the issuance by the Company to High Trail of a warrant to purchase 1,884,133 shares of the Company’s common stock (the “Penny Warrant”), (iv) the Company agreed to seek stockholder approval (collectively, the “Stockholder Approvals”) at a stockholder meeting to be held no later than May 31, 2021 (the “Stockholder Meeting”) to issue shares of the Company’s common stock in excess of the limitations imposed by Nasdaq Listing Standard Rule 5635(a) and/or 5635(d) (collectively, the “Nasdaq Rules”) pursuant to the Additional Warrant (as defined below), the Note, the February Note, the February Warrant and that certain Asset Purchase Agreement, dated February 2, 2021, by and among the Company and Truweo, LLC, as Purchaser, Healing Solutions, LLC, Jason R. Hope, and for the purposes of Section 5.11 and Article VII, Super Transcontinental Holdings LLC, (v) the Company agreed to issue to High Trail a warrant to purchase 750,000 shares of the Company’s common stock (the “Additional Warrant”), (vi) the Company agreed to prepare and file by March 26, 2021 a registration statement (the “Registration Statement”) with the Securities and Exchange Commission for the purpose of registering for resale the Warrant Shares and the shares issuable upon exercise of the Penny Warrant (the “Penny Warrant Shares”), and (vii) High Trail agreed, for the first 30 days following the effectiveness of the Registration Statement, not to sell, or otherwise transfer or dispose of the Warrant Shares or Penny Warrant Shares on any day in an amount that is greater than 10% of the trading volume of the Company’s common stock for such day.

Pursuant to the Letter Agreement, High Trail exercised the December Warrant and the Company issued the Penny Warrant and the Additional Warrant to High Trail on February 9, 2021.

High Trail Amendments

On February 8, 2021, the Company entered into (i) an amendment (the “2022 Note Amendment”) to the Note, (ii) an amendment (the “2023 Note Amendment”) to the February Note, and (iii) an amendment (the “Warrant Amendment”) to the February Warrant.

The 2022 Note Amendment and the 2023 Note Amendment amend the Note and the February Note, respectively, to provide that no shares of Common Stock may be issued pursuant thereto unless the Company obtains stockholder approval to issue shares of Company’s common stock pursuant thereto in excess of the limitations imposed by the Nasdaq Rules.

The Warrant Amendment amends the February Warrant to provide that: (i) it may only be exercised for up to 134,348 shares of Company’s common stock unless the Company obtains stockholder approval contemplated by the Nasdaq Rules to issue additional shares of Company’s common stock in excess of 134,348 shares, (ii) its term shall be the later of five years from the date of issuance and the date that is one year from the date that the Stockholder Approvals are obtained, and (iii) the beneficial ownership limitation is increased from 4.99% to 9.99%.

Voting Agreement

In connection with the execution of the Letter Agreement, the Company and each of the Company’s executive officers and members of Company’s board of directors, in his or her capacity as a stockholder of the Company, entered into a voting agreement (collectively, the “Voting Agreements”) pursuant to which he or she agreed to vote, at an annual or special meeting of stockholders of the Company, all shares of Company’s common stock that he or she holds in favor of the Stockholder Approvals. Pursuant to the Letter Agreement, the Company agreed to use best efforts to ensure that at least an aggregate of 850,000 shares of Company’s common stock remain subject to the Voting Agreements from the record date for the Stockholder Meeting until the Stockholder Approvals are obtained or the Voting Agreements are otherwise terminated.