Healthier Choices Management Corp 8-K/A, filed May 19, 2023
Healthier Choices Management Corp. (HCMC)
About this 8-K/A
Healthier Choices Management Corp filed this 8-K/A on May 19, 2023, reporting on events of August 18, 2022.
Items reported
- Item 1.01: Entered into a material agreement
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Explanatory Note
This Amendment No. 2 on Form 8-K/A to the Form 8-K filed on March 6, 2023, is being filed for the purpose of filing Exhibits 2.1 and 10.1 and describing the Second Amendment to the Securities Purchase Agreement.
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On August 18, 2022, Healthier Choices Management Corp. (the “Company” or “HCMC”) entered into a Securities Purchase Agreement (the “SPA”), pursuant to which the Company sold and issued 14,722.075 shares of its Series E Redeemable Convertible Preferred Stock (the “Preferred Stock”) to five institutional investors (the “Purchasers”) for an aggregate subscription price of $13,250,000 (the “Offering”).
On March 2, 2023, the parties to the SPA entered into First Amendment to Securities Purchase Agreement, pursuant to which the Company agreed to pay each Purchaser ten percent (10%) of the Stated Value (the “Conversion Payment”) of the Preferred Stock upon conversion of such Preferred Stock into common stock prior to the record date for the Spin Off.
On May 15th, the parties to the SPA entered into Second Amendment to the Securities Purchase Agreement, pursuant to which the Company agreed to: (1) extend the time period for the Conversion Payment eligibility to December 1, 2023, (2) amend the Certificate of Designation as set forth in Item 5.03 below and (3) require the Purchasers to purchase Series A Convertible Preferred Stock of a newly created public company (resulting from spin off of HCMC’s grocery and wellness businesses) in the same subscription amounts that the Purchasers paid for the HCMC Preferred Stock (the “Spinoff”) only if the Spinoff is completed prior to December 1, 2023.
As of May 17, 2023, 1,585 shares of Preferred Stock have been converted and 4,416.65 shares of Preferred Stock have been redeemed for total redemption payments of $4,394,428.00 .
The foregoing description of the Second Amendment to Securities Purchase Agreement is a summary and is qualified in its entirety by reference to the provisions thereof, a copy of which is attached to this Current Report as Exhibit 10.1, which is incorporated by reference herein.
ITEM 5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR.
On August 18, 2022 (the “Issue Date”), the Company filed a Certificate of Designations of Preferences, Rights and Limitations of the Series E Redeemable Convertible Preferred Stock (“Certificate of Designation”) with the Secretary of State of the State of Delaware. The number of shares of HCMC Preferred Stock designated is 14,722.075 and each share of HCMC Preferred Stock has a stated value equal to $1,000 (the “Stated Value”). On May 15, 2023, the Company filed an amendment to the Certificate of Designation to make the redemption price of the Preferred Stock (the “Redemption Price”) equal the Stated Value regardless of the date on which it is redeemed. Prior to this amendment, the Redemption Price was discounted by 1% for each month after the seven-month anniversary of the Issue Date that the Purchaser elected not to redeem.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
| Exhibit Number | Description | |
| 2.1 | Healthier Choices Management Corp. Amendment to Certificate of Designation of Preferences, Rights And Limitations of Series E Redeemable Convertible Preferred Stock | |
| 10.1 | Second Amendment to Securities Purchase Agreement, dated as of May 15, 2023, by and between Healthier Choices Management Corp. and the purchasers named therein | |
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Healthier Choices Management Corp. | ||
| Date: May 19, 2023 | By: | /s/ Jeffrey E. Holman |
| Jeffrey E. Holman | ||
| Chief Executive Officer | ||
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Exhibit 2.1
AMENDMENT TO THE
CERTIFICATE OF DESIGNATIONS OF SERIES E
REDEEMABLE CONVERTIBLE PREFERRED STOCK OF
HEALTHIER CHOICES MANAGEMENT CORP.
Healthier Choices Management Corp. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Delaware General Corporation Law”), hereby certifies as follows:
First: On August 18, 2022, the Corporation filed a Certificate of Designations of Series E Redeemable Convertible Preferred Stock (the “COD”) with the Office of the Secretary of State of the State of Delaware, which requires correction as permitted by Section 103(f) of the Delaware General Corporation Law.
Second: The Corporation wishes to amend the COD.
Third: The first sentence of Section 8(a) of the COD shall be deleted and replaced with the following:
“At any time after a Redemption Triggering Event (the “Redemption Period”), each Holder shall have the right to cause the Corporation to redeem all or part of such Holder’s shares of Preferred Stock at a price per share equal to 100% of the Stated Value (the “Redemption Price”).”
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to the Certificate of Incorporation as of the 15th day of May, 2023.
| By: | /s/ Jeffrey Holman | |
| Jeffrey Holman, | ||
| Chief Executive Officer |
Exhibit 10.1
SECOND AMENDMENT TO SECURITIES PURCHASE AGREEMENT
This Second Amendment to that certain Securities Purchase Agreement (this “Agreement”) is dated as of May 15, 2023, between Healthier Choices Management Corp., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”). Capitalized terms not otherwise defined in this Agreement shall have the respective meanings ascribed to them in the SPA (as defined below).
WHEREAS, the parties entered into a Securities Purchase Agreement, dated as of August 18, 2022, and amended (the “Amendment”) on March 1, 2023 (“SPA”), the Purchasers and the Seller; and
WHEREAS, the parties have decided to amend the SPA as set forth below to add certain provision.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
Article I
AMENDMENTS
1.1 Conversion Payment. Upon conversion of the Preferred Stock pursuant to Section 6(a) of the Series E Certificate of Designation prior to December 1, 2023, the Company will pay the Purchaser ten percent (10%) of the Stated Value of the Preferred Stock then converted. This Section 1.1 shall supersede and replace Section 1.1 of the Amendment.
1.2 Spin-Off Financing. The first sentence of Section 4.14 of the SPA shall be revised to replace “September 1, 2023” with “December 1, 2023.”
1.3 Amendment to Series E Certificate of Designation. The Series E Certificate of Designation shall be amended as set forth in Exhibit A hereto,
1.4 No Amendment. Nothing contained herein in any manner modifies or amends any other terms or provisions of the SPA all of which remain in full force and effect unmodified.
Article II
MISCELLANEOUS
2.1 Entire Agreement. This Agreement and the SPA contains the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, either oral or written.
2.2 Amendment and Waiver. This Agreement may be amended only by an instrument in writing signed by all of the signatories hereto.
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2.3 Assignment. This Agreement and the rights and obligations set forth herein shall inure to the benefit of, and be binding upon the parties hereto, and each of their respective successors, heirs and permitted assigns.
2.4 Governing Law; Venue; Waiver of Jury Trial. This Agreement shall be governed by the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule that would cause application of the laws of any jurisdiction other than the State of New York. Each of the parties to this Agreement irrevocably submits to the exclusive jurisdiction of the courts of the State of New York for the purpose of any dispute arising out of or relating to this Agreement. Each of the parties hereto waives any right to trial by jury with respect to any Action related to or arising out of this Agreement.
2.5 Construction. Each party hereto acknowledges that it has been advised by legal and any other counsel retained by such party in its sole discretion. Each party acknowledges that such party has had a full opportunity to review this Agreement and all related exhibits, schedules and ancillary agreements and to negotiate any and all such documents in its sole discretion, without any undue influence by any other party hereto or any third party. The parties have participated jointly in the negotiations and drafting of this Agreement and both shall be deemed drafters. In the event of any ambiguity or question of intent or interpretation, no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
2.6 Counterparts. This Agreement may be executed in two or more counterparts, any one of which need not contain the signatures of all parties, but all of which counterparts when taken together will constitute one and the same agreement. Facsimile signatures (including in .pdf format) shall constitute original signatures for all purposes of this Agreement.
[Remainder of Page Intentionally Left Blank]
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NOW, THEREFORE, the parties hereto have executed this Second Amendment to Securities Purchase Agreement by their duly authorized representatives as an instrument under seal as of the date first written above.
| Purchaser: | Healthier Choices Management Corp. | |||
| Sabby Volatility Warrant master Fund, ltd. | ||||
| By: | /S/ Robert Grundstein | By: | /S/ Jeffrey E. Holman | |
| Name: | Robert Grundstein | Name: | Jeffrey E. Holman | |
| Title: | COO of Investment Manager | Title: | Chief Executive Officer | |
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Exhibit A
AMENDMENT TO THE
CERTIFICATE OF DESIGNATIONS OF SERIES E
REDEEMABLE CONVERTIBLE PREFERRED STOCK OF
HEALTHIER CHOICES MANAGEMENT CORP.
Healthier Choices Management Corp. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Delaware General Corporation Law”), hereby certifies as follows:
First: On August 18, 2022, the Corporation filed a Certificate of Designations of Series E Redeemable Convertible Preferred Stock (the “COD”) with the Office of the Secretary of State of the State of Delaware, which requires correction as permitted by Section 103(f) of the Delaware General Corporation Law.
Second: The Corporation wishes to amend the COD.
Third: The first sentence of Section 8(a) of the COD shall be deleted and replaced with the following:
“At any time after a Redemption Triggering Event (the “Redemption Period”), each Holder shall have the right to cause the Corporation to redeem all or part of such Holder’s shares of Preferred Stock at a price per share equal to 100% of the Stated Value (the “Redemption Price”).”
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to the Certificate of Incorporation as of the 15th day of May, 2023.
| By: | /s/ Jeffrey Holman | |
| Jeffrey Holman, | ||
| Chief Executive Officer |
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