YHC 8-K
LQR House Inc. (YHC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.02. Termination of a Material Definitive Agreement.
Cancellation of Representative Warrants
As previously disclosed in a Current Report on Form 8-K filed by LQR House Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”) on August 11, 2023, the Company issued to designees of EF Hutton, division of Benchmark Investments, LLC (the “Representative”), five year warrants to purchase an aggregate of 57,500 shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), with an exercise price of $5.00 per share, subject to adjustment and a cashless exercise provision, dated August 11, 2023 (the “August Representative Warrants”).
As previously disclosed in a Current Report on Form 8-K filed by the Company with the SEC on October 16, 2023, the Company issued to designees of the Representative, five year warrants to purchase an aggregate of 1,421,053 shares of the Company’s Common Stock, with an exercise price of $0.19 per share, subject to adjustment and a cashless exercise provision (the “October Representative Warrants”).
As previously disclosed in a Current Report on Form 8-K filed by the Company with the SEC on November 13, 2023, the Company issued to a designee of the Representative, a five year warrant to purchase an aggregate of 7,857,143 shares of the Company’s Common Stock, with an exercise price of $0.07 per share, subject to adjustment and a cashless exercise provision (the “November Representative Warrant” and together with August Representative Warrants and October Representative Warrants, the “Warrants”)
On December 16, 2022, the Company and holders of the Warrants entered into cancellation agreements (“Warrant Cancellation Agreements”) pursuant to which holders of the Warrants agreed to surrender and cancel the Warrants and the Company agreed to pay to such holders a total of $60,000 as consideration for such termination.
The foregoing description of the Warrant Cancellation Agreements is qualified in its entirety by reference to the full text of forms of Warrant Cancellation Agreements, copies of which are being filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated herein by reference.
Cancellation of Outside The Box Agreement
As previously disclosed in a Current Report on Form 8-K filed by the Company with the SEC on November 28, 2023, the Company entered into a marketing services agreement (the “Marketing Agreement”) with Outside the ox Capital Inc. (“OTBC”) dated November 21, 2023, pursuant to which the Company agreed to issue to OTBC such number of shares of its Common Stock as amounting to $150,000 as consideration for OTBC’s services.
On December 18, 2023, the Company and OTBC entered into the rescission agreement (the “Rescission Agreement”), pursuant to which the parties mutually rescinded the Marketing Agreement and declared it null and void as of the date of the agreement.
The foregoing description of the Rescission Agreement is qualified in its entirety by reference to the full text of form of Rescission
Agreement, a copy of which is being filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.
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Item 8.01 Other Items.
On December 20, 2023, we issued a press release with respect to cancellation of the Warrants as described herein. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1 | Form of Warrant Cancellation Agreement for warrants issued on August 11, 2023 and October 16, 2023 | |
| 10.2 | Form of Warrant Cancellation Agreement for a warrant issued on November 13, 2023 | |
| 10.3 | Rescission Agreement between LQR House Inc. and Outside the Box Capital Inc., dated as of December 18, 2023 | |
| 99.1 | Press release dated December 20, 2023 | |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL |
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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.
| LQR HOUSE INC. | ||
| Dated: December 20, 2023 | By: | /s/ Sean Dollinger |
| Name: | Sean Dollinger | |
| Title: | Chief Executive Officer | |
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Exhibit 10.1
Personal and Confidential
LQR House Inc.
2699 Stirling Road, Suite A-105
Fort Lauderdale, FL 33312
Attn: Sean Dollinger
Email: [email protected]
Re: Cancellation of Representative Warrants issued by LQR House Inc. on August 11, 2023 and October 16, 2023.
| Dear Mr. Sean Dollinger: | December 16, 2023 |
Pursuant to an underwriting agreement dated August 9, 2023 by and between LQR House Inc. (the “Issuer”) and EF Hutton LLC f/k/a EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”) on behalf of itself as well as other underwriters (the “IPO Underwriting Agreement”), a representative warrant was issued and sold to EF Hutton. Furthermore, pursuant to an underwriting agreement dated October 13, 2023 by and between the Issuer and EF Hutton on behalf of itself as well as other underwriters (the “Follow-on Offering Underwriting Agreement”), a representative warrant was again issued and sold to EF Hutton.
Specifically, as a result of the IPO Underwriting Agreement and in consideration of funds duly paid by or on behalf of EF Hutton to Issuer, I, [*], being EF Hutton’s designee and as registered owner of a common stock purchase warrant, am entitled to subscribe for, purchase and receive, in whole or in part, up to [*] shares of common stock of the Issuer, par value $0.0001 per share (the “Shares”) prior to a certain expiration date. Furthermore, as a result of the Follow-on Offering Underwriting Agreement and in consideration of funds duly paid by or on behalf of EF Hutton to Issuer, I, [*], being EF Hutton’s designee and as registered owner of a common stock purchase warrant, am entitled to subscribe for, purchase and receive, in whole or in part, up to [*] Shares of the Issuer prior to a certain expiration date. I hereby notify you, the Issuer and its executive officers, as follows:
| 1. | The Issuer has tendered or shall imminently tender consideration in the amount of $[*] to EF Hutton and I accordingly, as the registered owner, surrender the common stock purchase warrants to purchase: |
a. up to [*] Shares of the Issuer dated August 11, 2023, all its rights and the exercise form attached thereto. This common stock purchase warrant (please see Exhibit A) remains completely unexercised as of the date hereof and is hereby in its entirety surrendered and cancelled by me, EF Hutton’s designee for such common stock purchase warrant; and
b. up to [*] of the Issuer dated October 16, 2023, all of its rights and the exercise form attached thereto. This common stock purchase warrant (please see Exhibit B) remains completely unexercised as of the date hereof and is hereby in its entirety surrendered and cancelled by me, EF Hutton’s designee for such common stock purchase warrant.
Personal and Confidential
Please acknowledge in writing the cancellation of the aforementioned common stock purchase warrants dated August 11, 2023 and October 16, 2023 by countersigning this letter as soon as possible.
| Very truly yours, | ||
| By: | ||
| Name: | ||
| Title: | ||
| ACKNOWLEDGED: | ||
| LQR House Inc. | ||
| By: | ||
| Name: | Sean Dollinger | |
| Title: | Chief Executive Officer | |
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Personal and Confidential
Exhibit A
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Personal and Confidential
Exhibit B
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Exhibit 10.2
Personal and Confidential
LQR House Inc.
2699 Stirling Road, Suite A-105
Fort Lauderdale, FL 33312
Attn: Sean Dollinger
Email: [email protected]
Re: Cancellation of Representative Warrant issued by LQR House Inc. on November 13, 2023.
| Dear Mr. Sean Dollinger: | December 16, 2023 |
Pursuant to an underwriting agreement dated November 9, 2023 by and between LQR House Inc. (the “Issuer”) and EF Hutton LLC f/k/a EF Hutton, division of Benchmark Investments, LLC (“EF Hutton”) on behalf of itself as well as other underwriters (the “Follow-on Offering Underwriting Agreement”), a representative warrant was issued and sold to EF Hutton.
Specifically, as a result of the Follow-on Offering Underwriting Agreement and in consideration of funds duly paid by or on behalf of EF Hutton to Issuer, EF Hutton Holdings, LLC (“EF Hutton Holdings”), being EF Hutton’s designee and as registered owner of a common stock purchase warrant, is entitled to subscribe for, purchase and receive, in whole or in part, up to 7,857,143 shares of common stock of the Issuer, par value $0.0001 per share (the “Shares”) prior to a certain expiration date. EF Hutton Holdings hereby notifies you, the Issuer and its executive officers, as follows:
| 1. | The Issuer has tendered or shall imminently tender consideration in the amount of $[*] to EF Hutton and EF Hutton Holdings accordingly, as the registered owner, surrenders the common stock purchase warrant to purchase up to 7,857,143 Shares of the Issuer dated November 13, 2023, all its rights and the exercise form attached thereto. This common stock purchase warrant (please see Exhibit A) remains completely unexercised as of the date hereof and is hereby in its entirety surrendered and cancelled by EF Hutton Holdings, EF Hutton’s designee for such common stock purchase warrant. |
Personal and Confidential
Please acknowledge in writing the cancellation of the aforementioned common stock purchase warrant dated November 13, 2023 by countersigning this letter as soon as possible.
| Very truly yours, | ||
| EF Hutton Holdings, LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
| By: | ||
| Name: | ||
| Title: | ||
| ACKNOWLEDGED: | ||
| LQR House Inc. | ||
| By: | ||
| Name: | Sean Dollinger | |
| Title: | Chief Executive Officer | |
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Personal and Confidential
Exhibit A
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Exhibit 10.3
RESCISSION AGREEMENT
This Rescission Agreement (this “Agreement”) is entered into as of December 18, 2023 by and between LQR House Inc (the “Company”) and Outside the Box Capital Inc (“Outside the Box Capital”). Company and Outside the Box Capital are each a “Party” and collectively, the “Parties” as designated in this Agreement.
RECITALS:
WHEREAS, on November 21, 2023, the Parties entered into that certain Letter Agreement (the “Letter Agreement”) where Outside the Box Capital agreed to provide marketing and distribution services to the Company.
WHEREAS, the Parties understand that the Letter Agreement was signed in error and shall be null and void since the date it was signed.
NOW THEREFORE, in consideration of the mutual terms and conditions set forth herein, the Parties agree as follows:
1. The Parties hereby mutually rescind the Letter Agreement and declare it null and void as of the date of the Letter Agreement.
IN WITNESS WHEREOF, and intended to be legally bound hereby, each of the Parties hereto has executed or caused to be executed by duly authorized representatives this Agreement as of the date first written above.
OUTSIDE THE BOX CAPITAL INC
| By: | /s/ Jason Coles | |
| Jason Coles | ||
| Chief Executive Officer |
LQR HOUSE INC
| /s/ Sean Dollinger | ||
| By: | Sean Dollinger | |
| Title: | Chief Executive Officer | |
Exhibit 99.1
LQR House Initiates Warrants Cancellation and Commits to Postpone Public Offerings for the Foreseeable Future
MIAMI BEACH, FL / ACCESSWIRE / December
20, 2023 / LQR House Inc. (the “Company” or “LQR House”) (NASDAQ:LQR), a niche ecommerce platform specializing
in the spirits and beverage industry, has declared a significant step by cancelling representative warrants to bolster shareholder confidence.
The Company is also committing to a hiatus on offerings and capital raises, redirecting its efforts toward expanding its e-commerce presence
and cultivating marketing partnerships. With approximately $8 million in cash reserves, LQR House believes that the Company can preserve
cash flow, sustain business growth, and prioritize profitability.
On December 16, 2023, LQR House and designees of EF Hutton LLC (“EF Hutton”) entered into several agreements to cancel EF Hutton’s
representative warrants to purchase a total of 9,335,696 shares of the Company’s common stock. These warrants had been issued to EF Hutton
designees in three public offerings of the Company’s common stock completed since August 11, 2023, with exercise prices ranging from $5.00
per share to $0.07 per share, encompassing all outstanding warrants of the Company. In consideration for the cancellation, LQR House agreed
to compensate EF Hutton designees a total of $60,000.
Given the current business environment, LQR House has also opted to delay further offerings and capital raises at this time, choosing instead to explore ventures that may enhance Company’s value. This strategic decision aligns with the Company’s dedication to prudent financial management and long-term value creation for its shareholders.
Sean Dollinger, Chief Executive of LQR House, emphasized the significance of this move, stating, “We believe, that canceling all outstanding warrants at a discount to the market price provides LQR House with a unique opportunity to enhance shareholder protection. This action actively prevents additional dilution, reinforcing our commitment to executing promises to our shareholders. With the completion of these transactions, LQR House is now warrant-free, which, we believe, helps alleviating investor concerns about the financial structure of the Company. In our view, this step allows them to focus on the strong fundamentals of our business. As LQR House continues its growth through product and service expansion, exploring various acquisition and business development opportunities, we anticipate that this move sets the stage for more favorable terms in future transactions with financial and strategic investors.”
About LQR House Inc.
LQR House intends to become a prominent force in the wine and spirits e-commerce sector, epitomized by its flagship alcohol marketplace, cwspirits.com. This platform seamlessly delivers a diverse range of emerging, premium, and luxury spirits, wines, and champagnes from esteemed retail partners like Country Wine & Spirits. Functioning as a technology-driven hub, LQR House utilizes software, data analytics, and artificial intelligence to elevate the consumer experience. CWSpirits.com stands out as the go-to destination for modern, convenience-oriented shoppers, providing a curated selection of alcohol products delivered to homes across the United States. Beyond its role as an e-commerce leader, LQR House is a marketing agency with a specialized focus on the alcohol industry. The company measures campaign success by directly correlating it with sales on CWSpirits.com, demonstrating a proven return on investment. Backed by an influential network of over 550 figures in the alcohol space, LQR House strategically drives traffic to CWSpirits.com, enhancing brand visibility. LQR House intends to disrupt the traditional landscape of the alcohol industry, driven by its dedication to providing an unparalleled online purchasing experience and delivering tailored marketing solutions.
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Shareholders can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations that arise after the date hereof, except as may be required by law. These statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and the completion of the initial public offering on the anticipated terms or at all, and other factors discussed in the “Risk Factors” section of the registration statement on Form S-1 filed with the SEC. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement on Form S-1 and other filings with the SEC. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov.
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SOURCE: LQR House Inc.