UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 30, 2022
| CorpHousing Group Inc. |
| (Exact Name of Registrant as Specified in Charter) |
| Delaware | 001-41473 | 82-3334945 | ||
|
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 212 Biscayne Blvd, Suite 253, Miami, Florida | 33137 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (833) 723-7368
| N/A |
| (Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Ticker symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.00001 per share | CHG | The Nasdaq Stock Market LLC |
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
As previously announced, on September 30, 2022, CorpHousing Group Inc. (the “Company” or “we” and related pronouns), entered into a security purchase agreement (the “September 2022 Investor Purchase Agreement”) with a private investor under which we sold or may sell, in a series of private placements (the “September 2022 Investor Financing”) up to an aggregate of $2,875,000 principal amount of 15% original issue discount notes (“September 2022 Investor Notes”) and five-year warrants (“September 2022 Investor Warrants”) to purchase up to an aggregate of 718,750 shares of our common stock at a per-share exercise price of $4.00. The September 2022 Investor Notes bear interest at 5% per annum, with all accrued interest payable at maturity.
At the time of execution of the September 2022 Investor Purchase Agreement, we closed on $1,408,750 principal amount of September 2022 Investor Notes (the “First Closing Notes”) and issued September 2022 Investor Warrants to purchase 352,188 shares of common stock for gross proceeds of $1,225,000 (giving effect to the 15% original issue discount). The First Closing Notes mature on September 30, 2023.
The September 2022 Investor Financing continues our existing relationship with the investor to which we previously sold in private placements of 15% original issue discount notes (“Prior Investor Notes”) and five-year warrants (“Prior Investor Warrants”). As of the date of this Current Report and giving effect to the September 2022 Investor Financing closed to date, we have approximately $5,033,750 principal amount of September 2022 Investor Notes and Prior Notes outstanding, and warrants to purchase an aggregate of 1,789,688 shares outstanding.
All of the September 2022 Investor Notes (together with the Prior Notes) are and will be secured by a first priority security interest in all of our assets until such time as such notes are repaid or converted into our preferred stock or common stock under the terms thereof. The September 2022 Investor Notes are convertible at the election of the holder into shares of our common stock at a conversion price per share of $4.11. The Prior Notes are similarly convertible at a conversion price per share of $3.00.
The notes and warrants provide for certain conversion and exercise price adjustments in the event we effectively issue shares in future financings for cash and other circumstances at per share prices below the then effective conversion or exercise prices of such notes and warrants. On October 10, 2022, we entered into an addendum to the September 2022 Investor Purchase Agreement, effective as of September 30, 2022, which provides that we shall not issue, nor shall we be required to issue, upon conversion of the notes or exercise of the warrants described in this Current Report, an aggregate of more than 19.99%, or 5,303,230 shares (subject to adjustment for stock splits, stock dividends and the like), of our common stock (the “Nasdaq Exchange Cap); provided, that such limitation shall not apply in the event that the we (A) obtain the approval of our stockholders as required by the applicable rules of Nasdaq for issuances of shares of our common stock upon conversion of such notes and exercises of such warrants in excess of the Nasdaq Exchange Cap or (B) obtain a written opinion from outside counsel to our company that such approval is not required.
| Item 3.02. | Unregistered Sales of Equity Securities |
The information set forth above in Item 2.01 of this Current Report is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits: |
| † | Certain of the exhibits and schedules to this agreement have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
(1) Previously filed.
(2) Filed herewith.
SIGNATURE
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.
| Dated: October 11, 2022 | CORPHOUSING GROUP INC. | |
| By: | /s/ Brian Ferdinand | |
| Name: Brian Ferdinand | ||
| Title: Chief Executive Officer and Chairman | ||
Exhibit 10.5
ADDENDUM
Addendum, dated as of September 30, 2022, to Securities Purchase Agreement (this “Agreement”), dated as of September 30, 2022, between CorpHousing Group Inc., 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”).
WHEREAS, as of September 30, 2022, the Company had issued and outstanding 26,529,418 shares of common stock;
WHEREAS, 19.99% of such outstanding shares would currently be comprised of 5,303,230 shares; and
WHEREAS, the parties desire to ensure compliance with the listing requirements of the Company’s principal trading market.
NOW THEREFORE, it is agreed that:
The following Section 4.26 is hereby added to the Agreement:
“Section 4.26 Conversion and Exercise Limits.
Notwithstanding anything contained in this Agreement or the Notes or Warrants, in order to comply with the rules and regulations of The Nasdaq Capital Market, including, but not limited to, Nasdaq Listing Rule 5635(d), the Company shall not issue, nor shall it be required to issue upon conversion of the Notes or exercise of the Warrants, an aggregate of more than 5,303,230 shares (subject to adjustment for stock splits, stock dividends and the like) of Common Stock (the “Nasdaq Exchange Cap”); provided, that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of Nasdaq for issuances of shares of Common Stock upon conversion of the Notes and exercises of Warrants in excess of the Nasdaq Exchange Cap or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Purchaser. Until such approval or such written opinion is obtained, the Purchaser shall not be issued in the aggregate, upon conversion of any Notes or exercise of any Warrants or otherwise pursuant to the terms of this Agreement, shares of Common Stock in an amount greater than the Nasdaq Exchange Cap.
In the event that any Purchaser shall sell or otherwise transfer any of such Purchaser’s Notes or Warrants, the transferee thereof shall be allocated a pro rata portion of the Nasdaq Exchange Cap (the “Nasdaq Exchange Cap Allocation”) with respect to such portion of such Notes and/or Warrants so transferred, and the restrictions of the prior sentence shall apply to such transferee with respect to its Nasdaq Exchange Cap Allocation.”
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be duly executed by their respective authorized signatories as of the date first indicated above.
| CORPHOUSING GROUP INC. | ||
| By: | /s/ Brian Ferdinand | |
| Brian Ferdinand | ||
| CEO | ||
| GREENLE PARTNERS LLC SERIES ALPHA P.S. | ||
| By: | /s/ Alan Uryniak | |
| Alan Uryniak | ||
| Manager | ||