UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 12, 2019
Ondas
Holdings Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 000-56004 | 47-2615102 | ||
|
(State
or other jurisdiction
of incorporation |
(Commission
File Number) |
(IRS
Employer
Identification No.) |
165
Gibraltar Court, Sunnyvale, California 94089
(Address of principal executive offices) (Zip Code)
(888) 350-9994
Registrant’s telephone number, including area code:
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:
☐ 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))
Securities registered pursuant to Section 12(b) of the Act: None
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in 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 ☒
If an emerging growth company, indicate by checkmark 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. ☐
| Item 1.01. | Entry into a Material Definitive Agreement. |
The information required by this Item 1.01 is incorporated by reference to Item 2.03 of this report.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Advance of $750,000 under Loan and Security Agreement with Energy Capital, LLC
On July 12, 2019, Ondas Holdings Inc. (the "Company") drew down an advance of $750,000 available (the "Twelfth Advance") under the Loan and Security Agreement with Energy Capital, LLC ("Energy Capital") entered into on October 1, 2018 (the "Loan Agreement") by the Company and Energy Capital (the "Loan"). The Twelfth Advance proceeds will be utilized primarily for inventory and operating capital.
The principal amount outstanding under the Loan bears interest at a per annum rate equal to the greater of (a) 11.25% or (b) 11.25% plus the Prime Rate (as published by the Wall Street Journal (National Edition)), less 3.25%. All amounts outstanding under the Loan are secured by a lien on the Company’s assets, subject to terms of outstanding debt obligations, and become due and payable on September 30, 2020.
The Loan Agreement contains customary events of default and affirmative and negative covenants for transactions of this nature. Upon an event of default, Energy Capital has the right to require the Company to prepay the outstanding principal amount of the Loan plus all accrued and unpaid interest.
The Loan was completed through a private placement and is exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended. In claiming the exemption under Section 4(2), the Company relied in part on the following facts: (1) the offer and sale involved one purchaser (Energy Capital); (2) the purchaser had access to information regarding the Company; (3) the purchaser represented that it (a) had the requisite knowledge and experience in financial and business matters to evaluate the merits and risk of an investment in the Company; (b) was able to bear the economic risk of an investment in the Company; (c) will acquire the Loan for its own account in a transaction not involving any general solicitation or general advertising, and not with a view to the distribution thereof; and (4) a restrictive legend was placed on the instrument evidencing the Loan.
A copy of the Loan is filed herewith as Exhibit 10.2 and incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The information required by this Item 3.02 is incorporated by reference to Item 2.03 of this report.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
* Filed herewith.
1
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.
| Date: July 15, 2019 | ONDAS HOLDINGS INC. | |
| By: | /s/ Eric A. Brock | |
| Eric A. Brock | ||
| Chief Executive Officer | ||
2
Exhibit 10.2
SECURED TERM PROMISSORY NOTE
| $750,000 | Advance Date: July 12, 2019 |
| Maturity Date: September 30, 2020 |
FOR VALUE RECEIVED, Ondas Holdings Inc., a Nevada corporation, for itself and each of its Subsidiaries (the “Borrower”) hereby promises to pay to the order of Energy Capital, LLC, a Florida limited liability company, or the holder of this Note (the “Lender”) at Lender's address listed in Loan Agreement, or such other place of payment as the holder of this Secured Term Promissory Note (this “Promissory Note”) may specify from time to time in writing, in lawful money of the United States of America, the principal amount of Seven Hundred Fifty Thousand Dollars ($750,000) or such lesser principal amount as Lender has advanced to Borrower, together with interest as set forth in that certain Loan and Security Agreement dated October 1, 2018, by and among Borrower, its Domestic Subsidiaries party thereto and Lender (as the same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”).
This Promissory Note is the Term Note referred to in, and is executed and delivered in connection with, the Loan Agreement, and is entitled to the benefit and security of the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), to which reference is made for a statement of all of the terms and conditions thereof. All payments shall be made in accordance with the Loan Agreement. All terms defined in the Loan Agreement shall have the same definitions when used herein, unless otherwise defined herein. An Event of Default under the Loan Agreement shall constitute an Event of Default under this Promissory Note.
Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest under the UCC or any applicable law. Borrower agrees to make all payments under this Promissory Note without setoff, recoupment or deduction and regardless of any counterclaim or defense. This Promissory Note has been negotiated and delivered to Lender and is payable in the State of Florida. This Promissory Note shall be governed by and construed and enforced in accordance with, the laws of the State of Florida, excluding any conflicts of law rules or principles that would cause the application of the laws of any other jurisdiction.
BORROWER FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES:
| ONDAS HOLDINGS INC. | ||
| By: | /s/ Eric A. Brock | |
| Eric A. Brock, Chief Executive Officer | ||