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): April 28, 2023
SKYX PLATFORMS CORP.
(Exact name of Registrant as Specified in its Charter)
| Florida | 001-41276 | 46-3645414 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
2855 W. McNab Road
Pompano Beach, Florida 33069
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (855) 759-7584
Not Applicable
(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:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| Common Stock, no par value per share | SKYX | The Nasdaq Stock Market LLC |
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 ☐
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. ☐
| Item 1.01 | Entry into a Material Definitive Agreement |
The disclosure set forth under Item 2.01 of this Current Report on Form 8-K (this “Current Report”) is incorporated by reference into this Item 1.01.
| Item 2.01 | Completion of Acquisition or Disposition of Assets |
On April 28, 2023, SKYX Platforms Corp. (the “Company”) completed its previously announced acquisition (the “Closing”) of all of the issued and outstanding shares of Belami, Inc., a California corporation (“Belami”), in accordance with the terms and conditions of the previously announced Stock Purchase Agreement, dated February 6, 2023, between the Company and the stockholders of Belami (the “Sellers”), and the Amendment as described below.
The purchase price paid at the Closing consisted of $7,000,000 in cash (which excluded, among other things, $1.0 million released to the Sellers from escrow) and an aggregate of 1,923,285 shares of the Company’s common stock. At the Closing, $750,000 of the purchase price was deposited into an escrow account, which will be held for 15 months following the Closing as a source of recourse for claims the Company may have against the Sellers under the Stock Purchase Agreement. Prior to the Closing, Belami issued the following promissory notes to the Sellers, which will remain in place following the Closing and will be guaranteed by the Company: (i) promissory notes in an aggregate amount of $1.0 million, which have a 90-day term and an interest rate of 4.86% per annum (the “Closing Notes”); and (ii) promissory notes in the initial aggregate amount of $464,669 (the “Retained Earnings Notes”), which was equal to the difference between retained earnings, on the one hand, and the cash and Closing Notes distributed to the Sellers prior to the Closing, on the other hand, and which amount is subject to adjustment, which have a one-year term and an interest rate of 4.86% per annum.
The Company will also pay to the Sellers on the first anniversary of the Closing, or April 28, 2024, (i) $3,157,500 in cash and (ii) a number of shares of common stock equal to $5,639,446 divided by the average closing price per share of the common stock on The Nasdaq Stock Market LLC (“Nasdaq”) for the 20 trading days immediately preceding April 28, 2024, subject to a minimum price per share of $3.00 and a maximum price per share of $4.00. The deferred payment will be increased or decreased by the amount of a working capital adjustment, as provided for in the Stock Purchase Agreement, and will be subject to offset for indemnification claims. Any payment of the working capital adjustment by the Company will be paid one-third in cash and two-thirds in common stock, equal to such adjustment amount divided by the average closing price per share of common stock on Nasdaq for the 20 trading days immediately preceding the date of the post-closing adjustment, up to 100,000 shares of common stock (with any additional amount to be paid in cash).
Belami’s loan agreement with PNC Bank, National Association was repaid in full prior to the Closing.
In connection with the Closing, on April 28, 2023, the Company entered into the first amendment to the Stock Purchase Agreement (the “Amendment”). Among other things, the Amendment revised (i) the amount of closing consideration, deferred consideration, and pre-closing distribution payable to the Sellers, including providing for the Closing Notes, as described above, (ii) the definition of retained earnings and (iii) the number of equity awards issuable to certain employees and consultants of Belami, as described below.
In connection with the Closing, Belami, as a wholly-owned subsidiary of the Company, agreed to enter into employment agreements with certain employees of Belami. The Company also agreed to pay cash bonuses and to grant the following equity awards to certain employees and consultants of Belami: 735,375 restricted stock units, which will vest on April 28, 2024; 568,927 restricted shares, which will vest on the date of grant; up to 150,000 restricted stock units, which will vest in three equal annual installments on the anniversary of the grant date, beginning with the first anniversary of the grant date; and five-year options to purchase up to 150,000 shares of common stock, which will vest and become exercisable in three equal annual installments beginning on the first anniversary of the date of grant. In each case, the equity grants are subject to the recommendation of the Compensation Committee of the Company’s Board of Directors and will be made under the Company’s equity incentive plans.
The above descriptions of the Stock Purchase Agreement, as amended by the Amendment, the Closing Notes and the Retained Earnings Notes do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Stock Purchase Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on February 7, 2023, and the full text of the Amendment, the Closing Notes, and the Retained Earnings Notes, copies of which are filed as Exhibit 2.2, Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report and are incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant |
The disclosure set forth under Item 2.01 of this Current Report is incorporated by reference into this Item 2.03.
| Item 3.02 | Unregistered Sales of Equity Securities |
The disclosure set forth under Item 2.01 of this Current Report is incorporated by reference in this Item 3.02. The issuance of shares of common stock upon the Closing was deemed to be exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, including Regulation D and Rule 506 promulgated thereunder, as transactions by the Company not involving a public offering.
Forward-Looking Statements
Certain statements made in this Current Report and exhibits are not based on historical facts, but are forward-looking statements. These statements can be identified by the use of forward-looking terminology such as “aim,” “anticipate,” “believe,” “can,” “could,” “continue,” “estimate,” “expect,” “evaluate,” “forecast,” “guidance,” “intend,” “likely,” “may,” “might,” “objective,” “ongoing,” “outlook,” “plan,” “potential,” “predict,” “probable,” “project,” “seek,” “should,” “target” “view,” “will,” or “would,” or the negative thereof or other variations thereon or comparable terminology, although not all forward-looking statements contain these words. These statements reflect the Company’s reasonable judgment with respect to future events and are subject to risks, uncertainties and other factors, many of which have outcomes difficult to predict and may be outside our control, that could cause actual results or outcomes to differ materially from those in the forward-looking statements. Such risks and uncertainties include risks arising from the diversion of management’s attention from the Company’s ongoing business operations, risks that the acquisition disrupts current plans and operations of the Company or Belami and potential difficulties in Company or Belami employee retention as a result of the acquisition, and the ability to implement business plans, forecasts and other expectations after Closing, realize the intended benefits of the acquisition, and identify and realize additional opportunities following the acquisition, as well as the other risks and uncertainties identified in filings by the Company with the SEC, including its periodic reports on Form 10-K and Form 10-Q. Investors should not rely on the financial information regarding Belami, including the revenue numbers for 2022, or any pro formas filed by the Company, as indicative of any future performance. Future performance could differ in material ways. Investors should expect quarter-to-quarter and year-to-year fluctuations. Any forward-looking statement speaks only as of the date of this Current Report, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by U.S. federal securities laws.
| Item 9.01 | Financial Statements and Exhibits. |
(a) Financial Statements of Businesses Acquired
The financial statements required by this item are not being filed herewith. To the extent such information is required by this item, it will be filed with the SEC by amendment to this Current Report no later than 71 days after the date on which this Current Report is required to be filed.
(b) Pro Forma Financial Information
The pro forma financial information required by this item is not being filed herewith. To the extent such information is required by this item, it will be filed with the SEC by amendment to this Current Report no later than 71 days after the date on which this Current Report is required to be filed.
(d) Exhibits
* Certain of the exhibits and schedules to this exhibit 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.
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.
| SKYX PLATFORMS CORP. | ||
| Date: May 1, 2023 | By: | /s/ John P. Campi |
| Name: | John P. Campi | |
| Title: | Chief Executive Officer | |
Exhibit 2.2
FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this “Amendment”) is entered into and effective as of April 28, 2023, by and among Skyx Platforms Corp., a Florida corporation (“Buyer”); and Mihran Berejikian, Nancy Berejikian, and Michael Lack (each a “Seller” and collectively the “Sellers”).
RECITALS
A. Buyer and Sellers entered into that certain Stock Purchase Agreement, dated as of February 6, 2023 (as amended, modified, restated and supplemented, the “Purchase Agreement”).
B. Buyer and Sellers now desire to amend the Purchase Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
AGREEMENT
1. Retained Earnings. The definition of Retained Earnings is hereby deleted in its entirety and replaced with the following:
““Retained Earnings” shall mean the retained earnings of the Company as of immediately prior to the Closing, calculated in accordance with GAAP, excluding any ERC and excluding any reduction for a $201,150 treasury stock entry related to the Company’s 2010 stock repurchase from a former stockholder.”
2. Cash Distribution.
(a) Section 2.3 of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
““2.3 Cash Distribution. Prior to the Closing, the Company has made the Pre-Closing Cash Distribution to the Sellers, $1,000,000 of which was paid in the form of promissory notes in an aggregate principal amount of $1,000,000, with a ninety (90)-day term and an interest rate equal to the short-term Applicable Federal Rate then in effect (the “Short-Term Notes”) and the remainder of which was paid by wire transfer of immediately available funds in the amount of Cash less $1,000,000 and the balance of the Retained Earnings (as set out in the Closing Notice) was paid to the Sellers in the form of promissory notes, in an aggregate principal amount equal to the positive difference, if any, between (i) the Retained Earnings as shown in the Closing Notice and (ii) the Cash shown in the Closing Notice less $1,000,000, with a term of one year and an interest rate equal to the short-term Applicable Federal Rate then in effect (such promissory notes, collectively the “Seller Notes”). The Buyer hereby unconditionally guarantees the payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of the Company owing to the Sellers now or hereafter existing under the Seller Notes and the Short-Term Notes, interest, principal or otherwise.”
(b) The definition of “Permitted Indebtedness” in the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
“Permitted Indebtedness” shall mean the Seller Notes and the Short-Term Notes.
3. Taxes. The second sentence of Section 4.11(a) of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
“Except as set forth in Schedule 4.11(a) of the Disclosure Schedules, the Company and the Subsidiaries are not currently the beneficiary of any extension of time within which to file any Tax Return.”
4. Option Grants and Restricted Stock Unit Grants.
(a) Section 7.12 of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
“At such times and in such amounts as are set forth on Schedule 7.12, following confirmation by the Compensation Committee of Buyer that the obligations described in this Section 7.12 comport with applicable fiduciary duties within ten (10) Business Days following the Closing, the Compensation Committee of Buyer shall grant such stock options and such shares of Restricted Stock Units (which, in any event, will convert to unrestricted shares of Buyer Common Stock upon vesting) to certain employees, consultants or directors as set forth on Schedule 7.12, subject to such individuals being employees, consultants or directors of Buyer, the Company or one of the Subsidiaries on such grant date, as set forth on Schedule 7.12. All such grants shall be made only to those persons who provide bona fide services to the Buyer, the Company or one of the Subsidiaries following the Closing, shall be subject to equal three-year vesting terms as set by the Compensation Committee of the Board of Directors of the Buyer, and shall be subject to agreements evidencing such awards on the form as filed with the SEC (except that such forms shall provide for forfeiture only upon a termination for cause or if such individual voluntarily terminates their employment without good reason), as well as the terms of Buyer’s equity plans, including the share limits under such plans and applicable registration statements, and shall further be subject to applicable Legal Requirements. Notwithstanding the foregoing, in the event Buyer reasonably determines that fulfilling its obligations (or those of the Compensation Committee of Buyer) under this Section 7.12 will result in a failure to exercise, discharge, or satisfy any fiduciary duties, Buyer and Sellers shall negotiate in good faith to modify this Section 7.12 to achieve the original intent of the parties as closely as possible.”
(b) Schedule 7.12 of the Purchase Agreement is hereby deleted in its entirety and replaced with Exhibit A attached hereto.
5. Additional Compensatory Bonuses and Buyer Common Stock Grants.
(a) The definition of “Closing Equity Consideration” in the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
““Closing Equity Consideration” shall mean a number of validly issued, fully paid and non-assessable shares of Buyer Common Stock determined by dividing (a) $6,173,744 by (b) the Buyer Stock Price.”
(b) The definition of “Deferred Payment” in the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
““Deferred Payment” shall mean $3,157,500 in cash and (ii) the Deferred Equity Consideration, as adjusted pursuant to Section 2.8 and Section 6.2(b).”
(c) The definition of “Deferred Equity Consideration” in the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
““Deferred Equity Consideration” shall mean a number of validly issued, fully paid and non-assessable shares of Buyer Common Stock determined by dividing (a) $5,639,446 by (b) the Buyer Stock Price; provided that (i) if the Buyer Stock Price for purposes of the calculation of the Deferred Equity Consideration is determined to be less than $3.00 per share, then the Buyer Stock Price shall be $3.00 per share, and (ii) if the Buyer Stock Price for purposes of the calculation of the Deferred Equity Consideration is determined to be more than $4.00 per share, then the Buyer Stock Price shall be $4.00.”
(d) Section 7.13 of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
“At such times and in such amounts as are set forth on Schedule 7.13, following confirmation by the Compensation Committee of Buyer that the obligations described in this Section 7.13 comport with applicable fiduciary duties within ten (10) Business Days following the Closing, Buyer shall pay on behalf of the Company such compensatory bonuses in cash (to the Company’s payroll provider for the benefit of the applicable employees, consultants and directors) or grant such shares of Buyer Common Stock and restricted Buyer Common Stock or equivalent Restricted Stock Units (which, in any event, will convert to unrestricted shares of Buyer Common Stock upon vesting) to certain employees, consultants or directors as set forth on Schedule 7.13, subject to such individuals being employees, consultants or directors of Buyer, the Company or one of the Subsidiaries at the time of payment, issuance and/or grant, as set forth on Schedule 7.13. All such payments, issuances and grants shall be subject to agreements evidencing such awards on the form as filed with the SEC (except that such forms shall provide for forfeiture only upon a termination for cause or if such individual voluntarily terminates their employment without good reason), as well as the terms of Buyer’s equity incentive plans, including the share limits under such plans and applicable registration statements, as may be applicable, and shall further be subject to applicable Legal Requirements. Notwithstanding the foregoing, in the event Buyer reasonably determines that fulfilling its obligations (or those of the Compensation Committee of Buyer) under this Section 7.13 will result in a failure to exercise, discharge, or satisfy any fiduciary duties, Buyer and Sellers shall negotiate in good faith to modify this Section 7.13 to achieve the original intent of the parties as closely as possible. Notwithstanding any provision in this Agreement to the contrary, the parties acknowledge and agree that the employees, consultants and directors set forth on Schedule 7.13 are hereby designated as third party beneficiaries of this Section 7.13, entitled to enforce this Section 7.13 as if they were parties to this Agreement.”
(e) Schedule 7.13 of the Purchase Agreement is hereby deleted in its entirety and replaced with Exhibit B attached hereto.
6. Disclosure Schedules. The following Disclosure Schedules are hereby deleted in their entirety and replaced with Exhibit C attached hereto. The parties hereby agree that the Seller Notes and the Short-Term Notes are hereby deemed disclosed on the Disclosure Schedules where appropriate, including to indicate that the Seller Notes and the Short-Term Notes constitute Indebtedness of the Company and constitute a change that has occurred since November 1, 2022.
7. Ratification. Except for the modifications set forth in this Amendment, the Purchase Agreement shall remain unmodified and in full force and effect in accordance with its terms, unless and until it is further amended in accordance with the Purchase Agreement. In the event of any conflict between the terms of this Amendment and the Purchase Agreement, the provisions of this Amendment shall control. All capitalized terms used herein but not defined herein shall have the same meanings as set forth in the Purchase Agreement.
8. Entire Agreement. This Amendment, together with the Purchase Agreement and the Transaction Documents, constitute the sole and entire agreement of the parties to this Amendment with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.
9. Counterparts. This Amendment may be executed in counterparts, each of which shall for all purposes be deemed to be an original, but all of which shall together constitute but one and the same Amendment. For purposes of the execution of this Amendment, the signature of a party on any counterpart thereof transmitted by facsimile or electronic mail shall be binding with the same force and effect as if it was manually affixed to a hard copy original thereof.
10. Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
[Signature Pages Follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above.
| BUYER: | ||
| SKYX PLATFORMS CORP. | ||
| By: | /s/ John Campi | |
| Name: | John Campi | |
| Title: | Chief Executive Officer | |
| SELLERS: | |
| /s/ Mihran Berejikian | |
| MIHRAN BEREJIKIAN | |
| /s/ Nancy Berejikian | |
| NANCY BEREJIKIAN | |
| /s/ Michael Lack | |
| MICHAEL LACK |
Exhibit 10.1
SHORT-TERM PROMISSORY NOTE
FOR VALUE RECEIVED, Belami, Inc., a California corporation (the “Borrower”), hereby unconditionally promises to pay to the order of ________ (the “Noteholder”) the principal amount of $[___] (the “Loan”), together with all accrued interest thereon, as provided in this Promissory Note (this “Note”). This Note is issued on April 26, 2023 (the “Effective Date”) pursuant to Section 3.3(a) of that certain Stock Purchase Agreement, dated February 6, 2023, by and among Skyx Platforms Corp., the Noteholder, and the other Sellers party thereto, as amended (the “Purchase Agreement”). Capitalized but undefined terms used herein shall have the meanings ascribed to them in the Purchase Agreement.
1. Payment Dates.
(a) Payment Date. The aggregate unpaid principal amount of the Loan, all accrued and unpaid interest, and all other amounts payable under this Note shall be due and payable on the date that is ninety (90) days following the Effective Date.
(b) Prepayment. The Borrower may prepay the Loan in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment.
2. Interest.
(a) Interest Rate. The principal amount outstanding under this Note from time to time shall bear interest at a rate of 4.86% per annum (the “Interest Rate”), which is equal to the short-term applicable federal rate on the date hereof.
(b) Computation of Interest. All computations of interest hereunder shall be made on the basis of a year of 365/366 days, as the case may be, and the actual number of days elapsed. Interest shall begin to accrue on the Loan on the date of this Note. For any portion of the Loan that is repaid, interest shall not accrue on the date on which such payment is made.
(c) Interest Rate Limitation. If at any time the Interest Rate payable on the Loan shall exceed the maximum rate of interest permitted under applicable law, such Interest Rate shall be reduced automatically to the maximum rate permitted.
3. Payment Mechanics.
(a) Manner of Payment. All payments of principal and interest shall be made in US dollars on the date on which such payment is due. Such payments shall be made by wire transfer of immediately available funds to the Noteholder’s account at a bank specified by the Noteholder in writing to the Borrower from time to time.
(b) Business Day. Whenever any payment hereunder is due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day, and interest shall be calculated to include such extension.
4. Representations and Warranties. The Borrower and Noteholder each represent and warrant to each other that it has the requisite power and authority to execute, deliver, and perform its obligations under this Note and that it has duly executed and delivered this Note.
5. Notices. All notices and other communications relating to this Note shall be in writing and shall be deemed given upon the first to occur of (x) deposit with the United States Postal Service or overnight courier service, properly addressed and postage prepaid; (y) transmittal by facsimile or e-mail properly addressed (with written acknowledgment from the intended recipient such as “return receipt requested” function, return e-mail, or other written acknowledgment); or (z) actual receipt by an employee or agent of the other party. Notices hereunder shall be sent to the following addresses, or to such other address as such party shall specify in writing:
(a) If to the Borrower:
Belami, Inc.
3321 Power Inn Road, Suite 310
Sacramento, California 95826
Attention: Mihran Berejikian
Email: [*]
(b) If to the Noteholder:
[___]
6. Governing Law; Jurisdiction. This Note and any claim, controversy, dispute, or cause of action (whether in contract, tort, or otherwise) based on, arising out of, or relating to this Note and the transactions contemplated hereby shall be governed by and construed in accordance with the laws of the State of Florida. The Borrower irrevocably and unconditionally agrees that any action, suit, or proceeding arising from or relating to this Note may be brought in the state or federal courts located in the State of Florida.
7. Integration. This Note and the Purchase Agreement constitute the entire contract between the Borrower and the Noteholder with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect thereto.
8. Amendments and Waivers. No term of this Note may be waived, modified, or amended, except by an instrument in writing signed by the Borrower and the Noteholder. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
9. Assignment. This Note may not be assigned, transferred, or negotiated by the Noteholder, in whole or in part, without the prior written consent of the Borrower.
10. Severability. If any term or provision of this Note is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Note or render such term or provision invalid or unenforceable in any other jurisdiction.
11. Counterparts. This Note and any amendments, waivers, consents, or supplements hereto may be executed in counterparts, each of which shall constitute an original, but all of which taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Note by facsimile or in electronic (“pdf” or “tif”) format shall be as effective as delivery of a manually executed counterpart of this Note.
[Signature Page Follows]
| 2 |
IN WITNESS WHEREOF, the Borrower and the Noteholder have executed this Note as of the Effective Date.
| BELAMI, INC. | ||
| By: | ||
| Name: | Mihran Berejikian | |
| Title: | President, Chief Executive Officer, and Secretary | |
| ACKNOWLEDGED AND ACCEPTED BY: | ||
| [___] | ||
[Signature Page to Short-Term Promissory Note]
Exhibit 10.2
PROMISSORY NOTE
FOR VALUE RECEIVED, Belami, Inc., a California corporation (the “Borrower”), hereby unconditionally promises to pay to the order of [___] (the “Noteholder”) the principal amount of $[___], subject to adjustment pursuant to Section 1 hereof (the “Loan”), together with all accrued interest thereon, as provided in this Promissory Note (this “Note”). This Note is issued on April 26, 2023 (the “Effective Date”) pursuant to Section 2.3 of that certain Stock Purchase Agreement, dated February 6, 2023, by and among Skyx Platforms Corp., the Noteholder, and the other Sellers party thereto, as amended (the “Purchase Agreement”). Capitalized but undefined terms used herein shall have the meanings ascribed to them in the Purchase Agreement.
1. Adjustment. Notwithstanding anything to the contrary in the Purchase Agreement, the principal amount of this Note shall be adjusted as follows:
(a) Within 90 days after the Effective Date, the Borrower shall deliver to the Noteholder the Borrower’s calculation of (i) Retained Earnings (“Closing Retained Earnings”) and (ii) the aggregate amount by which Closing Retained Earnings exceeds Cash shown in the Closing Notice (the “Total Adjusted Seller Note Principal”).
(b) After receipt of the Borrower’s calculation of Closing Retained Earnings and the Total Adjusted Seller Note Principal, the Noteholder shall have the opportunity to review and object to such calculations following the procedures set out in Section 2.5(b) of the Purchase Agreement.
(c) Once the Closing Retained Earnings and Total Adjusted Seller Note Principal amounts are finally determined (either by mutual agreement of the Borrower and the Noteholder, because the Noteholder does not timely object to the Borrower’s calculation, or as finally determined by the Independent Accountant) (such amounts, respectively, “Final Closing Retained Earnings” and “Final Total Adjusted Seller Note Principal”), then the principal amount of this Note shall be adjusted pursuant to Section 1(d) below.
(d) If the Final Total Adjusted Seller Note Principal exceeds the aggregate principal amount of the Seller Notes issued at Closing (the “Total Closing Seller Note Principal”), then the principal amount of this Note shall be increased by an amount equal to: (x) the amount of such excess of Final Total Adjusted Seller Note Principal over the Total Closing Seller Note Principal times (y) [______]. If the Total Closing Seller Note Principal exceeds Final Total Adjusted Seller Note Principal, then the principal amount of this Note shall be decreased by an amount equal to: (x) the amount of such excess of Total Closing Seller Note Principal minus Final Total Adjusted Seller Note Principal times (y) [______]. If the Total Closing Seller Note Principal is equal to the Final Total Adjusted Seller Note Principal, then there shall be no adjustment to the principal amount of this Note.
2. Payment Dates.
(a) Payment Date. The aggregate unpaid principal amount of the Loan, all accrued and unpaid interest, and all other amounts payable under this Note shall be due and payable on the first anniversary of the Effective Date.
(b) Prepayment. The Borrower may prepay the Loan in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment.
3. Interest.
(a) Interest Rate. The principal amount outstanding under this Note from time to time shall bear interest at a rate of 4.86% per annum (the “Interest Rate”), which is equal to the short-term applicable federal rate on the date hereof.
(b) Computation of Interest. All computations of interest hereunder shall be made on the basis of a year of 365/366 days, as the case may be, and the actual number of days elapsed. Interest shall begin to accrue on the Loan on the date of this Note. For any portion of the Loan that is repaid, interest shall not accrue on the date on which such payment is made.
(c) Interest Rate Limitation. If at any time the Interest Rate payable on the Loan shall exceed the maximum rate of interest permitted under applicable law, such Interest Rate shall be reduced automatically to the maximum rate permitted.
4. Payment Mechanics.
(a) Manner of Payment. All payments of principal and interest shall be made in US dollars on the date on which such payment is due. Such payments shall be made by wire transfer of immediately available funds to the Noteholder’s account at a bank specified by the Noteholder in writing to the Borrower from time to time.
(b) Business Day. Whenever any payment hereunder is due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day, and interest shall be calculated to include such extension.
5. Representations and Warranties. The Borrower and Noteholder each represent and warrant to each other that it has the requisite power and authority to execute, deliver, and perform its obligations under this Note and that it has duly executed and delivered this Note.
6. Notices. All notices and other communications relating to this Note shall be in writing and shall be deemed given upon the first to occur of (x) deposit with the United States Postal Service or overnight courier service, properly addressed and postage prepaid; (y) transmittal by facsimile or e-mail properly addressed (with written acknowledgment from the intended recipient such as “return receipt requested” function, return e-mail, or other written acknowledgment); or (z) actual receipt by an employee or agent of the other party. Notices hereunder shall be sent to the following addresses, or to such other address as such party shall specify in writing:
(a) If to the Borrower:
Belami, Inc.
3321 Power Inn Road, Suite 310
Sacramento, California 95826
Attention: Mihran Berejikian
Email: [*]
(b) If to the Noteholder:
[___]
7. Governing Law; Jurisdiction. This Note and any claim, controversy, dispute, or cause of action (whether in contract, tort, or otherwise) based on, arising out of, or relating to this Note and the transactions contemplated hereby shall be governed by and construed in accordance with the laws of the State of Florida. The Borrower irrevocably and unconditionally agrees that any action, suit, or proceeding arising from or relating to this Note may be brought in the state or federal courts located in the State of Florida.
8. Integration. This Note and the Purchase Agreement constitute the entire contract between the Borrower and the Noteholder with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect thereto.
9. Amendments and Waivers. No term of this Note may be waived, modified, or amended, except by an instrument in writing signed by the Borrower and the Noteholder. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
10. Assignment. This Note may not be assigned, transferred, or negotiated by the Noteholder, in whole or in part, without the prior written consent of the Borrower.
11. Severability. If any term or provision of this Note is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Note or render such term or provision invalid or unenforceable in any other jurisdiction.
12. Counterparts. This Note and any amendments, waivers, consents, or supplements hereto may be executed in counterparts, each of which shall constitute an original, but all of which taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Note by facsimile or in electronic (“pdf” or “tif”) format shall be as effective as delivery of a manually executed counterpart of this Note.
[Signature Page Follows]
| 2 |
IN WITNESS WHEREOF, the Borrower and the Noteholder have executed this Note as of the Effective Date.
| BELAMI, INC. | ||
| By: | ||
| Name: | Mihran Berejikian | |
| Title: | President, Chief Executive Officer, and Secretary | |
| ACKNOWLEDGED AND ACCEPTED BY: | ||
| [___] | ||
[Signature Page to Retained Earnings Promissory Note]