RECRUITER.COM GROUP, INC. : Entering a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Supporting Documentation (Form 8-K)

Section 1.01 Entering into a Material Definitive Agreement.

On August 17, 2022, Recruiter.com Group, Inc. (the “Company”) has entered into a securities purchase agreement (the “Purchase Agreement”) with three qualified investors (the “Purchasers”). Pursuant to the purchase agreement, the Company sold to the buyers a total of (i) $1,111,111 in the aggregate principal amount of the 10.0% Initial Issuance Discount Promissory Notes (the “Notes”), and (ii) 694,444 common equity warrants (the “Warrants”). The Company received a total of $1,000,000 as gross proceeds of the purchase contract, taking into account the initial issue discount of 10.0%, before deducting the offering and additional costs.

The Notes expire on August 17, 2023. The Notes bear interest at the rate of 6% per annum, subject to an increase in the event of default in payment as provided therein. The Company may redeem the Securities early at any time, without penalty.

The warrants are exercisable for five years from August 17, 2022 at an exercise price of $2.00 per share, subject to certain adjustments. 50% of BSAs acquired on August 17, 202225% of the BSAs are acquired on February 17, 2023 (if the relevant Note has not been fully redeemed by such date), and 25% of the Warrants will vest on May 17, 2023 (if the relevant Note has not been redeemed by this date).

The Purchase Agreement contains customary representations, warranties and covenants of the Company, including, without limitation and subject to certain exceptions, covenants that limit the ability of the Company and its subsidiaries, without the prior written consent of the holders notes, incur additional indebtedness, repay outstanding debt, create or authorize liens on assets, repurchase stock, pay dividends, enter into transactions with affiliated companies or effect equity financings. The Notes contain customary events of default, including, but not limited to, breach of covenants under the Purchase Agreement and/or the Notes, defaults in payment, loss of admission to negotiation on the Nasdaq Capital Markets or other applicable trading market, and the occurrence of certain change of control events. Upon the occurrence of an Event of Default, an amount equal to 112.5% ​​of the Principal Amount, accrued but unpaid interest and other amounts due under each Note will become immediately due and payable at each Investor’s option, and all amounts due under the Notes will bear interest at an increased rate.

Pursuant to the purchase agreement, purchasers have certain rights to participate in future offerings of shares of the Company or any of its subsidiaries after closing, subject to customary exceptions. The Warrants also contain certain price protection provisions providing for an adjustment to the number of Common Shares issuable upon exercise of the Warrants and to the exercise price in the event of future dilutive offerings.

Each Warrant contains conversion limitations providing that a holder thereof may not exercise such Warrant to the extent (but only to the extent) that, after giving effect to such conversion, the holder or one of its Affiliates beneficially owns more than 4.99% (“Beneficial Ownership Limitation”) of the outstanding common shares of the Company immediately after giving effect to such conversion or exercise. A holder may increase or decrease their Beneficial Ownership Limit upon notice to the Company provided that in no event shall such limit exceed 9.99%, and that any increase shall not be effective until the 61st day following such notice.

This current report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy the Notes or Warrants, and there will be no sale of the Notes or Warrants in any State or jurisdiction in which such offer, solicitation or sale would be unlawful.

The Notes and Warrants were sold pursuant to an exemption from registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and of Rule 506 of Regulation D promulgated thereunder. The investors are accredited investors who have purchased the securities as an investment in a private placement which has not involved a general solicitation. The shares issuable upon conversion of the Notes and exercise of the Warrants have not been registered under securities law and may not be offered or sold in United States in the absence of an effective registration statement or waiver of registration requirements. This current report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy, and there will be no sale of these securities in any state in which such offer, solicitation or sale would be illegal prior to registration or qualification under the securities laws of any such state.

The foregoing description of the terms of the Notes, Warrants, Purchase Agreement and the transactions contemplated by these terms does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Form, warrant, and the purchase agreement, in each case, which are filed as attachments to this current report on Form 8-K and are incorporated herein by reference.



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Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

To the extent required by Section 2.03 of Form 8-K, the information contained in Section 1.01 of this current report on Form 8-K is incorporated herein by reference.

Item 9.01 Financial statements and supporting documents



(d) Exhibits:



Exhibit     Description
  4.1         Form of Common Stock Purchase Warrant granted on August 17, 2022.
  10.1*       Securities Purchase Agreement dated August 17, 2022, by and among
            the Company and the lending parties who have executed signature pages
            thereto as purchasers.
  10.2        Form of Original Issue Discount Promissory Note dated August 17,
            2022.
104         Cover Page Interactive Data File (embedded within the Inline XBRL
            document).



* Certain appendices and exhibits have been omitted in accordance with SK Rule 601(a)(5). The company will additionally provide copies of the annexes and omitted exhibits to the Security and Exchange Commission or his staff at his request.




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