Item
2.01 Completion of Acquisition or Disposition of Assets.
As
previously reported, on April 18, 2022, the Company, Headway, the Sellers and the Sellers’ Representative entered into a Stock
Purchase Agreement, pursuant to which, among other things, the Company purchased all of the issued and outstanding securities of Headway
in exchange for (i) a cash payment of $14,065.20, and (ii) 9,000,000 shares of the Company’s Series H Convertible Preferred Stock,
with a value equal to the Closing Payment, as defined in the Stock Purchase Agreement (the “Headway Acquisition”). On May
18, 2022, the Headway Acquisition closed. The purchase price in connection with the Headway Acquisition was approximately $9.0 million.
Pursuant
to the Stock Purchase Agreement and in connection with the closing of the Headway Acquisition, on May 17, 2022, the Company filed a certificate
of designation (the “Certificate of Designation”) with the Secretary of State of Delaware designating the rights, preferences
and limitations of the Series H Convertible Preferred Stock, par value $0.00001 per share (the “Series H Preferred Stock”).
The
Series H Preferred Stock issued has a stated value equal to $1.00 per share (the “Stated Value”) and is convertible into
an aggregate of approximately 3,500,000 shares of common stock, par value $0.00001 (the “Common Stock”) of the Company, at
a conversion price of $2.5714 per share, subject to certain ownership limitations. The Series H Preferred Stock may be redeemed by the
Company through a cash payment at a per share price equal to the Stated Value (including, for the avoidance of doubt, all PIK Dividends
accredited thereto, as defined in the Certificate of Designation), plus all accrued but unpaid dividends thereon (the “Redemption
Price”), at any time on or after the date of issuance. Upon the third anniversary of the date of issuance, the Company shall redeem
all of the shares of the Series H Preferred Stock at the Redemption Price, subject to certain provisions in the Limited Consent to the
Second Amended and Restated Note Purchase Agreement, dated April 18, 2022, by and between the Company and Jackson Investment Group, LLC.
The Series H Preferred Stock carries quarterly dividend rights of cash dividends accruing (i) at an annual rate per share equal to 12%
from the date of issuance and (ii) at an annual rate per share of 15%, if the Company has not redeemed all outstanding shares of Series
H Preferred Stock after the third anniversary from the date of issuance.
Subject
to certain beneficial ownership limitations, the Series H Preferred Stock shall vote on an “as converted” basis on all matters
submitted to the holders of Common Stock for approval. In addition, as long as any shares of the Series H Preferred Stock are outstanding,
the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series H Preferred
Stock, (a) alter or change adversely the powers, preferences or rights given to the Series H Preferred Stock, (b) amend its certificate
of incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series H Preferred
Stock, or (c) increase the number of authorized shares of the Series H Preferred Stock, or (d) enter into any agreement with respect
to any of the foregoing.
The
foregoing description of the Series H Preferred Stock does not purport to be complete and is qualified in its entirety by reference to
the complete text of the Certificate of Designation, a copy of which is attached hereto as Exhibit 3.1 and incorporated herein by reference.