Item
1.01 Entry Into Material Definitive Agreements.
Acquisition
of Sahara Holdings Limited
On
September 24, 2020, the Company entered into a share purchase agreement (the “Sahara SPA”) with the stockholders
(the “Sellers”) of Sahara Holdings Limited, a private limited company operating under the laws of the UK (“Sahara”),
pursuant to which the Company purchased 100% of the outstanding shares of Sahara, thereby acquiring Sahara, its operating company,
Sahara Presentations Limited PLC, a UK private limited company and its subsidiaries (together with “Sahara,” the “Sahara
Entities”). Sahara Presentations is a cutting-edge audio visual technology company operating out of Dartford, England, with
operations in the U.K., the Netherlands, Germany, Sweden, Finland and the U.S.
As
consideration for the purchase of the Sahara Entities, the Company paid to the Sellers (i) £52,000,000 in cash; (ii) 1,548,000
shares of Series B convertible preferred stock (the “Series B Preferred Stock”); and (iii) 1,290,000 shares of Series
C non-voting convertible and redeemable preferred shares (the “Series C Preferred Stock”). The Series B Preferred
Stock has a stated and liquidation value of $10.00 per share and pays a dividend out of the earnings and profits of the Company
at the rate of 8% per annum, payable quarterly. The Series B Preferred Stock is convertible into the Company’s Class A common
stock at a conversion price set at the closing price of BOXL’s Class A common stock on the Nasdaq stock market on September
25, 2020 (the “Conversion Price”) either (i) at the option of the holder at any time after January 1, 2024
or (ii) automatically upon the Company’s Class A common stock trading at 200% of the Conversion Price. The Series C Preferred
Stock has a stated and liquidation value of $10.00 per share and is convertible into the Company’s Class A common stock
at the Conversion Price either (i) at the option of the holder at any time after January 1, 2026 or (ii) automatically upon the
Company’s Class A common stock trading at 200% of the Conversion Price. In addition, the Company has agreed to issue up
to 3,000,000 restricted stock units (“RSUs”) to certain Sahara employees, which RSUs will vest in equal monthly instalments
over a period of 48-months.
To
the extent not previously converted into Conversion Shares, the outstanding shares of Series B Preferred Stock shall be redeemable
at the option of the Holders at any time or from time to time commencing on January 1, 2024, upon thirty (30) days prior written
notice to the Holders, for a redemption price, payable in cash, equal to sum of (a) Ten ($10.00) multiplied by the number of shares
of Series B Preferred Stock being redeemed (the “Redeemed Shares”), plus (b) all accrued and unpaid dividends, if
any, on such Redeemed Shares. The Series C Preferred Stock is also subject to redemption on the same terms commencing January
1, 2026.
The
foregoing descriptions of the terms and conditions of the Sahara SPA, the Series B Preferred Stock and the Series C Preferred
Stock do not purport to be complete and are qualified in its entirety by reference to the Sahara SPA, the Series B Preferred Stock
certificate of designation and the Series C Preferred Stock certificate of designation, which are attached hereto as Exhibit 10.1,
Exhibit 4.1 and Exhibit 4.2, respectively, and incorporated herein by reference.
Forward-Looking
Statements
This
Current Report on Form 8-K contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, and terms such
as “anticipate,” “expect,” “intend,” “may,” “will,” “should”
or other comparable terms, involve risks and uncertainties because they relate to events and depend on circumstances that will
occur in the future. Those statements include statements regarding the intent, belief or current expectations of the Company and
members of its management, as well as the assumptions on which such statements are based. Prospective investors are cautioned
that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including
general acquisition-related risks, such as integrating acquired assets into the Company’s operations, unforeseen operating
difficulties and expenditures, and diversion of management attention, and others described in the Company’s periodic reports
filed with the Securities and Exchange Commission. There can be no assurance that the Sahara Acquisition will prove to be beneficial
to the Company. Actual results may differ materially from those contemplated by such forward-looking statements. Except as required
by federal securities law, the Company undertakes no obligation to update or revise forward-looking statements to reflect changed
conditions.
Lind
Global Asset Management Funding
As
disclosed on the Company’s Current Report on Form 8-K, dated September 22, 2020, as amended on Form 8-K/A on September
24, 2020, the Company entered into a Share Purchase Agreement with Lind Global Asset Management, LLC, a Delaware limited liability
company (“Lind”), for the purchase of a $22,000,000 secured convertible note (the “Note”) for consideration
of $20,000,0000 (“Funding”). The Company received Funding from Lind on September 22, 2020 at which time the Company
issued the Note to Lind.