Item 1.01.
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Entry into a Material Definitive Agreement.
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On June 1, 2018, InfoSonics Corporation
(the “Company”) entered into one or more subscription agreements (each, a “Subscription Agreement”) with certain purchasers, relating to the sale and issuance by the Company of units (“Units”) of securities of the Company comprised of (i) one share of common stock of the Company, par value $0.001 (“Common Stock”) or one share of 0% Series A Convertible Preferred Stock of the Company, par value $0.001 per share, which is convertible into shares of Common Stock (“Preferred Stock”), and (ii) one warrant to purchase one share of Common Stock with an exercise price equal to $3.02 per share, subject to adjustment therein (“Warrant”), for a Unit purchase price of $3.14 per Unit. The Company sold 1,183,116 Units in total for an aggregate capital raise of approximately $3,715,000, as provided in more detail below.
Of the aggregate 1,883,116 Units sold by the Company, 885,346 Units were comprised of (i) one share of Common Stock and (ii) one Warrant. The 885,346 shares of Common Stock contained in these Units were sold
in a transaction registered pursuant to a Form S-3 registration statement (the “Offering”). The Common Stock sold pursuant to the Offering was sold at $3.01 per share, for an aggregate capital raise of approximately $2,665,000. The shares of Common Stock are being issued pursuant to an effective shelf registration statement on Form S-3 that the Company filed with the Securities and Exchange Commission (the “SEC”) on May 27, 2015, which is effective as of June 5, 2015 (File No. 333-204469) (the “Registration Statement”). Two prospectus supplements relating to the Offering have been filed with the SEC.
Of the aggregate 1,883,116 Units sold by the Company, 297,770 Units were comprised of (i) one share of Preferred Stock and (ii) one Warrant.
The 297,770 shares of Preferred Stock contained in these Units were sold in a transaction pursuant to a private placement (“Private Placement”). The Preferred Stock sold pursuant to the Private Placement was sold at $3.01 per share, for an aggregate capital raise of approximately $896,000. The shares of Preferred Stock are being issued pursuant to an exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) contained in Section 4(a)(2) thereof and Regulation D thereunder.
Of the aggregate 1,883,116 Units sold by the Company, all such units were comprised of Warrants, as described above. The 1,183,116 Warrants
were sold to the purchasers in a transaction pursuant to the Private Placement. The Warrants sold pursuant to the Private Placement were sold at $0.13 per Warrant, for an aggregate capital raise of approximately $154,000. The Warrants are being issued pursuant to an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and Regulation D thereunder. Subject to the purchaser not owning more than 4.99% of the aggregate outstanding shares of Company common stock following the purchaser’s exercise of the Warrants, the Warrants shall be exercisable commencing six months from the date hereof and have a term of exercise equal to three years from the date of issuance.
The Company intends to use the approximately $3,715,000 in net proceeds from the sale of Units towards working capital and for other general corporate purposes. The Subscription Agreements contain customary representations, warranties and agreements by the purchaser.
The foregoing descriptions of the Subscription Agreements and the Warrants do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the full text of each such document, the forms of which are attached hereto as Exhibit 10.1 and Exhibit 4.1, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference.
The legal opinion of Perkins Coie LLP relating to the issuance and sale of the securities in the Offering is attached as Exhibit 5.1 to this Current Report on Form 8-K.