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Item 1.01
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Entry into a Material Definitive Agreement.
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Securities Purchase Agreement
On August 31, 2021, ShiftPixy, Inc. (the “Company”)
entered into a securities purchase agreement (the “Purchase Agreement”) with a large institutional investor (the “Purchaser”)
pursuant to which the Company agreed to sell to the Purchaser an aggregate of (i) 2,850,000 shares
(the “Shares”) of its common stock, par value $0.0001 per share (the “Common
Stock”), together with warrants (the “Common Warrants”) to
purchase up to 2,850,000 shares of Common Stock, and (ii) 4,673,511 pre-funded warrants (the
“Pre-funded Warrants” and, together with the Common Warrants, the “Warrants”) with
each Pre-funded Warrant exercisable for one share of Common Stock, together with Common Warrants to purchase up to 4,673,511 shares of
Common Stock (collectively, the “Offering”). Each share of Common Stock and accompanying
Common Warrant are being sold together at a combined offering price of $1.595, and each Pre-funded Warrant and accompanying Common Warrant
are being sold together at a combined offering price of $1.5949. The Pre-funded Warrants will be immediately exercisable, at a nominal
exercise price of $0.0001, and may be exercised at any time until all of the Pre-funded Warrants are exercised in full. The Common
Warrants will have an exercise price of $1.595 per share, will be exercisable upon issuance and will expire five years from the date of
an effective registration statement covering the shares underlying the Common Warrants. The gross proceeds to the Company from the Offering
are expected to be approximately $12 million. The Offering is expected to close on or
about September 3, 2021, subject to customary closing conditions.
The Purchase Agreement contains customary representations,
warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, termination provisions,
and other obligations and rights of the parties. The representations, warranties and covenants contained in the Purchase Agreement were
made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may
be subject to limitations agreed upon by the contracting parties. The Purchase Agreement requires the Company to file a registration statement
with the U.S. Securities and Exchange Commission (the “Commission”) to register the resale by the Purchaser of the Shares
and the shares issuable upon exercise of the Warrants (the “Warrant Shares”) as soon as practicable, and in any event, no
more than fifteen (15) days after the date of closing.
The Offering is exempt from registration pursuant
to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”) and Regulation D under the Securities Act. The Shares, the Warrants, and the Warrant Shares
being sold and issued in connection with the Purchase Agreement are not registered under the Securities Act or any state securities laws
and may not be offered or sold in the United States absent registration with the Commission or an applicable exemption from the registration
requirements. The Purchaser is an “accredited investor” as such term is defined in Rule 501(a) under the Securities Act. The
Warrants are not and will not be listed for trading on any national securities exchange.
Placement Agent Agreement
A.G.P./Alliance Global Partners (the “Placement
Agent”) acted as the exclusive placement agent in connection with the Offering pursuant to the terms of a placement agent agreement,
dated August 31, 2021, between the Company and the Placement Agent (the “Placement
Agent Agreement”). Pursuant to the Placement Agent Agreement, the Company agreed to pay the Placement Agent a fee equal to 7.0%
of the aggregate gross proceeds from the Offering. In addition to the cash fee, the Company agreed to issue to the Placement Agent warrants
to purchase an aggregate of up to five percent (5%) of the aggregate number of Shares and shares of Common Stock issuable upon exercise
of the Pre-funded Warrants sold in the Offering (the “Placement Agent Warrants”). The Placement Agent Warrants shall be exercisable
for a period commencing six months from issuance and expiring four years from the effectiveness of a registration statement for the resale
of the underlying shares, and shall have an initial exercise price of $1.7545 per share.
The foregoing descriptions of the Purchase Agreement,
the Placement Agent Agreement, the Common Warrant and the Pre-funded Warrant are not complete and are qualified in their entireties by
reference to the full text of the forms of Purchase Agreement, Placement Agent Agreement, Common Warrant and Pre-funded Warrant,
copies of which are attached to this this Current Report on Form 8-K as Exhibits 10.1, 10.2, 4.1 and 4.2, respectively.