12. SUBSEQUENT EVENTS |
6 Months Ended |
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Nov. 30, 2020 | |
Notes | |
12. SUBSEQUENT EVENTS |
12. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date the condensed consolidated financial statements were available to be issued. Based on this evaluation, the Company has identified the following reportable subsequent events other than those disclosed elsewhere in these condensed consolidated financial statements.
Amendment to Articles of Incorporation
Effective January 11, 2021, the Company, amended and restated its articles of incorporation (the Amended and Restated Articles of Incorporation) with the office of the Secretary of State of Nevada to, among other things, (i) change the Companys name to Unique Logistics International, Inc.; and (ii) increase the number of shares of common stock the Company is authorized to issue from 500,000,000 shares to 800,000,000 shares.
Purchase Agreements
On January 28, 2021, the Company entered into a Securities Purchase Agreement (the Purchase Agreement) with Trillium Partners LP (Trillium) and 3a Capital Establishment (3a together with Trillium, the Investors) pursuant to which the Company sold to each of the Investors (i) a 10% secured subordinated convertible promissory note in the principal aggregate amount of $916,666 or $ 1,833,333 in the aggregate (each a Note and together the Notes) realizing gross proceeds of $1,666,666 (the Proceeds).
The Notes mature on January 28, 2022 (the Maturity Date) and are convertible at any time. The conversion price of the Note is $0.0032 (the Conversion Price).
Provided that the Company has satisfied all of the Equity Conditions (as defined in the Notes) the Company may deliver a notice to the Investors (an Optional Redemption Notice, of its irrevocable election to redeem some or all of the then outstanding principal or interest amount of the Notes for cash in an amount equal to the Optional Redemption Amount as further described in the Notes (the Optional Redemption Amount) on the 20th Trading Day following the Optional Redemption Notice.
If the Company or any subsidiary thereof, as applicable, at any time while the Notes are outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any common stock or common stock equivalents, at an effective price per share less than the Conversion Price then in effect other than in respect of an Exempt Issuance (as defined therein) (such lower price, the Base Share Price and such issuances collectively, a Dilutive Issuance), then simultaneously with the consummation of each Dilutive Issuance the Conversion Price shall be reduced and only reduced to equal the Base Share Price. Such adjustment shall be made whenever such common stock or common stock equivalents are issued.
Additionally, while the Notes remain outstanding the Company shall not, without prior written approval from Investors, enter into a Variable Rate Transaction (as defined in the Notes). Further, as long as the Notes remain outstanding, upon any issuance by the Company of common stock, common stock equivalents or other indebtedness or other securities, whether for cash consideration or a combination of units thereof (a Subsequent Financing), the Investors shall have the right to participate up to is Pro Rata Portion (as defined in the Purchase Agreement) of a percentage of such Subsequent Financing equal to, in the aggregate, one hundred percent (100%) in case of any offering on the same terms, conditions and price provided for in the Subsequent Financing.
In connection with the issuance of the Notes, the Company entered into a Security Agreement (the Security Agreement) by and among the Company, certain wholly owned subsidiaries of the Company (the Guarantors), as guarantors, and Trillium, whereby the Company and the Guarantors pledged and granted to Trillium for the benefit of the Investors, a lien on and security interest in all of the right, title and interest in substantially all of the assets of the Company and the Guarantors, subject to certain exceptions specified therein.
Additionally, in connection with the issuance of the Notes, the Company entered into a Guaranty Agreement (the Guaranty Agreement) by and among the Company, the Guarantors, and the Investors, whereby the Guarantors absolutely and unconditionally guarantee the payment by the Company of all amounts due with respect to the Notes and the performance by the Company of its obligations under the Notes.
The Notes are subordinated to Corefund Capital LLC.
In connection with the issuance of the Notes the Company and the Investor also entered into a registration rights agreement (Registration Rights Agreement) pursuant to which the Company has agreed to register the common stock underlying the Notes within a period of 180 days from the date of the Closing.
Further, on January 28, 2021, the Company and the Investors entered into a waiver (Waiver) waiving any and all defaults for a period of six months in connection with (i) the Purchase Agreement and Notes (ii) the securities purchase agreement (as modified from time to time, the Trillium Purchase Agreement), dated as of October 7, 2020 by and between the Company and Trillium providing for, among other things, the issuance at the applicable closing, (A) a 10% Secured Subordinated Convertible Promissory Note (as modified from time to time, the Trillium Note) and (B) Warrants to purchase shares of the Common Stock (as modified from time to time, the Trillium Warrants); and (iii) securities purchase agreement (as modified from time to time, the 3a Capital Purchase Agreement), dated as of October 14, 2020 between the Company and 3a providing for, among other things, the issuance at the applicable closing, (A) a 10% Secured Subordinated Convertible Promissory Note (as modified from time to time, the 3a Note) and (B) Warrants to purchase shares of the Common Stock (as modified from time to time, the 3a Warrants. |