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SKYLINE MEDICAL INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Material Modification to Rights of Security Holders, Other Events, Financial Statements and Exhibits

July 24, 2014

Item 1.01 Entry into a Material Definitive Agreement.

The information included in Item 2.03 and Item 3.03 below is incorporated into this Item 1.01 by this reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an

Off- Balance Sheet Arrangement of a Registrant.



Securities Purchase Agreements

On July 23, 2014, Skyline Medical Inc. (the "Company") entered into a Securities Purchase Agreement (the "Investor Securities Purchase Agreement") with an institutional investor (the "Investor"), pursuant to which the Company agreed to issue and sell (i) a senior convertible note, in an original principal amount of $610,978 (the "Investor Note"), which Investor Note shall be convertible into a certain amount of shares (the "Investor Conversion Shares") of the Company's common stock, par value $0.01 (the "Common Stock"), in accordance with the terms of the Investor Note, and (ii) a warrant (the "Investor Warrant") to initially acquire up to 2,036,593 additional shares of Common Stock (the "Investor Warrant Shares", and collectively with the Investor Note, the Investor Warrant and the Investor Conversion Shares, the "Investor Securities") for an aggregate purchase price of $500,000 (an approximately 22.2% original issue discount) (the "Investor Convertible Notes Offering").

On July 23, 2014, the Company also entered into a Securities Purchase Agreement (the "SOK Securities Purchase Agreement") with SOK Partners, LLC, an affiliate of the Company ("SOK"), pursuant to which the Company agreed to issue and sell (i) a senior convertible note, in an original principal amount of $122,195.60 (the "SOK Note"), which SOK Note shall be convertible into a certain amount of shares (the "SOK Conversion Shares") of Common Stock, in accordance with the terms of the SOK Note, and (ii) a warrant (the "SOK Warrant") to initially acquire up to 407,318 additional shares of Common Stock (the "SOK Warrant Shares", and collectively with the SOK Note, the SOK Warrant and the SOK Conversion Shares, the "SOK Securities") for an aggregate purchase price of $100,000 (an approximately 22.2% original issue discount) (the "SOK Convertible Notes Offering").

The SOK Note, the SOK Warrant, the SOK Securities Purchase Agreement and the SOK Registration Rights Agreement contain terms and conditions substantially identical to that of the Investor Note, the Investor Warrant, the Investor Securities Purchase Agreement and the Investor Registration Rights Agreement (as defined below), respectively, which are described in greater detail below.

In addition to the Investor Convertible Notes Offering and the SOK Convertible Notes Offering, the Company may enter into one or more additional Securities Purchase Agreements (collectively, the "Affiliate Securities Purchase Agreements") with certain affiliates of the Company and certain persons with whom the Company has a pre-existing relationship (the "Affiliates") pursuant to which the Company may issue and sell (i) one or more senior convertible notes, in an original principal amount of up to $1,099,760.40 (the "Affiliate Notes"), which Affiliate Notes shall be convertible into a certain amount of shares (the "Affiliate Conversion Shares") of the Company's Common Stock in accordance with the terms of the Affiliate Notes, and (ii) one or more warrants (the "Affiliate Warrants") to initially acquire up to 3,665,862 additional shares of Common Stock (the "Affiliate Warrant Shares", and collectively with the Affiliate Notes, the Affiliate Warrants and the Affiliate Conversion Shares, the "Affiliate Securities") for an aggregate purchase price of $900,000 (with the same original issue discount as specified for the Investor Note and SOK Note) (the "Affiliate Convertible Notes Offering").

Except for the maturity date of the Affiliate Notes and the expiration date of the Affiliate Warrants, the Affiliate Notes, the Affiliate Warrants, the Affiliate Securities Purchase Agreements and the registration rights agreement(s) to be entered into between the Company and the Affiliates, relating to the Affiliate Conversion Shares and Affiliate Warrant Shares, will have terms and conditions identical to that of the Investor Note, the Investor Warrant, the Investor Securities Purchase Agreement and the Investor Registration Rights Agreement (as defined below), respectively, which are described in greater detail below.

The Investor Security Purchase Agreement and the SOK Security Purchase Agreement are collectively referred to herein as the "Security Purchase Agreements." The Investor Note and the SOK Note are collectively referred to herein as the "Notes." The Investor Warrant and the SOK Warrant are collectively referred to herein as the "Warrants." The Investor Securities and the SOK Securities are collectively referred to herein as the "Securities." The Investor Convertible Notes Offering, the SOK Convertible Notes Offering, and the Affiliate Convertible Notes Offering are collectively referred to herein as the "Convertible Notes Offering." The Investor Conversion Shares, SOK Conversion Shares, Affiliate Conversion Shares, Investor Warrant Shares, SOK Warrant Shares, and Affiliate Shares are collectively referred to herein as the "Additional Shares." There is no guarantee that the Company will consummate the Affiliate Convertible Notes Offering as described or that such Affiliate Convertible Notes Offering will occur at all.

Convertible Notes



The Notes mature on July 23, 2015 (subject to extension as provided in the Notes) and, in addition to the approximately 22.2% original issue discount, accrues interest at a rate of 12.0% per annum. The Investor and SOK have no voting rights as the holders of the Notes. Upon conversion of the Notes, the holders are entitled to receive such dividends paid and distributions made to the holders of Common Stock from and after the initial issuance date of the . . .

Item 3.03 Material Modification of Rights of Security Holders.

As of July 23, 2014, in connection with the Convertible Notes Offering, the Company and the holders of at least the minimum number of shares of the Company's Series A Convertible Preferred Stock, par value $0.01 (the "Preferred Stock"), required to (i) waive certain covenants under the securities purchase agreement, dated February 4, 2014 (the "Preferred Stock SPA"), by and among the Company and the purchasers named on Schedule I thereto (the "Preferred Stockholders"), and (ii) consent to the automatic conversion of all outstanding shares of Preferred Stock pursuant to Section 6(d) of the Certificate of Designation, filed January 27, 2014, setting forth the preferences, rights and limitations of the Preferred Stock (the "Certificate of Designation"), agreed to the following:

a waiver of the Company's obligation under Section 6.12 of the Preferred Stock

SPA to not enter into any contract, transaction or arrangement or issue any security or instrument that provides for forward pricing of shares of Common Stock (the "Forward Pricing Transaction Restriction") with respect to the Convertible Notes Offering and, following a Qualified Public Offering (as defined below), a waiver of the Forward Pricing Transaction Restriction for any subsequent offering of securities by the Company;



a consent to the inclusion of the registration of the Additional Shares on a

registration statement or registration statements of the Company to be filed under the Securities Act of 1933, as amended, pursuant to Section 10 of the Preferred Stock SPA (the "Registration Statement"), covering the "Registrable Securities" as defined under the Preferred Stock SPA (the "Preferred Stockholders Registrable Securities");



a consent to further extend the Filing Deadline and the Effectiveness Deadline

(each as defined in the Certificate of Designation) pursuant to Section 10.1 of the Preferred Stock SPA such that the deadlines for the filing and effectiveness of the Registration Statement shall be the same as the applicable deadlines for the Convertible Notes Offering;



an agreement by the Preferred Stockholders to a 90-day lock-up beginning from

the date of closing of an underwritten public offering of the Common Stock with gross offering proceeds of at least $6.0 million and the concurrent listing of the Common Stock on a national securities exchange (a "Qualified Public Offering") (the "Purchaser Lock-Up"); and



a consent to automatically convert all outstanding shares of Preferred Stock

upon a Qualified Public Offering pursuant to the Certificate of Designation as

described further below.



In consideration of the waiver and consents provided by the Preferred Stockholders, the Company agreed:

to issue additional shares of Common Stock to the Preferred Stockholders (A)

automatically upon the closing of a Qualified Public Offering, to the extent that (i) the Qualified Public Offering closes within six (6) months of the first closing of the Convertible Notes Offering ("Qualified Public Offering Deadline") and (ii) 70% of the public offering price per share of the Common Stock in the Qualified Public Offering (the "QPO Discount Price") is less than the Conversion Price floor contained in Section 7(e)(i) of the Certificate of Designation (the "Conversion Price Floor"), or (B) if a Qualified Public Offering has not been consummated by the Qualified Public Offering Deadline, upon the Preferred Stockholders' conversion of their shares of Preferred Stock to the extent that 70% of the volume weighted average price of the Common Stock on the principal Trading Market (as defined in the Certificate of Designation) of the Common Stock during the ten Trading Days (as defined in the Certificate of Designation) immediately preceding the Qualified Public Offering Deadline (the "Non-QPO Discount Price") is less than the Conversion Price Floor;



to provide the Preferred Stockholders with the right to participate in the

Affiliate Convertible Notes Offering pro rata up to an aggregate of $500,000 based on their respective interests in the Preferred Stock; and



to pay reasonable attorneys' fees and expenses of the Preferred Stockholders in

connection with certain transactions as described further in the waiver and consent of, and notice to, holder of preferred stock (the "Waiver and Consent").



The foregoing description of the Waiver and Consent does not purport to be complete, and is qualified in its entirety by reference to the form of such document filed as Exhibit 4.4 and incorporated herein by reference.

Item 8.01 Other Events.



On July 24, 2014, the Company issued the press release announcing the issuance of the Notes and the Warrants to the Investor and SOK, a copy of which is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.



Exhibit No. Description/Exhibit

4.1 Form of Senior Convertible Note

4.2 Form of Warrant



4.3 Form of Registration Rights Agreement

4.4 Form Waiver and Consent of, and Notice to, Holder of Preferred Stock of the

Company



10.1 Form of Securities Purchase Agreement

99.1 Press Release, dated July 24, 2014, announcing the closing of the offering

of the Securities


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Source: Edgar Glimpses


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