Business Context and Reporting Period
This Form 8-K filing by Spherix Incorporated (not Dominari Holdings Inc.) reports on events occurring on March 9, 2020, with the offering closing on March 10, 2020. The filing details the entry into a Material Definitive Agreement for a registered direct offering of common stock.
Key Financial Metrics
- Gross Proceeds: Approximately $5.75 million.
- Shares Issued: 2,090,909 shares of Common Stock.
- Offering Price: $2.75 per share.
- Placement Agent Fees:
- Cash fee: 8.0% of gross proceeds.
- Management fee: $57,500 (1.0% of gross proceeds).
- Non-accountable expense allowance: $75,000.
- Clearing fee: $12,900.
- Warrants Issued to Agent: 167,273 warrants (8.0% of shares sold) with an exercise price of $3.4375 per share (125% of offering price).
Material Changes and Corrections
The filing includes a correction to a prior Current Report on Form 8-K filed on March 9, 2020. The prior report erroneously described a previous "Prior Offering" as a registered direct offering. The Company clarified that the Prior Offering was a public offering sold on a best-efforts basis. The Prior Offering involved the sale of 3,245,745 shares of Common Stock, common warrants to purchase up to 7,142,858 shares, and pre-funded warrants to purchase up to 3,897,113 shares.
Guidance, Outlook, and Restrictions
- Issuance Restrictions: The Company agreed to restrictions on the issuance and sale of Common Stock or Common Stock Equivalents for a 30-day period following the closing of the Registered Offering.
- Tail Fee: The Company agreed to pay the Placement Agent a tail fee equal to the cash and warrant compensation if capital is raised from purchasers introduced by the agent within 12 months of the engagement's expiration.
- Financial Outlook: The filing text does not provide specific revenue guidance, profit forecasts, or liquidity projections beyond the immediate proceeds from this offering.
Investor Verification Checklist
- Verify the exact net proceeds after deducting the 8.0% cash fee, management fee, expense allowance, and clearing fee.
- Confirm the dilution impact of the 167,273 Placement Agent Warrants and the 30-day issuance lock-up period.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) for specific covenants and representations.
- Clarify the status of the "Prior Offering" mentioned in the correction to understand total capital raised in March 2020.
- Check the Company's current cash position to assess liquidity following the $5.75 million gross raise.