Business Context and Reporting Period
This Form 8-K was filed on July 28, 2022, by Cryptyde, Inc. (the registrant identified in the filing; request metadata refers to Eightco Holdings Inc.). The filing reports amendments to financing arrangements with an accredited investor. The company’s common stock traded on Nasdaq under the symbol TYDE.
Material Financing Terms and Key Metrics
- The company amended a January 26, 2022 Securities Purchase Agreement, a senior secured convertible note, and a registration rights agreement.
- The note had an aggregate principal amount of $33.333 million before the amendment.
- The company may release $25.533 million on the closing date and $3.467 million, plus 50% of specified warrant exercise proceeds, after the Nasdaq approval date.
- The company must use $22.0 million of the released funds to repurchase $22.0 million of note principal from the investor.
- Warrant exercise proceeds must be deposited at 100% before the Nasdaq approval date and 50% thereafter into a restricted funds account.
- The conversion price of the remaining note balance was voluntarily adjusted to $1.06.
- The noteholder may force redemption of all or part of the outstanding principal, interest, or penalties after December 27, 2023.
Material Changes, Outlook, and Risks
- The amended note permits the company to enter technology license agreements requiring up to $10.0 million of cash payments and up to 250,000 restricted common shares, subject to specified conditions.
- Cash payments under those license agreements cannot be due until at least two years after execution, and each agreement requires an intercreditor agreement.
- The permitted lien amount on company indebtedness increased from $500,000 to $10.0 million.
- The registration rights agreement was amended to cover additional shares issuable upon conversion of the note and exercise of the warrant.
- The amendment also modified the company’s financing standstill carve-out.
- The financing creates secured debt, potential dilution from note conversion and warrant exercise, and a future redemption obligation.
- The filing provides no revenue, profit, cash flow, margin, liquidity balance, or operating guidance metrics.
Registration and Unusual Items
The note and common stock issuable upon conversion were not registered under the Securities Act or state securities laws. The company relied on the private-placement exemptions under Section 4(a)(2) and Regulation D. The complete Amendment Agreement was filed as Exhibit 10.1.
Investor Verification Items
- Confirm the closing date, Nasdaq approval date, and actual amount of funds released from the restricted account.
- Verify completion of the $22.0 million note-principal repurchase and the remaining principal balance.
- Review the final conversion and warrant terms, including potential share dilution at the $1.06 conversion price.
- Assess the company’s ability to fund the noteholder’s redemption right beginning after December 27, 2023.
- Review any technology license agreements, related payment obligations, liens, and intercreditor arrangements entered into under the amended note.
- Confirm the company’s identity and corporate name, as the filing identifies the registrant as Cryptyde, Inc., while the request metadata identifies Eightco Holdings Inc.