SEC Filing Summary
Registrant and period: The January 6, 2023 Form 8-K was filed by Cryptyde, Inc. (the source metadata identifies Eightco Holdings Inc.). The filing reports events occurring on January 6, 2023. Cryptyde’s common stock traded on Nasdaq under the symbol TYDE.
Material Financing Amendments
- Cryptyde entered into a Second Amendment Agreement with an accredited investor covering its January 26, 2022 Securities Purchase Agreement, senior secured convertible note, registration rights agreement, and warrants, each as previously amended.
- The conversion price for the outstanding balance of the note was voluntarily reduced to $0.20 per share.
- Cryptyde received a right to redeem all or part of the note on 10 trading days’ notice, subject to specified conditions, including no Equity Conditions Failure and sufficient resources to complete the redemption.
- Under specified market and default conditions, the investor may release cash from the note’s Control Account to Cryptyde equal to 20% of amounts converted during the applicable 10-trading-day period.
Warrant Terms and Potential Dilution
- The warrant exercise price was adjusted to $0.20 per share, and the number of underlying shares was increased to 166,666,650, subject to the investor’s waiver limiting the adjustment to no more than 111,000,000 shares.
- The investor generally may not exercise warrants for more than 75,000,000 shares before March 2, 2023, with exceptions tied to an Event of Default or specified VWAP levels.
- Warrant exercise is generally deferred until the Control Account equals or exceeds the note’s outstanding principal amount, subject to limited exceptions.
- The investor may forfeit warrants for 36,000,000 shares if the stock’s VWAP exceeds $0.22 on each trading day from January 6 through March 1, 2023, provided no specified default condition exists.
- The warrant exercise price was also voluntarily adjusted to $0.001 per share, subject to the agreement’s terms.
BHP Waiver Agreement
- Cryptyde entered into a waiver agreement with BHP Capital NY, Inc. concerning BHP’s anti-dilution and exercise rights under its warrant.
- BHP warrant shares issuable under specified anti-dilution provisions were limited to 40,000,000. If the investor forfeits 36,000,000 warrant shares, BHP will forfeit 12,972,000 shares issuable under its warrant.
- BHP generally may not exercise its warrant until the Control Account equals or exceeds the note’s outstanding principal amount, subject to limited exceptions.
- BHP may not exercise more than 27,028,000 warrant shares before March 2, 2023, unless specified VWAP conditions occur. BHP may forfeit 12,972,000 warrant shares if VWAP exceeds $0.22 on each trading day from January 6 through March 1, 2023, subject to the agreement’s conditions.
Capital Structure and Corporate Actions
- Cryptyde must solicit stockholder approval to increase authorized common shares from 250,000,000 to 500,000,000.
- The required stockholder meeting was to occur no later than April 1, 2023. If approval was not obtained, additional meetings were required every 90 days until approval was obtained.
- The amendments create or modify significant potential common-stock issuance obligations and therefore may result in substantial dilution.
Financial Metrics, Liquidity, and Outlook
The filing does not provide revenue, profit, cash flow, margin, debt-balance, liquidity, or operating guidance figures. It does disclose that the company’s ability to redeem the note depends on having sufficient resources and that the note is supported by a Control Account. No management outlook or operating forecast is provided.
Registration and Risk Considerations
- The note, warrants, and related shares were issued or deemed issuable in unregistered transactions relying on Section 4(a)(2) of the Securities Act and Regulation D.
- Key contingencies include stock-price VWAP thresholds, potential Events of Default, Equity Conditions Failures, Control Account balances, stockholder approval, and the company’s ability to fund redemptions.
- The filing’s financing terms could materially affect share count, ownership percentages, trading pressure, and dilution.
Investor Verification Checklist
- Verify the outstanding principal amount of the convertible note and the balance of the Control Account.
- Review Exhibits 10.1 and 10.2 for the complete conversion, redemption, warrant, forfeiture, and default provisions.
- Confirm whether stockholders approved the increase in authorized common shares to 500,000,000.
- Determine the number of shares issued upon note conversion or warrant exercise after January 6, 2023.
- Assess whether any Events of Default, Equity Conditions Failures, or VWAP-based triggers occurred.
- Reconcile the registrant’s name in subsequent filings, given the source metadata references Eightco Holdings Inc. while the filing identifies Cryptyde, Inc.