Item 1.01 Entry into a Material Definitive Agreement.
Issuance of Convertible Debentures and Warrants
On March 31, 2023 (the “Effective
Date”), Near Intelligence, Inc. (the “Company”) entered into a securities purchase agreement (the
“Purchase Agreement”) with the investors listed on Schedule 1 thereto (the “Investors”),
in connection with the issuance and sale by the Company of (i) convertible debentures in an aggregate principal amount of $5,969,325 (the
“Convertible Debentures”) and (ii) warrants (the “Warrants”) to purchase an aggregate
of 149,234 shares (the “Warrant Shares”) of the Company’s common stock, par value $0.0001 per share (“Common
Stock”).
The Convertible Debentures
bear interest at an annual rate of 0.01% and will mature on the date that is 90 days after the final maturity date of the term loans issued
pursuant to that certain Financing Agreement, dated November 4, 2022 (as amended from time to time, the “Financing Agreement”),
by and among the Company’s wholly owned subsidiary, Near Intelligence LLC, as borrower, the Company, certain of the Company’s
subsidiaries party thereto as guarantors, the lenders party thereto and Blue Torch Finance LLC (“Blue Torch”),
as administrative agent and collateral agent. The maturity date may be extended at the option of the Investor. The Convertible Debentures
are subordinate to all obligations of the Company to Blue Torch under the Financing Agreement, including Blue Torch’s security interests
in the Company’s property.
Beginning 180 days after the
Effective Date, any portion of the outstanding and unpaid principal amount of the Convertible Debentures, together with any accrued but
unpaid interest, may be converted into shares of Common Stock (the “Conversion Shares”) based on a conversion
price of the lower of (i) $10.01, or (ii) 75% of the average of the daily VWAPs (as defined below) during the twenty (20) consecutive
trading days immediately preceding the conversion date or other date of determination, but not lower than a floor price of $2.06. For
purposes of the Convertible Debentures, “VWAP” means the daily dollar volume-weighted average price for such security on the
Nasdaq Global Market as reported by Bloomberg through its “Historical Prices – Px Table with Average Daily Volume” functions.
The Convertible Debentures
may not be converted into shares of Common Stock to the extent such conversion would result in the Investor and its affiliates having
beneficial ownership of more than 4.99% of the Company’s then outstanding shares of Common Stock, provided that this limitation
may be waived by the Investor upon not less than 65 days’ prior notice to the Company.
The Convertible Debentures
also contain certain representations, warranties, covenants, and events of default including, among other things, if the Company becomes
delinquent in its periodic report filings with the Securities and Exchange Commission (the “SEC”). If an event
of default occurs and is continuing, the full unpaid principal amount of the Convertible Debentures, together with interest and other
amounts owing in respect thereof, to the date of acceleration shall become, at an Investor’s election by notice to the Company,
immediately due and payable in cash.
The Warrants have an exercise
price of $0.01, subject to certain adjustments. The Warrants are exercisable into shares of Common Stock beginning on the Effective Date
and expire at 5:00 p.m. Eastern Time on the four-year anniversary of the Effective Date. No portion of the Warrants may be exercised to
the extent that, after giving effect to such exercise, the applicable Investor and its affiliates would beneficially own in excess of
4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise, provided that this limitation
may be waived by the Investor upon not less than 65 days’ prior notice to the Company.
Registration Rights Agreement
In connection with the entry
into the Purchase Agreement and the issuance of the Convertible Debentures and Warrants, the Company and each of the Investors entered
into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which the Company is
required to file a registration statement registering the resale by the Investors of the Conversion Shares and Warrant Shares under the
Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the Registration Rights Agreement, the
Company is required to meet certain obligations with respect to, among other things, the timeliness of the filing and effectiveness of
the Registration Statement (as defined in the Registration Rights Agreement). The Company is required to file such Registration Statement
no later than thirty (30) days following the Effective Date.
The foregoing is a summary
description of certain terms of the Convertible Debentures, the Warrants, the Purchase Agreement and the Registration Rights Agreement.
For a full description of all terms, please refer to the copy of such agreements that are filed as Exhibits 4.1, 4.2, 10.1 and 10.2, respectively,
to this Current Report on Form 8-K, and are incorporated herein by reference.
The representations, warranties
and covenants contained in the Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely
for the benefit of the parties to the Purchase Agreement, and may be subject to limitations agreed upon by the contracting parties. Accordingly,
the Purchase Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Purchase
Agreement, and not to provide investors with any other factual information regarding the Company or its business, and should be read in
conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.