Item
1.01 Entry into a Material Definitive Agreement.
On
July 12, 2021 (the “Effective Date”), Presidio Property Trust, Inc., a Maryland corporation (the “Company”) entered
into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”)
for the purpose of raising approximately $9.9 million in gross proceeds for the Company.
Pursuant to the terms of the Purchase Agreement, the Company agreed to sell (A) in a registered
direct offering (i) 1,000,000 shares (the “Public Shares”) of its Series A Common Stock, par value $0.01 per share
(the “Series A Common Stock”) and (ii) pre-funded warrants to purchase up to 1,000,000 shares (the “Pre-Funded Warrant
Shares”) of Series A Common Stock (the “Pre-Funded Warrants”) and (B) in a concurrent private placement, warrants to
purchase up to 2,000,000 shares (the “Warrant Shares”) of Series A Common Stock (the “Common Stock Warrants,”
and together with the Public Shares and the Pre-Funded Warrants, the “Securities”) (the “Offering”). Each Public
Share and accompanying Common Stock Warrant are being sold together at a combined offering price of $5.00, and each Public Share and
accompanying Pre-Funded Warrant are being sold together at a combined offering price of $4.99. The Pre-Funded Warrants will be immediately
exercisable at a nominal exercise price of $0.01 and may be exercised at any time until all of the Pre-Funded Warrants are exercised
in full. The Common Stock Warrants will have an exercise price of $5.50 per share, will be exercisable upon issuance and will expire
five years from the date of issuance.
The
closing of the sales of the Securities pursuant to the Purchase Agreement is expected to occur
on or about July 14, 2021, subject to customary closing conditions.
A.G.P./Alliance
Global Partners (the “Placement Agent”) is acting as the exclusive placement agent for the Company, on a “reasonable
best efforts” basis, in connection with the Offering. In addition, The Benchmark
Company LLC is acting as a financial advisor to the Company.
Pursuant
to that certain Placement Agency Agreement, dated as of the Effective Date, by and between the Company and the Placement Agent (the “Placement
Agency Agreement”), the Placement Agent will be entitled to (i) a cash fee equal to 7.0% of the gross proceeds from the placement
of the Securities sold by the Placement Agent and (ii) non-accountable expenses of $100,000; however, the Placement Agent shall credit
the Company $25,000 on the closing date. In addition, the Company will issue the Placement Agent warrants to purchase up to 80,000 shares
(the “Placement Agent Warrant Shares”) of Series A Common Stock, representing 4.0% of the Public Shares and shares of Series
A Common Stock issuable upon exercise of the Pre-Funded Warrants, in substantially the same form as the Common Stock Warrants, at an
exercise price of $6.25 per share (the “Placement Agent Warrants”).
The
net proceeds to the Company after deducting the Placement Agent’s fees and the Company’s estimated offering expenses (including
the approximately $4.6 million of net proceeds from the issuance of Pre-Funded Warrants and the Common Stock Warrants to be issued in
the concurrent private placement) are expected to be approximately
$9.1 million. The Company intends to use the net proceeds from the Offering for working capital and for other general corporate purposes
including to potentially acquire additional properties.
Pursuant
to the terms of the Purchase Agreement and subject to certain exceptions as set forth in the Purchase Agreement, for a period of 90 days
after the date of the Effective Date, the Company may not, without the prior written consent of the Placement Agent and the Purchaser,
(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file
or cause to be filed any registration statement with the Securities and Exchange Commission relating to the offering of any shares of
capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company;
(iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank or (iv)
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by
delivery of shares of capital stock of the Company or such other securities, in cash or otherwise. In addition, pursuant to the terms
of the Purchase Agreement, for a period of 90 days after the date of the Effective Date, the Company may not, without the prior written
consent of the Placement Agent, directly or indirectly in any “at the market” or continuous equity transaction, offer to
sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of capital stock of the Company. Furthermore, pursuant to the Purchase Agreement,
within 45 days of the Effective Date, the Company shall file a registration statement providing for the resale by the Purchaser of the
Warrant Shares issuable upon exercise of the Common Stock Warrants. The Company shall use commercially reasonable efforts to cause such
registration to become effective within 75 days following the closing date of the Offering and to keep such registration statement effective
at all times until the Purchaser no longer owns any Common Stock Warrants or Warrant Shares issuable upon exercise thereof.
The
Public Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares (but not the Warrants, the Warrant Shares, the Placement Agent
Warrants or the Placement Agent Warrant Shares) were offered and sold by the Company pursuant to an effective registration
statement on Form S-3 (File No. 333-251779), as well as a prospectus supplement in connection
the Offering to be filed with the SEC.
The
foregoing description of the material terms of the Common Stock Warrant, the Placement Agent Warrant, the Pre-Funded Warrant, the Placement
Agency Agreement and the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full
text of the Form of Common Stock Warrant, Form of Placement Agent Warrant, Form of Pre-Funded Warrant, Form of Placement
Agency Agreement and Form of Purchase Agreement, copies of which are filed as Exhibits 4.1, 4.2, 4.3, 10.1 and 10.2, respectively, to
this Current Report on Form 8-K and incorporated herein by reference.
The
legal opinions and consent of Ellenoff Grossman & Schole LLP relating to the Pre-Funded Warrants and certain tax matters are filed
as Exhibits 5.2, 8.1 and 23.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The legal opinion
and consent of Venable LLP relating to the Public Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares are filed
as Exhibits 5.1 and 23.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.