Current Report Filing (8-k)
09 May 2023 - 10:01PM
Edgar (US Regulatory)
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0001022505
2023-05-04
2023-05-04
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): May 4, 2023
SideChannel,
Inc.
(Exact
name of registrant as specified in its charter)
Delaware |
|
000-28745 |
|
86-0837077 |
(State or other jurisdiction |
|
(Commission |
|
IRS Employer |
of incorporation or organization) |
|
File Number) |
|
Identification No.) |
146
Main Street, Suite 405, Worcester, MA 01608
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (508) 925-0114
(Former
name or former address, if changed since last report)
Securities
registered pursuant to Section 12(b) of the Act: None
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(g) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common Stock, par value
$0.001 per share |
|
SDCH |
|
N/A |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
3.02 Unregistered Sales of Equity Securities
On
July 1, 2022 (the “Closing Date”), SideChannel, Inc. (the “Company”) completed its acquisition of all of the
equity securities of SCS, Inc. (“SCS”) in exchange for shares of the Company’s equity securities (the “Acquisition”)
pursuant to that certain Equity Securities Purchase Agreement dated May 16, 2022 (the “Purchase Agreement”) by and among
the Company, SCS, SCS’s stockholders (collectively, the “Sellers”) and Brian Haugli, as the Sellers’ representative
(the “Representative”) as previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities
and Exchange Commission on May 18, 2022 (the “May 8-K”).
Pursuant
to the Purchase Agreement, on the Closing Date, the Sellers exchanged all of their equity securities of SCS for 59,900,000 shares (the
“First Tranche Shares”) of the Company’s common stock, $0.001 par value (the “Common Stock”), and 100 shares
of the Company’s newly designated Series A Preferred Stock, $0.001 par value (the “Series A Preferred Stock”) (which
was erroneously referred to as Series B Preferred Stock in the May 8-K). In addition, the Purchase Agreement provided that the Sellers
were entitled to receive up to an additional 59,900,000 shares (the “Second Tranche Shares” and together with the First Tranche
Shares and the Series A Preferred Stock, the “Shares”) at such time that the operations of SCS, as a subsidiary of the Company,
achieve at least $5.5 million in revenue (the “Milestone”) for any twelve-month period occurring after the Closing Date and
before the 48-month anniversary of the execution of the Purchase Agreement. The number of the Second Tranche Shares were subject to adjustment
to the extent that SCS’s working capital as of the Closing Date was less than or greater than zero.
During
April, 2023, the Company’s management reported to its Board of Directors (the “Board”) that the operations of SCS had
achieved revenue of $5.7 million for the twelve months ended March 31, 2023 which is in excess of the Milestone. The Board engaged the
Company’s independent registered public accounting firm, RBSM, LLP (“RBSM”), to perform certain agreed upon procedures
in connection with the review of the revenue reported for the twelve months ended March 31, 2023. At its May 4, 2023 meeting, the Board
received a letter from RBSM indicating that no exceptions were found in management’s accounting and reporting of the $5.7 million
trailing twelve-month revenue based upon the agreed upon procedures performed by RBSM. Consequently, the Board approved the issuance
of the Second Tranche to the Sellers including a Closing Working Capital Adjustment (the “Adjustment”) of 2,116,618 shares
of common stock. The Adjustment was based upon $380,991 of SCS working capital as of the Closing Date.
Combining
the Second Tranche and the Adjustment, the Sellers received 62,016,618 shares of common stock. As a result of the Acquisition, the Sellers
hold approximately 57.6% of the Company’s 211,587,899 outstanding common stock as of
May 4, 2023.
As
previously disclosed in the May 8-K, the Shares are subject to a Lock-Up/Leak-Out Agreement pursuant to which, subject to certain exceptions,
the Sellers may not directly or indirectly offer to sell, or otherwise transfer, any of the Shares for 24 months after the Closing Date
without the prior written consent of the Company. Notwithstanding the foregoing, pursuant to the Lock-Up/Leak-Out Agreement, the Sellers
may sell up to 20% of their shares of Common Stock beginning 12 months after the Closing Date, and the remaining 80% of their shares
of Common Stock beginning 24 months after the Closing Date.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
Exhibit
No. |
|
Description |
104 |
|
Cover Page Interactive Data File (embedded within the
Inline XBRL document) |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated:
May 9, 2023
|
SIDECHANNEL, INC. |
|
|
|
|
By: |
/s/ Ryan
Polk |
|
|
Ryan Polk |
|
|
Chief Financial Officer |
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