Item 1.01 Entry into a Material Definitive Agreement
On March 30, 2022, Logiq, Inc., a Delaware corporation
(the “Company”), entered into a Purchase Agreement with Ionic Ventures, LLC (“Ionic”), whereby the Company has
the right, but not the obligation, to sell to Ionic, and Ionic is obligated to purchase up to in the aggregate $40,000,000 worth of the
Company’s common stock (the “Purchase Shares”), par value $0.0001 per share (“Common Stock”). Sales of Common
Stock by the Company under the Purchase Agreement will be subject to certain limitations, and may occur from time to time, at the Company’s
sole discretion, over the 24-month period commencing on March 30, 2020 (the “Primary Commencement Date”).
In connection with the execution of the Purchase
Agreement, the Company is registering 2,926,000 shares of Common Stock to Ionic in connection with the purchase of $3,000,000 in shares
of Common Stock (the “Primary Shares”) in connection with the initial purchase of Common Stock under the Purchase Agreement,
which reflects an estimated value equal to the product of (A) the quotient of (y) the purchase amount (i.e., $3,000,000) divided by (z)
the Pre-Settlement Regular Purchase Price (defined below), multiplied by (B) 125% (which Ionic may increase at its discretion). The “Pre-Settlement
Regular Purchase Price” is equal to 80% of the closing price of the Common Stock on the OTCQX Market on the date immediately preceding
the Company’s receipt of a purchase notice under the Purchase Agreement.
The Regular Purchase Price, which is the price
at which future shares of Common Stock sold under the Purchase Agreement will be sold at, for the Purchase Shares shall equal 97% of the
arithmetic average of the five lowest VWAPs during the period starting on the date that Ionic receives Pre-Settlement Regular Purchase
Shares and ending on such date that the aggregate dollar volume of our common stock traded on our Principal Market equals five times the
Purchase Amount, in the aggregate, subject to a five Trading Day minimum (provided, however, that each day on which Ionic has requested
Purchase Shares which cannot be delivered to Ionic shall be excluded from such calculation). This is a forward pricing mechanism based
on an estimate and true up and as of the date of this filing, the Regular Purchase Price has yet to be calculated.
Also in connection with the execution of the Purchase
Agreement, the Company issued a Warrant to purchase 631,579 shares of Common Stock (1.5% of the total $40,000,000 commitment amount) to
Ionic for no consideration as a commitment fee, and has agreed to register the shares issuable upon exercise of the Warrant. The Warrant
may be exercised for cash, but may also be exercised on a cashless exercise basis, which means the Company may not receive any proceeds
from such cashless exercise. Under the Warrant, the Company does not have the right to control the timing and amount of any Warrant exercises
by Ionic, except that there is a 9.99% ownership limitation blocker in the Warrant. Ionic may ultimately decide to exercise all, some
or none of the Warrant.
The Company intends to register the remaining
up to $37,000,000 worth of Common Stock under the Purchase Agreement, or any additional Primary Shares that may be issued after the date
hereof to Ionic, or any Purchase Shares which may be issuable to Ionic as a “true up” pursuant to the initial purchase described
above pursuant to a resale registration statement on Form S-1 to be filed subsequently with the Securities and Exchange Commission (the
“SEC”). The Company and Ionic entered into a Registration Rights Agreement (the “RRA”) dated as of March 30, 2022,
for such purpose.
Actual sales of Common Stock to Ionic under the
Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, an
effective resale registration statement, which is a condition to the commencement of additional sales under the Purchase Agreement (each,
a “Secondary Commencement”), market conditions, the trading price of the Common Stock and determinations by the Company as
to the appropriate sources of funding for the Company and its operations.
The Company expects that any net proceeds received
by the Company from sales to Ionic under the Purchase Agreement will be used for working capital and general corporate purposes.
The purchase price of the Common Stock purchased
by the Ionic under the Purchase Agreement will be derived from prevailing market prices of the Company’s Common Stock immediately
preceding the time of sale. The Company will control the timing and amount of future sales, if any, of Common Stock to Ionic. Ionic has
no right to require the Company to sell any Common Stock to it, but Ionic is obligated to make purchases as the Company directs, subject
to certain conditions.
The Purchase Agreement and the RRA each contains
certain representations, warranties, covenants, closing conditions and indemnification and termination provisions by, between and for
the benefit of the parties which are customary of transactions of this nature. Ionic may not assign or transfer its rights and obligations
under the Purchase Agreement.
The issuance of the Primary
Shares and the shares issuable upon exercise of the Warrant have been registered pursuant to the Company’s effective shelf registration
statement on Form S-3 (File No. 333-259851) (the “Registration Statement”), and the related base prospectus included in the
Registration Statement dated October 8, 2021, as supplemented by a prospectus supplement to be filed on or about March 31, 2022 (the “Prospectus
Supplement”). A copy of the legal opinion of Procopio, Cory, Hargreaves & Savitch LLP as to the legality of the Primary Shares
and the legal opinion of Carter Ledyard & Milburn LLP with respect to the legality of the Warrant are filed as Exhibits 5.1 and 5.2,
respectively, attached hereto.
The foregoing is a summary
description of certain terms of the Purchase Agreement, the RRA and the Warrant and, by its nature, is incomplete. Copies of the Purchase
Agreement, RRA and Warrant are filed as Exhibits 10.1, 10.2 and 4.1, respectively, attached hereto. The foregoing descriptions of the
Purchase Agreement, the RRA and the Warrant are qualified in their entirety by reference to the full text of such exhibits.
The provisions of the
Purchase Agreement including any representations and warranties contained therein, are not for the benefit of any party other than the
parties thereto and are not intended as documents for investors and the public to obtain factual information about the current state of
affairs of the parties thereto. Rather, investors and the public should look to other disclosures contained in the Company’s annual,
quarterly and current reports it may file with the SEC.
The information contained
in this Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the shares of the Company’s
Common Stock discussed herein, nor shall there be any offer, solicitation or sale of the shares in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking
Statements
This Report and the exhibit(s)
attached hereto, including the disclosures set forth herein, contains certain forward-looking statements that involve substantial risks
and uncertainties. When used herein, the terms “intends,” “anticipates,” “expects,” “estimates,”
“believes” and similar expressions, as they relate to us or our management, are intended to identify such forward-looking
statements.
Forward-looking statements
in this Report or hereafter, including in other publicly available documents filed with the Commission, reports to the stockholders of
the Company and other publicly available statements issued or released by the Company involve known and unknown risks, uncertainties and
other factors which could cause the Company’s actual results, performance (financial or operating) or achievements to differ from
the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. Such
future results are based upon management’s best estimates based upon current conditions and the most recent results of operations.
These risks include, but are not limited to, the risks set forth herein and in such other documents filed with the Commission, each of
which could adversely affect the Company’s business and the accuracy of the forward-looking statements contained herein. The Company’s
actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements.