Item 1.01. Entry into a Material Definitive Agreement.
On August 30, 2023, iSun, Inc., a Delaware corporation (the “Company”), entered into a letter agreement (the “First Letter Agreement”) by and between the Company and each of Anson Investments Master Fund LP and Anson East Master Fund LP (together, the “Investors”) regarding a modification of the terms of those certain Senior Secured Convertible Promissory Notes issued to the Investors, dated November 4, 2022 (the “Notes”). The Notes are described in the Company’s Current Report on Form 8-K, filed with the Commission on November 8, 2022. Under the Notes, the Company covenanted that it meet certain EBITDA targets, including EBITDA of $500,000 for the quarter ended June 30, 2023. The Company had an EBITDA loss of $617,000 during the quarter ended June 30, 2023. Under the Notes, a failure to fulfill the EBITDA financial covenant is defined as an Event of Default. For such an Event of Default, the Investors may accelerate all amounts due under the Notes. The Investors have agreed to a waiver of the Event of Default upon the terms set forth in the First Letter Agreement, including that the Company shall pay the Investors the aggregate amount of $1,442,307.69 of the principal amount of the Notes by wire transfer within 30 days of the date of the Letter Agreement, that the Fixed Conversion Price of the Notes shall be adjusted to $1.00, and that the Company shall issue warrants to the Investors as described in Item 3.02, below.
On August 30, 2023, the Company entered into a second letter agreement with the Investors (the “Second Letter Agreement”). The Second Letter Agreement provides that the Company may complete an Optional Redemption of all of the then outstanding principal balance due under the Notes on or before December 31, 2023, notwithstanding Section 6(a) of the Notes, which permits the Company to effect an Optional Redemption only in the absence of an existing or imminent Event of Default, and subject to certain other conditions.
Item 3.02. Unregistered Sale of Securities.
Effective August 30, 2023, in accordance with the terms of that certain Letter Agreement by and between the Company and the Investors, the Company issued warrants to acquire an aggregate of 1,000,000 shares of Common Stock (the “Warrants”) to the Investors in satisfaction of the Letter Agreement in a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder. Each of the Investors previously represented that it was an “accredited investor”, as defined in Regulation D, and was acquiring the Warrants and Warrant Shares for investment only and not with a view towards, or for resale in connection with, the public sale of distribution thereof. Accordingly, the Warrants and Warrant Shares have not been registered under the Securities Act and any applicable state securities laws. Pursuant to the First Letter Agreement, the Company was obligated to provide the Investors the Warrants with an exercise price of $1.00 per share and a term of 5 years.
