false0001006045IRIDEX CORPNASDAQ00010060452024-08-042024-08-04

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	August 4, 2024
(Date of Report (date of earliest event reported))
IRIDEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware		000-27598	77-0210467
(State or other jurisdiction of incorporation or organization)		(Commission File Number)	(I.R.S. Employer Identification Number)
1212 Terra Bella Avenue Mountain View, California 94043
(Address of principal executive offices, including zip code)
(650) 940-4700
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
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 (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act of 1933 (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))
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. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of Class		Trading Symbol		Name of Exchange on Which Registered
Common Stock, par value $0.01 per share		IRIX		Nasdaq Capital Market

 

 

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Item 1.01 Entry into a Material Definitive Agreement.

On August 4, 2024, IRIDEX Corporation (the “Company”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Lind Global Asset Management IX LLC (“Lind”), an entity managed by The Lind Partners, LLC, relating to the issuance and sale to Lind of a senior convertible promissory note in the principal amount of $4,200,000 (the “Principal Amount”), for a purchase price of $3,500,000 (the “Initial Note”) and (ii) a subsequent contingent senior convertible promissory note in the amount of $1,800,000 for a purchase price of $1,500,000 (the “Subsequent Note” and, together with the Initial Note, the “Notes”)(together with the Securities Purchase Agreement and the Notes, the “Transaction Documents”). The transaction is expected to close on or around August 9, 2024 (the “Initial Closing”), subject to customary closing conditions.

 

The Notes will be convertible into shares of the Company’s common stock, $0.01 par value (the “Common Stock” and such shares issued upon conversion, the “Conversion Shares”) at Lind’s option at an initial conversion price of $2.44, subject to any adjustments set forth in the Notes; provided no such adjustment shall result in a conversion price that is less than $0.39 (such limit, the “Floor Price”). The outstanding principal balance of each Note, after giving effect to any conversion, repayment or redemption (the “Outstanding Principal Amount”), shall be due and payable 24 months from issuance of the applicable Note (the “Maturity Date”), or at such earlier time as determined in the Notes. The Notes will not bear regular interest.

 

Commencing on the date that is one hundred twenty (120) days after the issuance of the applicable Note, provided that no Event of Default (as defined in each of the Notes and further described below) shall have occurred, the Company will repay the Outstanding Principal Amount of such Note in twenty (20) consecutive monthly installments of $210,000 (the “Monthly Payments”) on each one (1) month anniversary of the issuance date, until the Outstanding Principal Amount of such Note has been paid in full on or prior to the applicable Maturity Date or, if earlier, upon acceleration, repayment, conversion or redemption of such Note in accordance with its terms. At the Company’s option, each month, the Monthly Payments can be made in: (i) cash; (ii) shares of the Common Stock (the “Repayment Shares”); or (iii) a combination of cash and Repayment Shares; provided, that the number of Repayment Shares to be delivered in accordance with clause (ii) or (iii) shall be determined by dividing (X) the portion of the Principal Amount being paid in shares of Common Stock, by (Y) ninety percent (90%) of the average of the five (5) lowest daily VWAPs during the twenty (20) trading days prior to the applicable payment date; provided, further, that no portion of the Principal Amount may be paid in Repayment Shares unless such Repayment Shares (A) may be immediately resold pursuant to Rule 144 (“Rule 144”) under the Securities Act of 1933, as amended (the “1933 Act”), by a person that is not an affiliate of the Company, or (B) are registered for resale under the 1933 Act and the Registration Statement (defined below) is in effect and lawfully usable to effect immediate sales of such Repayment Shares. If the Company makes a Monthly Payment in cash, the Company must also pay Lind a 4% premium of such Monthly Payment and such premium will not be applied towards the Outstanding Principal Amount. Furthermore, with respect to no more than two (2) Monthly Payments, Lind may elect to increase the amount of such Monthly Payment up to $800,000; provided that any such increased Monthly Payment is made in Repayment Shares. Following any such increased Monthly Payment, the amount of such increase shall be deducted from the amount of the last Monthly Payment owing under such Note until such Monthly Payment is reduced to zero.

 

Provided no Event of Default has occurred, from the date that is thirty (30) days following the earlier date on which the Conversion Shares may be (i) offered or sold pursuant to an effective Registration Statement, or (ii) immediately resold under Rule 144 by persons other than the Company’s affiliates or holders of the Conversion Shares that have been the Company’s affiliates at a time during the immediately preceding three (3) months without restriction on the number of shares to be sold or manner of sale, the Company may repay all, but not less than all, of the then Outstanding Principal Amount at a repayment price equal to (a) if the applicable prepayment occurs on or prior to the date that is one hundred and eighty (180) days following the issuance of the applicable Note, 90% of the Outstanding Principal Amount of such Note, (b) if the applicable prepayment occurs on the date that is on or after the date that is one hundred eighty one (181) days following the date of issuance of the applicable Note but prior to the date that is three hundred sixty-five (365) days from the date of issuance of the applicable Note, 93.3333333% of the Outstanding Principal Amount of such Note, and (c) if the applicable prepayment occurs on the date that is on or after the date that is three

 

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hundred sixty-six (366) days following the date of issuance of the applicable Note but on or prior to the applicable Maturity Date, the Outstanding Principal Amount of such Note. If the Company elects to prepay a Note, Lind may elect to convert up to one-third (1/3) of the Outstanding Principal Amount of such Note in connection with the prepayment.

Notwithstanding anything to the contrary contained in the Transaction Documents, so long as the Common Stock is listed on the applicable trading market, prior to the receipt of the Stockholder Approval (defined below), the Company is not required to issue any Common Stock to Lind to the extent such issuance would result in the aggregate number of Lind Shares issued by the Company pursuant to the Transaction Documents exceeding 19.99% of the outstanding capital stock, membership interests or other similar equity interests (the “Equity Interests”) at any such time and, following the receipt of the Stockholder Approval, 30% of the outstanding Equity Interests at any such time.

 

The Securities Purchase Agreement and each Note contain certain negative covenants, including restrictions on the Company’s ability to incur debt (other than Permitted Indebtedness, as defined in the Securities Purchase Agreement) or issue certain equity securities. Additionally, unless waived by Lind, the Company shall be required to utilize a portion of the proceeds from certain specified debt or equity transactions and asset sales to repay the Outstanding Principal Amount due under the Notes.

 

Following the occurrence of a Change of Control (as defined in the Securities Purchase Agreement), Lind may require the Company to prepay, effective immediately prior to the consummation of such Change of Control, an amount equal to 105% of the Outstanding Principal Amount as of such date.

 

Upon the occurrence of any Event of Default (as defined in each of the Notes), the Notes will become immediately due and payable, and Lind may declare an amount equal to 120% of the then Outstanding Principal Amount of the Note due and payable, in addition to any other remedies under the Transaction Documents. Additionally, upon the occurrence of an Event of Default or an event which with the passage of time may result in an Event of Default, Lind may convert all or a portion of the Outstanding Principal Amount of a Note at the lower of (i) the then-current conversion price and (ii) the greater of (a) eighty-percent (80%) of the average of the three (3) lowest daily VWAPs during the twenty (20) Trading Days prior to the delivery of the notice of conversion and (b) the Floor Price.

 

Events of Default include, among others: (i) any failure by the Company to make any payment of the Principal Amount of the Note when due; (ii) covenant defaults; (iii) delivery by the Company of notice to Lind that it cannot comply with Lind’s request to convert the Note(s) into Conversion Shares; (iv) the failure by the Company to (x) timely deliver the Lind Shares or (y) make the payment of any fees and/or liquidated damages under the Transaction Documents; (v) any failure by the Company to have the required minimum number of shares of Common Stock authorized and reserved to convert the Note(s) into Lind Shares; (vi) material inaccuracy of representations and warranties; (vii) default by the Company on any payment of existing indebtedness in excess of $250,000; (viii) bankruptcy and insolvency proceedings, (ix) failure by the Company to instruct its transfer agent to issue unlegended certificates to Lind as required by the Transaction Documents; (x) delisting events; (xi) proposal by the Company or consummation of a “going private” transaction; (xii) the occurrence of a United States Securities and Exchange Commission (the “Commission”) or judicial stop trade order or trading suspension stop-order or any restriction in place with the Company’s transfer agent restricting trade of the Common Stock; (xiii) the Company’s market capitalization being below $20,000,000.00 for ten (10) consecutive days; or (xiv) challenge by the Company of the enforceability of any Transaction Document.

 

The Securities Purchase Agreement provides that the Company shall provide to Lind, within two (2) business days following the Initial Closing, 126,968 shares of the Common Stock (the “First Incentive Share Installment”). In the event the Company fails to repay the Initial Note in full within one hundred eighty (180) days of the closing date of the Note, the Company shall issue to Lind, on the trading day immediately following such day, additional shares of the Common Stock (the “Second Incentive Share Installment” and, together with the First Incentive Share Installment, the “Incentive Shares”) in an amount equal to $250,000 divided by the greater of (i) the average VWAP over the five trading days immediately preceding such trading date and (ii) the Floor Price, subject to any adjustments provided in the Note. The Securities Purchase Agreement also contains customary representation and warranties of the Company and Lind, indemnification obligations of the Company, termination provisions, and other obligations and rights of the

 

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parties. Together, the Conversion Shares, the Repayment Shares, and the Incentive Shares constitute the “Lind Shares”.

 

Pursuant to the terms and conditions of the Securities Purchase Agreement, the Company will file a registration statement (the “Registration Statement”) with the Commission no later than thirty (30) days from the date the Initial Note is issued, covering the resale of all of the Lind Shares issued to Lind pursuant to the Initial Note. Additionally, the Company shall file a Registration Statement covering the resale of all of the Lind Shares issued to Lind pursuant to the Subsequent Note no later than thirty (30) days from the date the Subsequent Note is issued. Further, pursuant to the terms of the Securities Purchase Agreement, the Company also agreed to hold a special stockholder meeting no later 120 days from the Initial Closing to obtain stockholder approval (the “Stockholder Approval”) to (a) amend the Company’s certificate of incorporation to increase the number of authorized shares of Common Stock by at least the number of shares equal to the number of shares of Common Stock issuable under the Transaction Documents, or (b) to ratify and approve all of the transactions contemplated by the Transaction Documents, including the issuance of all of the Lind Shares issued and potentially issuable to Lind pursuant to the terms and conditions of the Transaction Documents, all as may be required by the applicable rules and regulations of the applicable trading market (or any successor entity).

 

The total number of shares of Common Stock issuable pursuant to the terms of the Transaction Documents is capped at (i) prior to the receipt of Stockholder Approval, a number of shares of Common Stock equal to 19.99% of the number of shares of Common Stock outstanding as of August 4, 2024, and (ii) following the receipt of Stockholder Approval, a number of shares of Common Stock equal to 30% of the number of shares of Common Stock outstanding as of August 4, 2024.

 

In addition, pursuant to the terms of the Securities Purchase Agreement, if the Company raises new equity in one or more raises within twenty four (24) months following the Initial Closing, the Company shall offer Lind the opportunity to purchase up to fifteen (15%) of such new securities, at the price and on the terms specified in the Offering.

The foregoing description of the Transaction Documents is qualified by reference to the full text of the forms of the Transaction Documents, which are filed as Exhibits hereto and incorporated herein by reference.

Neither this Current Report on Form 8-K, nor any exhibit attached hereto, is an offer to sell or the solicitation of an offer to buy the securities described herein. Such disclosure does not constitute an offer to sell, or the solicitation of an offer to buy nor shall there be any sales of the Company’s securities in any state in which such offer, solicitation or sale would be unlawful. The securities mentioned herein have not been registered under the 1933 Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the 1933 Act and applicable state securities laws.

Item 3.02 Unregistered Sales of Equity Securities.

The information contained above under Item 1.01, to the extent applicable, is hereby incorporated by reference herein. Based in part upon the representations of Lind in the Securities Purchase Agreement, the Offering and the Notes was made in reliance on the exemption afforded by Section 4(a)(2) of the 1933 Act and Rule 506 of Regulation D under the 1933 Act and corresponding provisions of state securities or “blue sky” laws. None of the securities have been registered under the 1933 Act or any state securities laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements. The sale of the securities mentioned herein did not involve a public offering and was made without general solicitation or general advertising. The Company relied on this exemption from registration based in part on representations made by Lind.

 

Neither this Current Report on Form 8-K nor any exhibit attached hereto is an offer to sell or the solicitation of an offer to buy shares of Common Stock or other securities of the Company.

 

Item 8.01 Other Events

 

The Company issued a press release on August 5, 2024 announcing the Offering. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

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Item 9.01 Exhibits.

 

Exhibit No.		Description
10.1		Securities Purchase Agreement
10.2		Form of Note (included in Exhibit 10.1)
99.1		Press Release dated August 5, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

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SIGNATURES

 

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.

 

			IRIDEX CORPORATION
	By:		/s/David I. Bruce
			David I. Bruce
			Chief Executive Officer
Date: August 5, 2024

 

 

 

 

 

 

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SECURITIES PURCHASE AGREEMENT Exhibit 10.1

This Securities Purchase Agreement (as amended, supplemented, restated and/or modified from time to time, this “Agreement”) is entered into as of August 4, 2024, by and between IRIDEX Corporation, a Delaware corporation (the “Company”), and Lind Global Asset Management IX LLC, a Delaware limited liability company (the “Investor”).

BACKGROUND

NOW THEREFORE, in consideration of the foregoing recitals and the covenants and agreements set forth herein, and intending hereby to be legally bound, the Company and the Investor hereby agree as follows:

As used in this Agreement, the following terms shall have the meanings specified or indicated below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms:

“1933 Act” means the Securities Act of 1933, as amended.

“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Acquisition” means the acquisition by the Company or any direct or indirect Subsidiary of the Company of a majority of the Equity Interests or substantially all of the assets and business of any Person, whether by direct purchase of Equity Interests, asset purchase, merger, consolidation or like combination.

“Additional Filing Deadline” means the date forty-five (45) days after the date that 95% of the Investor Shares registered under the immediately preceding effective Registration Statement are sold or, if such date is not a Business Day, the next date that is a Business Day; provided, however, that in the event the foregoing deadline in any case falls within the Grace Period and the Company has not yet filed with the SEC its Complete Form 10-K for the preceding fiscal year by such deadline, then such deadline shall be extended until the Business Day following date on which the Complete Form 10-K for such preceding fiscal year is filed with the SEC; provided further, however, that such deadline shall not be extended beyond the date that is one hundred and twenty (120) days following the end of the Company’s most recent fiscal year (or, if such date is not a Business Day, the next date that is a Business Day). In any case where the Additional Filing

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Deadline is extended pursuant to the foregoing provisos, then the Additional Filing Deadline, as so extended, shall be deemed the Additional Filing Deadline for all purposes of this Agreement.

“Additional Registration Statement” has the meaning set forth in Section 9.1.

“Affiliate” means another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.

“Agreement” has the meaning set forth in the preamble.

“Blue Sky Application” has the meaning set forth in Section 9.3(a).

“Board of Directors” has the meaning set forth in the recitals.

“Business Day” means any day other than a Saturday, Sunday or any other day on which banks are permitted or required to be closed in New York City.

“Capital Stock” means the Common Stock and any other classes of capital stock of the Company.

“Change of Control” means, with respect to the Company, on or after the date of this Agreement:

“Closing” has the meaning set forth in Section 2.1.

“Closing Date” has the meaning set forth in Section 2.1.

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“Commitment Fee” means an amount equal to three percent (3.0%) of the applicable Funding Amount as of each Closing.

“Common Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Stock Equivalents” means any Convertible Securities, rights or warrants or options to purchase any such Common Stock or Convertible Securities, other than Common Stock Equivalents granted or issued under any Equity Plan.

“Company” has the meaning set forth in the preamble.

“Competitor” means a Person engaged, directly or indirectly (including through any partnership, limited liability company, corporation, joint venture or similar arrangement (whether now existing or formed hereafter)), in any activity competitive (as determined in the reasonable discretion of the Company) with the primary business activities of the Company, but shall not include any financial investment firm or collective investment vehicle that, together with its Affiliates, holds less than 20% of the outstanding equity of any Competitor and does not, nor do any of its Affiliates, have a right to designate any members of the board of directors of any Competitor.

“Complete Form 10-K” means the annual report on Form 10-K filed by the Company with the SEC that includes, or incorporates by reference from the Company’s most recent definitive proxy statement on Schedule 14A actually filed with the SEC, the information and disclosures required by Part III of the SEC’s Form 10-K. For the avoidance of doubt, if the Company files its annual report on Form 10-K with the SEC and does not include therein all of the information and disclosures required by Part III of the SEC’s Form 10-K, then such annual report on Form 10-K shall not be deemed a Complete Form 10-K for purposes of this Agreement until the Company either (i) files an amendment to such annual report on Form 10-K to include the information and disclosures required by Part III of the SEC’s Form 10-K or (ii) files its definitive proxy statement on Schedule 14A with the SEC for its next annual meeting of stockholders.

“Conversion Cap” means (i) prior to the receipt of Stockholder Approval, a number of shares of Common Stock equal to 19.99% of the number of shares of Common Stock outstanding as of the date hereof calculated in accordance with the listing standards and rules of the Nasdaq Stock Market, including Rule 5635(d) (or any successor provisions thereof), and (ii) following the receipt of Stockholder Approval, a number of shares of Common Stock equal to 30% of the number of shares of Common Stock outstanding as of the date hereof calculated in accordance with the listing standards and rules of the Nasdaq Stock Market, including Rule 5635(d) (or any successor provisions thereof).

“Conversion Shares” means the Common Stock issuable upon the full or any partial conversion of the Notes.

“Convertible Securities” means any securities convertible into or exercisable or exchangeable for, directly or indirectly, Common Stock.

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“Current Public Information Failure” has the meaning set forth in Section 9.4.

“Cut Back Shares” has the meaning set forth in Section 9.1(a).

“Disclosure Letter” has the meaning set forth in Section 3.

“Effectiveness Deadline” means the date which is the earliest of (i) if the Initial Registration Statement does not become subject to any review or comment process by the SEC, (a) sixty (60) days after the filing of the Initial Registration Statement or (b) three (3) Trading Days after the Company receives written notification from the SEC that the Initial Registration Statement will not become subject to any review or comment process by the SEC and the Company fails to request to accelerate the effectiveness of the Initial Registration Statement, or (ii) if the Initial Registration Statement becomes subject to any review or comment process by the SEC, seventy-five (75) days after the filing of the Initial Registration Statement, or, if such date is not a Business Day, the next date that is a Business Day.

“Effectiveness Period” has the meaning set forth in Section 9.2(a).

“Equity Interests” means and includes capital stock, membership interests and other similar equity securities, and shall also include warrants or options to purchase capital stock, membership interests or other equity interests.

“Equity Plan” means any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company.

“Event” means any event, change, development, effect, condition, circumstance, matter, occurrence or state of facts.

“Event of Default” has the meaning set forth in each Note.

“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

“Exempted Securities” means (a) shares of Common Stock or Common Stock Equivalents hereunder, (b) shares of Common Stock or Common Stock Equivalents to employees, officers or directors of the Company pursuant to any Equity Plan, (c) securities issued upon the exercise or exchange of or conversion of any Securities issued hereunder, other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, and (d) securities issued pursuant to acquisitions or strategic transactions approved by the Board of Directors; provided that

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such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any Registration Statement in connection therewith, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

“Filing Deadline” means the Initial Filing Deadline, the Subsequent Note Filing Deadline and the Additional Filing Deadline, as applicable.

“Filing Failure” has the meaning set forth in Section 9.4.

“First Incentive Share Installment” has the meaning set forth in Section 2.6.

“Floor Price” means $0.39, subject to adjustment as provided in Section 3.4(a)(i) of the Notes. Notwithstanding anything to the contrary contained in this Agreement or the other Transaction Documents, in no event shall any shares of Common Stock be issued pursuant to this Agreement or the other Transaction Documents, upon conversion of the Notes or otherwise, at a price per share lower than the Floor Price.

“Form 8-K” has the meaning set forth in Section 5.11.

“Funding Amount” means, initially an amount of Three Million Five Hundred Thousand Dollars ($3,500,000.00) for the Initial Note issued in the Initial Closing, and, only as provided herein, an amount equal to up to an additional One Million Five Hundred Thousand Dollars ($1,500,000), for such additional Notes, if any, as may be further issued hereunder.

“GAAP” means United States generally accepted accounting principles, consistently applied.

“Grace Period” means the period commencing on the date that is one hundred and thirty (130) days following the end of the Company’s most recent fiscal third quarter and ending on, and including, the date that is one hundred and twenty (120) days following the end of the Company’s most recent fiscal year.

“Holder Group” shall mean the Investor plus any other Person with which the Investor is considered to be part of a group under Section 13 of the 1934 Act or with which the Investor otherwise files reports under Sections 13 and/or 16 of the 1934 Act.

“HSR Act” has the meaning set forth in Section 5.17.

“Incentive Shares” has the meaning set forth in Section 2.6.

“Indebtedness” means (a) indebtedness for borrowed money; (b) obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, current swap agreements, interest

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rate hedging agreements, interest rate swaps, or other financial products; (c) capital lease obligations; (d) obligations for the deferred purchase price of assets; (e) synthetic leases; (f) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse) any of the foregoing obligations of any other person; and (g) endorsements for collection or deposit.

“Initial Closing” has the meaning set forth in Section 2.1.

“Initial Filing Deadline” means no later than thirty (30) days from the issuance of the Initial Note.

“Initial Note” means the Note issued at the Initial Closing.

“Initial Registration Statement” has the meaning set forth in Section 9.1(a).

“Investor” has the meaning set forth in the preamble.

“Investor Group” shall mean the Investor plus any other Person with which the Investor is considered to be part of a group under Section 13 of the 1934 Act or with which the Investor otherwise files reports under Sections 13 and/or 16 of the 1934 Act.

“Investor Party” has the meaning set forth in Section 5.12.

“Investor Shares” means the Conversion Shares, the Incentive Shares, the Repayment Shares and any other shares issued or issuable to the Investor pursuant to this Agreement or the Notes.

“IP Rights” has the meaning set forth in Section 3.10.

“Law” means any law, rule, regulation, order, judgment or decree, including, without limitation, any federal and state securities Laws.

“Legend Removal Date” has the meaning set forth in Section 5.1(c).

“Losses” has the meaning set forth in Section 5.12.

“Maintenance Failure” has the meaning set forth in Section 9.4.

“Mandatory Default Amount” means an amount equal to one hundred twenty percent (120%) of the Outstanding Principal Amount of the Notes on the date on which the first Event of Default has occurred and any other amounts owing under the Notes or the other Transaction Documents.

“Market Capitalization” means, as of any date of determination, the product of (a) the number of issued and outstanding shares of Common Stock as of such date (exclusive of any shares of Common Stock issuable upon the exercise of options or warrants or conversion of any convertible securities), multiplied by (b) the closing price of the Common Stock on the Trading Market on the date of determination.

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“Material Adverse Effect” means any change, development, event, occurrence, fact or effect that, individually or in the aggregate with any one or more other changes, developments, events, occurrences, facts or effects, (i) on the businesses, properties, assets, operations, results of operations or financial condition of the Company, or the Company and the Subsidiaries, taken as a whole, or (ii) that would reasonably be expected to prevent or materially impede the ability of the Company to consummate the transactions contemplated by this Agreement or to perform its obligations hereunder or under the Notes; provided, however, that none of the following (individually or in combination) shall be deemed to constitute, and none of the following shall be taken into account in determining whether there has been or would be, a Material Adverse Effect: (a) any adverse effect resulting from or arising out of general business, political or economic conditions or financial or capital markets, both in the U.S. and internationally; (b) any adverse effect resulting from or arising out of general conditions in the industries in which the Company and the Subsidiaries operate, participate and compete; (c) any adverse effect resulting from any changes to applicable Law or any change in accounting requirements or principles; (d) any adverse effect resulting from or arising out of any natural disaster or any acts of terrorism, sabotage, military action or war or any escalation or worsening thereof; (e) the failure of the Company or its Subsidiaries to meet internal or other estimates, expectations, projections or forecasts, including as provided to the Investor or any of its representatives by the Company or any of the Company’s representatives (it being understood and agreed that the facts or occurrences giving rise or contributing to any such failure may be deemed to constitute, or be taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect) provided, that this clause (e) shall not be construed as implying the Company is making any representation or warranty hereunder with regard to any such estimates, expectations, projections or forecasts; or (f) any changes in financial, banking or securities markets in general, including any disruption thereof, and any decline in the price of any security or any market index or any change in prevailing interest rates (it being understood and agreed that the underlying cause of any such decline or change in the foregoing may be deemed to constitute, or taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect; except, in each case of clauses (a) through (f), where such change, development, event, occurrence, fact or effect has had a disproportionate adverse effect on the Company and its Subsidiaries, taken as a whole, compared to other companies operating in the industries, geographies or segments in which the Company and its Subsidiaries operate and compete.

“Maximum Percentage” means 4.99%; provided, that if at any time after the date hereof the Investor Group beneficially owns in excess of 4.99% of any class of Equity Interests in the Company that is registered under the 1934 Act or exempt from the registration and qualification requirements under the 1933 Act, then the Maximum Percentage shall automatically increase to 9.99% so long as the Investor Group owns in excess of 4.99% of such class of Equity Interests (and shall, for the avoidance of doubt, automatically decrease to 4.99% upon the Investor Group ceasing to own in excess of 4.99% of such class of Equity Interests).

“Money Laundering Laws” has the meaning set forth in Section 3.25.

“New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become convertible or exchangeable into or exercisable for such equity securities.

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“Note” has the meaning set forth in Section 2.1.

“Notice Termination Time” has the meaning set forth in Section 10.2.

“OFAC” has the meaning set forth in Section 3.23.

“Outstanding Principal Amount” means, at the time of determination, the Principal Amount outstanding after giving effect to any conversions, repayment or redemption pursuant to the terms hereof.

Permitted AR Facility” means a credit facility meeting the following criteria:

“Permitted Indebtedness” means (a) the Company’s obligations under this Agreement and the other Transaction Documents; (b) Indebtedness existing on the Closing Date which is shown on the Disclosure Letter; (c) Indebtedness subordinated to the Company’s obligations under the Notes (pursuant to a subordination, intercreditor, or other similar agreement in form and substance reasonably satisfactory to Investor entered into between Investor and the other creditor(s)) on terms reasonably acceptable to Investor; (d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business; (e) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business; (f) other unsecured Indebtedness in an aggregate principal amount not to exceed Two Hundred and Fifty Thousand Dollars ($250,000) outstanding at any time; (g) capital leases on equipment acquired or held by the Company; (h) Indebtedness arising from customary cash management and treasury services, and the honoring of a check, draft or similar instrument against insufficient funds or from the endorsement of instruments for collection or deposit, in each case, in the ordinary course of business; (i) unsecured Indebtedness incurred in the ordinary course of business pursuant to corporate credit cards in an aggregate amount not to exceed Two Hundred and Fifty Thousand Dollars ($250,000) outstanding at any time; (j) financings of inventory in the ordinary course of business, (k) Indebtedness under the Permitted AR Facility; and (l) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through

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(k) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon the Company or its Subsidiaries, as the case may be.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Prepayment Amount” means, provided no Event of Default has occurred, in addition to any amounts owing under Section 11.1 of this Agreement, (i) if the applicable prepayment shall occur on a date that is on or prior to the date that is 180 days from the issuance of the applicable Note, 90% of the Outstanding Principal Amount (rounded up to the nearest whole dollar) of such Note, (ii) if the applicable prepayment shall occur on the date that is on or after the date that is 181 days following the date of issuance of the applicable Note but prior to the date that is 365 days from the date of issuance of the applicable Note, 93.3333333% of the Outstanding Principal Amount (rounded up to the nearest whole dollar) of such Note, and (iii) if the applicable prepayment shall occur on the date that is on or after the date that is 366 days following the date of issuance of the applicable Note but on or prior to the Maturity Date (as defined in the Note), the Outstanding Principal Amount of such Note.

“Prepayment Notice” has the meaning set forth in Section 1.4 of the Notes.

“Prepayment Right Date” means thirty (30) days following the earlier of such date as Conversion Shares may be (i) offered or sold pursuant to an effective Registration Statement, or (ii) may be immediately resold under Rule 144 by Persons other than the Company’s Affiliates or holders of Conversion Shares that have been the Company’s Affiliates at a time during the immediately preceding three months without restriction on the number of shares to be sold or manner of sale.

“Press Release” has the meaning set forth in Section 5.11.

“Principal Amount” has the meaning set forth in Section 2.2.

“Proceedings” has the meaning set forth in Section 3.6.

“Prohibited Transaction” means a transaction with a third party or third parties in which the Company issues or sells (or arranges or agrees to issue or sell):

(a) any debt, equity or equity-linked securities (including options or warrants) that are convertible into, exchangeable or exercisable for, or include the right to receive shares of the Company’s Capital Stock:

(i) at a conversion, repayment, exercise or exchange rate or other price that is based on, and/or varies with, a discount to the future trading prices of, or quotations for, shares of Common Stock; or

(ii) at a conversion, repayment, exercise or exchange rate or other price that is subject to being reset at some future date after the initial issuance of such debt, equity or

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equity-linked security or upon the occurrence of specified or contingent events (other than warrants that may be repriced by the Company); or

(b) any securities in a capital or debt raising transaction or series of related transactions which grant to an investor the right to receive additional securities based upon future transactions of the Company on terms more favorable than those granted to such investor in such first transaction or series of related transactions;

and are deemed to include transactions generally referred to as at-the-market transactions (ATMs) or equity lines of credit and stand-by equity distribution agreements, and convertible securities and loans having a similar effect; provided, that an at-the-market transaction or a series of at-time market transactions in an aggregate amount of $1,000,000, where the per share sale price is less than the Conversion Price then in effect, or $3,000,000, where the per share sale price is equal to or in excess of the Conversion Price then in effect, shall not be deemed a Prohibited Transaction.

“Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Investor Shares covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

“register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.

“Registration Delay Payments” has the meaning set forth in Section 9.4.

“Registration Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Investor Shares pursuant to the provisions of this Agreement, including the Prospectus and amendments and supplements to such Registration Statement, and including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

“Repayment Shares” means shares of Common Stock issued to the Investor by the Company as payment for the Outstanding Principal Amount, pursuant to Section 1.3 of the Notes.

“Repayment Share Price” means ninety percent (90%) of the average of the five (5) lowest daily VWAPs during the twenty (20) Trading Days prior to the applicable Payment Date or Conversion Date, subject to the Floor Price.

“Required Minimum”, means, (i) prior to Stockholder Approval, the Conversion Cap, and (ii) as of any date following Stockholder Approval, 200% of the maximum number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents based on the Floor Price, including any Conversion Shares issuable upon conversion in full of the Notes, ignoring any conversion limits set forth therein.

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“Rule 144” and “Rule 415” means Rule 144 and Rule 415, respectively, promulgated by the SEC pursuant to the 1933 Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such rule.

“SEC” means the United States Securities and Exchange Commission.

“SEC Documents” has the meaning set forth in Section 3.5(a).

“SEC Guidance” means (i) any publicly-available written or oral guidance, comments, requirements or requests of the SEC staff and (ii) the 1933 Act.

“SEC Restrictions” has the meaning set forth in Section 9.1(a).

“Second Incentive Share Installment” has the meaning set forth in Section 2.6.

“Securities” means the Notes and the Investor Shares.

“Securities Termination Event” means either of the following has occurred:

(a) trading in securities generally in the United States has been suspended or limited for a consecutive period of greater than three (3) Business Days; or

(b) a banking moratorium has been declared by the United States or the New York State authorities and is continuing for a consecutive period of greater than three (3) Business Days.

“Significant Subsidiary” means a Subsidiary of the Company that meets the definition of “significant subsidiary” in Article 1, Rule 1-02 of Regulation S-X under the 1934 Act as in effect on the date of this Agreement; provided that, in the case of a Subsidiary of the Company that meets the criteria of clause (1)(iii) of such definition of “significant subsidiary” but not clause (1)(i) or (1)(ii) thereof, such Subsidiary shall not be deemed to be a Significant Subsidiary unless such Subsidiary’s income from continuing operations before income taxes, exclusive of amounts attributable to any non-controlling interests, for the last completed fiscal year prior to the date of such determination exceeds $1,000,000. Notwithstanding the foregoing, for purposes of this definition, to the extent any such Subsidiary would not be deemed to be a “significant subsidiary” under the relevant definition set forth in Rule 1-02(w) of Regulation S-X (or any successor rule) as in effect on the relevant date of determination, such Subsidiary shall not be deemed to be a “Significant Subsidiary” under this Agreement irrespective of whether such Subsidiary would otherwise be deemed to be a “Significant Subsidiary” after giving effect to the proviso in the immediately preceding sentence.

“Stockholder Approval” shall mean the approval of the holders of a majority of the Company’s outstanding voting Common Stock: (a) if and to the extent legally required, to amend the Company’s certificate of incorporation to increase the number of authorized shares of Common Stock by at least the number of shares equal to the number of shares of Common Stock issuable under the Transaction Documents, or (b) to ratify and approve all of the transactions contemplated by the Transaction Documents, including the issuance of all of the Investor Shares issued and potentially issuable to the Investor pursuant to the terms and conditions of the Transaction

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Documents, all as may be required by the applicable rules and regulations of the Trading Market (or any successor entity).

“Subsequent Note” has the meaning set forth in Section 2.2.

“Subsequent Note Filing Deadline” means no later than thirty (30) days from the issuance of the Subsequent Note.

“Subsequent Note Registration Statement” has the meaning set forth in Section 9.1(a).

“Subsequent Financing” has the meaning set forth in Section 10.

“Subsidiaries” and “Subsidiary” have the meaning set forth in Section 3.4(b).

“Trading Day” means a day on which the Common Stock is traded on a Trading Market or principal other market on which the Common Stock is listed or admitted for trading. If the Common Stock is not so listed or admitted for trading, “Trading Day” means a Business Day.

“Trading Market” means whichever of the New York Stock Exchange, NYSE American, the Nasdaq Stock Market (including the Nasdaq Capital Market), or principal other U.S. national or regional securities exchange on which the Common Stock is listed or quoted for trading on the date in question.

“Transaction Documents” means this Agreement, the Notes, the Transfer Agent Instruction Letter, and any other documents or agreements executed or delivered in connection with the transactions contemplated hereunder.

“Transfer Agent” shall mean Computershare Trust Company, having its address at 250 Royall Street, Canton, MA 02021, Attention: Audrey C. Matheny, Email: Audrey.Matheny@computershare.com.

“Transfer Agent Instruction Letter” shall mean a letter of irrevocable instructions addressed by the Company to the Transfer Agent, acceptable to the Investor in its sole discretion.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of one share of Common Stock trading for such date on such Trading Market as reported by Bloomberg Financial L.P. (or its equivalent successor)(from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day); (b) the volume weighted average price of the Common Stock for such date on the OTCQX or OTCQB Markets, as applicable, as reported by Bloomberg Financial L.P. (or its equivalent successor); (c) if the Common Stock is not then listed or quoted on a Trading Market or on the OTCQX or OTCQB Markets and if prices for the Common Stock are then reported in the “Pink Sheets” published by the OTC Markets Group (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price of one share of Common Stock so reported, as reported by Bloomberg Financial L.P. (or its equivalent successor); or (d) in all other cases, the fair market value of one share of Common Stock as determined by an independent appraiser selected in good faith by the Investor and reasonably acceptable to the

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Company. The VWAP shall be determined without regard to after-hours trading or any other trading outside of the regular trading session hours.

Notwithstanding the foregoing and subject to the satisfaction or waiver of the conditions set forth in Section 6, if the Market Capitalization of the Company is below $50,000,0000 as of the date as of which each of the conditions set forth in Section 2.2(b)(i) and (ii), respectively, are met, the Company and the Investor may agree to issue the Subsequent Note in a lower Principal Amount in exchange for a proportionally lower Funding Amount.

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The Company represents and warrants to the Investor and covenants with the Investor that as of each Closing Date, except as is set forth in the Disclosure Letter being delivered to the Investor as of the date hereof, as applicable (the “Disclosure Letter”), the following representations and warranties are true and correct:

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[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

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If to the Company:

IRIDEX Corporation
1212 Terra Bella Avenue
Mountain View, CA 94043

Telephone: [***]
Email: [***]
Attention: David I. Bruce

 

With a copy (which shall not constitute notice) to:

Wilson Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, CA 94304

Attention: Philip H. Oettinger

 

If to the Investor:

Lind Global Asset Management IX LLC
c/o The Lind Partners LLC
444 Madison Avenue, Floor 41
New York, NY 10022
Telephone: [***]
Email: [***]
Attention: Jeff Easton

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With a copy (which shall not constitute notice) to:

Lucosky Brookman LLP
101 Wood Avenue South
Fifth Floor
Woodbridge, NJ
Telephone: [***]
Email: [***]
Attention: Seth Brookman

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

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[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned have executed this Securities Purchase Agreement as of the date first set forth above.

 

COMPANY: INVESTOR:

 

IRIDEX CORPORATION Lind Global Asset Management IX LLC

 

 

By: /s/ David I. Bruce By:/s/ Jeff Easton

Name: David I. Bruce Name: Jeff Easton

Title: CEO Title: Authorized Signatory

 

 

 

 

 

 

 

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EXHIBIT A

 

NOTE

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THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (WITHIN THE MEANING OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED). UPON WRITTEN REQUEST, ADDRESSED TO [NAME/TITLE] AT [ADDRESS], THE ISSUER WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND ISSUE DATE OF THE NOTE; (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE; AND (3) THE YEILD TO MATURITY OF THE NOTE.

IRIDEX CORPORATION

Senior Convertible Promissory Note

due [_____]1

Note No. [•] $[_]
Dated: [_][_], 202[4][5]2 (the “Issuance Date”)

For value received, IRIDEX Corporation, a Delaware corporation (the “Maker” or the “Company”), hereby promises to pay to the order of Lind Global Asset Management IX LLC, a Delaware limited liability company (together with its successors and representatives, the “Holder”), in accordance with the terms hereinafter provided, the principal amount of [FOUR MILLION TWO HUNDRED THOUSAND DOLLARS ($4,200,000)]3 [ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($1,800,000)]4 (the “Principal Amount”).

 

All payments under or pursuant to this Convertible Promissory Note (this “Note”) shall be made in United States Dollars in immediately available funds to the Holder at the address of the Holder set forth in the Purchase Agreement (as hereinafter defined) or at such other place as the Holder may designate from time to time in writing to the Maker or by wire transfer of funds to the Holder’s account, instructions for which are attached hereto as Exhibit A.

1 Insert date that is 24 months from issuance.

2 Insert Issuance Date.

3 Principal Amount for Initial Note.

4 Principal Amount for Subsequent Note, which may be lowered in accordance with the Purchase Agreement.

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The outstanding principal balance of this Note shall be due and payable on [_____]5 (the “Maturity Date”) or at such earlier time as provided herein. All calculations made pursuant to this Note shall be rounded down to three decimal places.

5 Insert date that is 24 Months from issuance.

6 Amortization amount for Initial Note; Amortization amount for Subsequent to be 1/20th of Principal Amount

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two (2) Trading Days prior to the applicable Payment Date for such Monthly Payment to increase the amount of such Monthly Payment to up to eight hundred thousand dollars ($800,000.00); provided that any such increased Monthly Payment shall be made in Repayment Shares. In respect of any particular Monthly Payment elected to be increased by the Holder, the Holder may provide one or more notices to the Maker of its election to increase such Monthly Payment at least two (2) Trading Days prior to, or at any time following, the applicable Payment Date; provided that such notice shall be provided to the Company before the date that is two (2) Trading Days prior to the next succeeding Payment Date and that the amounts of the increases elected in such notices shall not cause the amount of such Monthly Payment to exceed in the aggregate $800,000.00. Following any such increased Monthly Payment, the amount of such increase shall be deducted from the amount of the last Monthly Payment owing hereunder until such Monthly Payment is reduced to zero and each Monthly Payment immediately preceding such Monthly Payment in reverse chronological order until such preceding Monthly Payment is also reduced to zero. Any Repayment Shares required to be delivered pursuant to this Section 1.3 as a result of notice given by the Holder to increase the Monthly Payment following the applicable Payment Date, will be required to delivered from such notice date in accordance with the time frames set forth in Section 3.2.

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2.1 Events of Default. An “Event of Default” under this Note shall mean the occurrence of any of the events described below:

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2.2 Remedies Upon an Event of Default.

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“THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.”

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[Signature Pages Follow]

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IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed by its duly authorized officer as of the date first above indicated.

IRIDEX CORPORATION

By:

Name: David I. Bruce

Title: Chief Executive Officer

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EXHIBIT A

WIRE INSTRUCTIONS

 

Name of Bank: [***]

Routing #: [***]

For credit to: [***]

Account #: [***]

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EXHIBIT B

FORM OF CONVERSION NOTICE

(To be Executed by the registered Holder in order to convert the Note)

The undersigned hereby irrevocably elects to convert $ ________________ of the principal amount of the above Note No. ___ into Common Stock of IRIDEX Corporation, a Delaware corporation (the “Maker”) according to the conditions hereof, as of the date written below.

Date of Conversion:

Conversion Price:

Number of Shares of Common Stock beneficially owned or deemed beneficially owned by the Holder on the Conversion Date:

 

[HOLDER]

 

 

 

By:

Name:

Title:

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT B

 

FLOW OF FUNDS REQUEST

 

 

IRIDEX Corporation – Securities Purchase Agreement – Flow of Funds Request

 

Capitalized terms used but not otherwise defined in this letter will have the meaning given to such terms in the Agreement.

 

In connection with the Securities Purchase Agreement, dated August 4, 2024 (the “Agreement”) between IRIDEX Corporation (the “Company”) and Lind Global Asset Management IX LLC (the “Investor”), the Company irrevocably authorizes the Investor to distribute such funds as set out below, in the manner set out below, at the Closing.

 

Item	Amount
Closing	$[•]
Commitment Fee	$[•]
Total	$[•]

 

Please transfer the net amount of US $[•] due at the Closing, to the following bank account:

 

Routing #: [***]

Account # [***]

FBO: [***]

Bank: [***]

[Signature Page Follows]

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Yours sincerely,

 

IRIDEX CORPORATION

 

 

By:

Name: David I. Bruce

Title: CEO

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Iridex Announces Convertible Note Financing Exhibit 99.1

 

MOUNTAIN VIEW, Calif., August 5, 2024 -- IRIDEX Corporation (“Iridex”, or the “Company”) (Nasdaq: IRIX), a worldwide leader providing innovative and versatile laser-based medical systems, delivery devices, and procedure probes for the treatment of glaucoma and retinal diseases, today announced it has executed definitive agreements related to a private placement financing (the “Financing”) of a senior convertible promissory note (the “Initial Note”) with Lind Global Asset Management IX LLC, an entity managed by The Lind Partners (together, “Lind”), which will result in net proceeds of approximately $3.5 million at closing. Subject to certain conditions, the Company may issue a subsequent note (the “Subsequent Note”, and together with the Initial Note, the “Notes”) to Lind for additional net proceeds of approximately $1.5 million, for total potential net proceeds of approximately $5 million to the Company. The Financing is subject to customary closing conditions.

 

“This Financing, together with significant expense reductions implemented and prudent capital management, delivers balance sheet liquidity and operating runway as we pursue success with our strategic process,” said David Bruce, Chief Executive Officer of Iridex. “Several benefits make this small financing favorable for the Company, including low risk-adjusted cost of capital, optionality for early pre-payment and potential for reduced dilution given the conversion price premium. We are focused on maintaining solid liquidity runway in the business to reach success with our strategic process and continued growth recovery that will benefit our stockholders.”

 

Each of the Notes has a 24-month term. The Initial Note has a principal amount of $4,200,000 (the “Initial Note Principal Amount”) and the Subsequent Note, if issued, will have a principal amount of $1,800,000 (the “Subsequent Note Principal Amount” and, together with the Initial Note Principal Amount, the “Principal Amount”). The Notes are convertible into shares of the Company’s common stock at an initial price per share of $2.44 (the “Conversion Price”).

 

Under the terms of the Notes, the Principal Amount the Company is required to repay will be reduced to the extent the Company elects to repay the outstanding Principal Amount (i) within 180 days of the issuance of the applicable Note, or (ii) after 180 days but within 365 days of the issuance of the applicable Note. Within 30 days following the issuance of a Note (as applicable), the Company is required to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) to cover Lind’s resale of any shares of the Company’s common stock underlying the applicable Note.

 

Commencing 120 days from the issuance date of the Notes, subject to certain conditions, the Company will begin to repay the outstanding Principal Amount of the applicable Note in twenty consecutive monthly installments. At the Company’s option each month, repayments can be made in cash plus a 4% premium, shares of the Company’s common stock (“Repayment Shares”) or a combination of cash and Repayment Shares.

 

About The Lind Partners

The Lind Partners manages institutional funds which invest in small-cap and mid-cap companies publicly traded in the US, Canada, Australia and the UK. Lind’s multi-strategy funds make direct investments ranging from $1 to $30 million, invest in syndicated equity placements and selectively buy on market. Having completed more than 200 direct investments, totaling over $2 billion in transaction value, Lind’s funds have been flexible and supportive capital partners to investee companies since 2011.

 

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About Iridex Corporation

Iridex Corporation is a worldwide leader in developing, manufacturing, and marketing innovative and versatile laser-based medical systems, delivery devices and consumable instrumentation for the ophthalmology market. The Company’s proprietary MicroPulse® technology delivers a differentiated treatment that provides safe, effective, and proven treatment for targeted sight-threatening eye conditions. Iridex’s current product line is used for the treatment of glaucoma and diabetic macular edema (DME) and other retinal diseases. Iridex products are sold in the United States through a direct sales force and internationally primarily through a network of independent distributors into more than 100 countries. For further information, visit the Iridex website at www.iridex.com.

 

© 2024 Iridex Corporation. All rights reserved.

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, including those statements concerning the expected closing of the Financing, value-maximizing transactions, dilution and the anticipated filing of a registration statement in connection with the Financing. The Company can provide no assurance that it will complete any value-maximizing transactions on behalf of its stockholders. These statements are not guarantees of future performance and actual results may differ materially from those described in these forward-looking statements as a result of a number of factors. Please see a detailed description of these and other risks contained in our Annual Report on Form 10-K filed with the SEC on March 29, 2024 and our Quarterly Report on Form 10-Q filed with the SEC on May 14, 2024. Forward-looking statements contained in this announcement are made as of this date and will not be updated.

 

Investor Relations Contact

Philip Taylor

Gilmartin Group

investors@iridex.com

 

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