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Arena (AREN) - 2024 Q2 - Quarterly Results
ARENArena (AREN)2024-08-23 12:40

Corporate Actions - The Company authorized the sale and issuance of 17,797,817 shares of common stock in a private placement [3]. - The purchase price for the shares is set at 15,000,000,whichwillbepaidthroughareductionoftheoutstandingprincipalbalanceofaDemandPromissoryNote[4].−Thecompletionofthesaleandpurchaseoftheshares(the"Closing")isscheduledtooccurassoonaspracticablefollowingthesatisfactionofspecifiedconditions[4].−TheShareswillbedulyauthorizedand,whenissued,willbefullypaidandnonassessable[14].FinancialCondition−TheconsolidatedfinancialstatementsfiledwiththeSECcompliedwithapplicablerulesandregulationsandfairlypresentthefinancialpositionoftheCompany[11].−SinceJune30,2024,therehasbeennomaterialadversechangeintheCompany′sfinancialconditionorresultsofoperations[19].−TheCompanyhasnotdeclaredorpaidanydividendordistributiononitscapitalstocksinceJune30,2024[19].−TheCompanyhasfiledallnecessaryfederal,state,local,andforeignincomeandfranchisetaxreturnsandhaspaidoraccruedalltaxesshownasduethereon[27].−TheCompanyhasnoknowledgeofanytaxdeficienciesthathavebeenormightbeassertedagainstitbyanytaxingjurisdiction[27].ComplianceandGovernance−TheCompanyisnotinviolationofitscertificateofincorporationorbylawsandisconductingitsbusinessincompliancewithapplicablelaws[18].−NoconsentorapprovalfromanygovernmentalauthorityisrequiredfortheconsummationofthetransactionscontemplatedbythisAgreement[17].−TheCompanyisincompliancewithallapplicablerequirementsoftheSarbanes−OxleyActof2002,withnomaterialadverseeffectsreported[37].−TheCompanyhasestablishedandmaintainseffectivedisclosurecontrolsandprocedurestoensurematerialinformationiscommunicatedtoitsprincipalexecutiveandfinancialofficers[30].−TheCompanyhascompliedwithSECrulesregarding"badactor"disqualifications,confirmingnoCoveredPersonissubjecttodisqualificationevents,exceptasspecifiedunderRule506(d)(2)or(d)(3)[44].InsuranceandIntellectualProperty−TheCompanymaintainsinsurancethatitbelievesisadequateforitsbusiness,coveringallrealandpersonalpropertyagainsttheft,damage,anddestruction[27].−TheCompanyhasownershiporlegalrightstoallnecessaryintellectualpropertyusedinitsbusiness,andbelievesithastakenreasonablestepstoprotecttheserights[21].MarketandStockInformation−TheCompany′scommonstockisregisteredundertheSecuritiesExchangeActandislistedontheNYSEAmerican,withnocurrentnon−complianceissuesreported[25].−TheCompanyhasnotreceivedanynoticesregardingnon−compliancewithlistingrequirementsfromthePrincipalMarket[25].−TheCompanyaimstomaintaintheautomatedquotationofitsCommonStockonthePrincipalMarketoranalternativelistingonNasdaqorNYSE[67].PurchaserInformation−ThePurchaserisacquiringtheSharesforitsownaccountandnotforresaleinconnectionwithanypublicoffering,maintainingtherighttodisposeoftheSharesatanytime[47].−ThePurchaseracknowledgesthattheShareshavenotbeenregisteredundertheSecuritiesActandmustbeheldindefinitelyunlessasubsequentdispositionisregisteredorexempt[48].−ThePurchaserisan"accreditedinvestor"asdefinedinRule501(a)oftheSecuritiesAct[54].−ThePurchaserhasindependentlyevaluatedthemeritsofthetransactionsandhashadtheopportunitytoaskquestionsandreceiveanswersfromtheCompany[57].−ThePurchaseragreesnottoengageinanyshortsaleoftheCompany′svotingstockoranyhedgingtransactioninvolvingtheCompany′ssecurities[58].AgreementTerms−TheCompany′sobligationtoissueandselltheSharesiscontingentuponthePurchaserdeliveringthePurchasePriceof15,000,000, which will be paid through a reduction of the outstanding principal balance of a Demand Promissory Note [4]. - The completion of the sale and purchase of the shares (the "Closing") is scheduled to occur as soon as practicable following the satisfaction of specified conditions [4]. - The Shares will be duly authorized and, when issued, will be fully paid and nonassessable [14]. Financial Condition - The consolidated financial statements filed with the SEC complied with applicable rules and regulations and fairly present the financial position of the Company [11]. - Since June 30, 2024, there has been no material adverse change in the Company's financial condition or results of operations [19]. - The Company has not declared or paid any dividend or distribution on its capital stock since June 30, 2024 [19]. - The Company has filed all necessary federal, state, local, and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon [27]. - The Company has no knowledge of any tax deficiencies that have been or might be asserted against it by any taxing jurisdiction [27]. Compliance and Governance - The Company is not in violation of its certificate of incorporation or bylaws and is conducting its business in compliance with applicable laws [18]. - No consent or approval from any governmental authority is required for the consummation of the transactions contemplated by this Agreement [17]. - The Company is in compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002, with no material adverse effects reported [37]. - The Company has established and maintains effective disclosure controls and procedures to ensure material information is communicated to its principal executive and financial officers [30]. - The Company has complied with SEC rules regarding "bad actor" disqualifications, confirming no Covered Person is subject to disqualification events, except as specified under Rule 506(d)(2) or (d)(3) [44]. Insurance and Intellectual Property - The Company maintains insurance that it believes is adequate for its business, covering all real and personal property against theft, damage, and destruction [27]. - The Company has ownership or legal rights to all necessary intellectual property used in its business, and believes it has taken reasonable steps to protect these rights [21]. Market and Stock Information - The Company's common stock is registered under the Securities Exchange Act and is listed on the NYSE American, with no current non-compliance issues reported [25]. - The Company has not received any notices regarding non-compliance with listing requirements from the Principal Market [25]. - The Company aims to maintain the automated quotation of its Common Stock on the Principal Market or an alternative listing on Nasdaq or NYSE [67]. Purchaser Information - The Purchaser is acquiring the Shares for its own account and not for resale in connection with any public offering, maintaining the right to dispose of the Shares at any time [47]. - The Purchaser acknowledges that the Shares have not been registered under the Securities Act and must be held indefinitely unless a subsequent disposition is registered or exempt [48]. - The Purchaser is an "accredited investor" as defined in Rule 501(a) of the Securities Act [54]. - The Purchaser has independently evaluated the merits of the transactions and has had the opportunity to ask questions and receive answers from the Company [57]. - The Purchaser agrees not to engage in any short sale of the Company's voting stock or any hedging transaction involving the Company's securities [58]. Agreement Terms - The Company's obligation to issue and sell the Shares is contingent upon the Purchaser delivering the Purchase Price of 15,000,000 in the form of a reduction of the outstanding principal balance of the Note [64]. - The Company will use reasonable efforts to file all required reports with the SEC in a timely manner to enable the Purchaser to sell the Shares without registration [66]. - The Purchaser will not receive any material non-public information unless a confidentiality agreement is executed [68]. - The Agreement is governed by the laws of the State of New York and the federal laws of the United States [69]. - The Company and the Purchaser will bear their own expenses and legal fees related to the Agreement [72]. - All covenants, agreements, representations, and warranties made by the Company and the Purchaser will survive the execution of the Agreement [75]. - The Agreement may be executed by facsimile or electronic signature and in multiple counterparts [75]. - The Purchaser's address for notice is 38955 Hills Tech Drive, Farmington Hills, MI 48331 [77].