CISO Global enter $15M convertible preferred equity facility

CISO Global (CISO) entered into a private financing arrangement with a fund managed by B. Riley Securities Holdings, pursuant to which the Company has the right, but not an obligation, to sell up to $15 million of a newly created series of convertible preferred stock to B. Riley. The convertible preferred stock issuable under the equity facility has a stated value and purchase price of $1,000 per share, bears no preferred return or preferred dividends, and will be sold at an original issue discount of four percent. The Facility has a term of 18 months, over which the Company can draw up to $15 million at its discretion, in an initial increment of $2.3 million and then up to $500,000 weekly, as long as certain conditions are met. CISO retains full control over the timing and amount of any sales to B. Riley, with no obligation to utilize any of the $15 million available under the Facility. Draws cannot be initiated by B. Riley, and there are no minimum commitments or penalties for non-use. The Company plans to use the proceeds from draws under the Facility to fund expansion initiatives, particularly the scaling of its cybersecurity software business in the insurance channel through its strategic relationship with CAGI. The preferred stock issuable under the Facility is convertible into shares of the Company’s common stock, after such time that a registration statement covering their resale is declared effective by the U.S. Securities and Exchange Commission, at a conversion price of 105% of the lowest daily VWAP over the five trading days prior to the conversion date for the initial draw and for all subsequent draws at 95% of the lowest daily VWAP over the five trading days prior to the conversion date, in each case subject to a floor of $0.40 and adjustment as set forth in the definitive documents. Sales under the Facility are subject to a beneficial ownership cap of 9.99% of the Company’s outstanding common stock at any one time, and a 19.99% blocker provision to comply with NASDAQ Listing Rules, along with other restrictions and conditions outlined in the definitive documents. The preferred stock is subject to redemption by the Company, for cash, in lieu of conversion, upon the occurrence of certain events.