Item 1.01 Entry into a Material Definitive Agreement.
On August 29, 2022, Hempacco Co., Inc. (the "Company") entered into an
underwriting agreement with Boustead Securities, LLC, as representative (the
"Representative") of the underwriters (the "Underwriters") in connection with
the initial public offering of the Company (the "IPO"). The Underwriting
Agreement provides for the offer and sale of 1,000,000 shares of the Company's
common stock, par value $0.001 (the "Common Stock") at a price to the public of
$6.00 per share (the "Offering"). In connection therewith, the Company agreed to
issue 70,000 warrants to purchase shares of Common Stock, exercisable from
September 1, 2022, through August 29, 2027, and initially exercisable at $9.00
per share subject to adjustment as provided therein (the "Representative's
Warrants"). The Company also granted the Underwriters an option for a period of
45 days to purchase up to an additional 150,000 shares of Common Stock. The
Offering is being made pursuant to a Registration Statement on Form S-1 (File
No. 333-263805) (the "Registration Statement"), which was declared effective by
the Securities and Exchange Commission on August 29, 2022.
The Underwriting Agreement includes customary representations, warranties and
covenants by the Company. It also provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), or contribute to
payments the Underwriter may be required to make because of any of those
liabilities.
On September 1, 2022, the Offering was completed. At the closing, the Company
(i) sold 1,000,000 shares of Common Stock for total gross proceeds of
$6,000,000, and (ii) issued the Representative's Warrants. After deducting the
underwriting commission and expenses, the Company received net proceeds of
$5,484,015.
Upon effectiveness of the Registration Statement, on August 29, 2022, the
Company also entered into indemnification agreements (collectively the
"Indemnification Agreements") with the Company's executive officers and
directors (Sandro Piancone, Neville Pearson, Jorge Olson, Stuart Titus, Jerry
Halamuda, and Miki Stephens) providing, among other things, for (i)
indemnification of the officers and directors to the fullest extent permitted by
law and the Company's articles of incorporation and bylaws against any and all
expenses, judgments, fines, penalties and amounts paid in settlement of any
claim; and (ii) the advancement or payment of all expenses to the indemnitee and
for reimbursement to the Company if it is found that such indemnitee is not
entitled to such indemnification under applicable law and the Company's articles
of incorporation and bylaws.
Finally, in connection with the effectiveness of the Registration Statement and
the appointment of Miki Stephens as a member of the Board of Directors (as
disclosed in Item 5.02 herein), effective as of September 29, 2022, the Company
entered an independent director agreement (the "Independent Director Agreement")
with Ms. Stephens, pursuant to which Ms. Stephens would serve as director of the
Company until removal or resignation, and with compensation terms reserved for
future determination by the Company and Ms. Stephens.
The foregoing descriptions of the Underwriting Agreement, Representative's
Warrants, Indemnification Agreements, and Indemnification Agreement do not
purport to be complete and are qualified in their entirety by reference to the
full text of the Underwriting Agreement, Representative's Warrants,
Indemnification Agreements, and Independent Director Agreement attached hereto
as Exhibit 1.1, Exhibit 4.1, Exhibit 10.1-10.6, and Exhibit 10.7, respectively,
and incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The disclosure in Item 1.01 is incorporated by reference into this Item 5.02.
Upon effectiveness of the Registration Statement, on August 29, 2022, Miki
Stephens was appointed a member of the Company's Board of Directors (the
"Board"). Ms. Stephens will be a member of the Company's Audit Committee and
Compensation Committee, and will serve as the Chair of the Company's Nominating
and Corporate Governance Committee.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
1.1 Underwriting Agreement, dated August 29, 2022, by and between
Hempacco Co., Inc. and Boustead Securities, LLC
4.1 Representative's Warrant
10.1 Indemnification Agreement, dated August 29, 2022, by and between
Hempacco Co., Inc. and Sandro Piancone
10.2 Indemnification Agreement, dated August 29, 2022, by and between
Hempacco Co., Inc. and Neville Pearson
10.3 Indemnification Agreement, dated August 29, 2022, by and between
Hempacco Co., Inc. and Jorge Olson
10.4 Indemnification Agreement, dated August 29, 2022, by and between
Hempacco Co., Inc. and Stuart Titus
10.5 Indemnification Agreement, dated August 29, 2022, by and between
Hempacco Co., Inc. and Jerry Halamuda
10.6 Indemnification Agreement, dated August 29, 2022, by and between
Hempacco Co., Inc. and Miki Stephens
10.7 Independent Director Agreement, dated August 29, 2022, by and
between Hempacco Co., Inc. and Miki Stephens
104 Cover Page Interactive Data File (embedded within the Inline XBRL
Document)
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