| Item 1.01 | Entry into a Material Definitive Agreement. |
On
June 5, 2023, BitNile Metaverse, Inc., a Nevada corporation (the “Company,” “we,” “us” or “our”),
entered into a purchase agreement (the “ELOC Purchase Agreement”) with Arena Business Results, LLC (“Arena”),
which provides that, upon the terms and subject to the conditions and limitations set forth therein, we have the right to direct Arena
to purchase up to an aggregate of $100,000,000 of shares of our common stock over the 36-month term of the ELOC Purchase Agreement. Under
the ELOC Purchase Agreement, after the satisfaction of certain commencement conditions, including, without limitation, the effectiveness
of the Registration Statement (as defined in the ELOC Purchase Agreement), we have the right to present Arena with an advance notice (each,
an “Advance Notice”) directing Arena to purchase any amount up to the Maximum Advance Amount (as described below).
The
Maximum Advance Amount shall be calculated as follows: (a) if the Advance Notice is received by 8:30 a.m. Eastern Time, the lower of:
(i) an amount equal to forty percent of the average of the Daily Value Traded (as defined in the ELOC Purchase Agreement) of the Company’s
common stock on the ten Trading Days (as defined in the ELOC Purchase Agreement) immediately preceding an Advance Notice, or (ii) $20,000,000,
and (b) if the Advance Notice is received after 8:30 a.m. Eastern Time but prior to 10:30 a.m. Eastern Time, the lower of (i) an amount
equal to thirty percent of the average of the Daily Value Traded of Common Shares on the ten (10) Trading Days immediately preceding an
Advance Notice, or (ii) $15,000,000.
The
number of shares that we can issue to Arena from time to time under the ELOC Purchase Agreement shall be subject to the Ownership Limitation
(as defined in the ELOC Purchase Agreement). In addition, Arena will not be required to buy any shares of our common stock pursuant to
an Advance Notice on any trading day on which the closing trade price of our common stock is below $0.952. We will control the timing
and amount of sales of our common stock to Arena. Arena has no right to require any sales by us, and is obligated to make purchases from
us as directed solely by us in accordance with the ELOC Purchase Agreement. The ELOC Purchase Agreement provides that we will not be required
or permitted to issue, and Arena will not be required to purchase, any shares under the ELOC Purchase Agreement if such issuance would
violate Nasdaq rules, and we may, in our sole discretion, determine whether to obtain stockholder approval to issue shares in excess of
19.99% of our outstanding shares of common stock if such issuance would require stockholder approval under Nasdaq rules. Arena has agreed
that neither it nor any of its agents, representatives and affiliates will engage in any direct or indirect short-selling or hedging our
common stock during any time prior to the termination of the ELOC Purchase Agreement.
Pursuant
to the ELOC Purchase Agreement, the Company agreed to prepare and file with the Securities and Exchange Commission a Registration Statement
for the resale by Arena of Registrable Securities (as defined in the ELOC Purchase Agreement) upon the later of (i) within fifteen calendar
days after the Company files its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (or as such other date as provided
in the Agreement), (ii) such time as the aggregate market value of the voting and non-voting common equity held by non-affiliates of the
Company exceeds $5,000,000 or (iii) such later date determined by the parties in writing, but in the case of clauses (i) and (ii) not
later than September 30, 2023.
In
consideration for Arena’s execution the ELOC Purchase Agreement, the Company is required to issue to Arena, as a commitment fee,
a number of common stock having an aggregate dollar value equal to $4,000,000 (“Commitment Fee Shares”). Within one business
day of the effectiveness of the Registration Statement, the Company shall deliver irrevocable instructions to its transfer agent to electronically
transfer to Arena that number of common stock having an aggregate dollar value equal to $1,000,000 based on the per common stock price,
which price shall be equal to the simple average of the daily VWAP (as defined in the ELOC Purchase Agreement) of the common stock during
the ten Trading Days immediately preceding the effectiveness of the Registration Statement (the “Initial Issuance”). The Company
shall deliver irrevocable instructions to its transfer agent to electronically transfer Arena that number of common stock having an aggregate
dollar value equal $3,000,000 based on the per common stock price as follows: (i) $1,000,000 worth of the Commitment Fee Shares on the
three month anniversary of the Initial Issuance based on the per common stock price which price shall be equal to the simple average of
the daily VWAP of the common stock during the ten Trading Days immediately preceding the three month anniversary, (ii) $1,000,000 worth
of the Commitment Fee Shares on the six month anniversary of the Initial Issuance based on the per common stock price which price shall
be equal to the simple average of the daily VWAP of the common stock during the ten Trading Days immediately preceding the six month anniversary
and (iii) $1,000,000 worth of the Commitment Fee Shares on the nine month anniversary of the Initial Issuance based on the per common
stock price which price shall be equal to the simple average of the daily VWAP of the common stock during the ten Trading Days immediately
preceding the nine month anniversary.
The
ELOC Purchase Agreement may also be terminated by us at any time after commencement, at our discretion; provided, however, upon early
termination we are required to issue the outstanding Commitment Fee Shares to Arena. Further, the
ELOC Purchase Agreement will automatically terminate on the date that we sell, and Arena purchases, the full $100,000,000 amount under
the agreement or, if the full amount has not been purchased, on the expiration of the 36-month term of the ELOC Purchase Agreement.
The
foregoing description of the ELOC Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to
the full text the ELOC Purchase Agreement, which is filed as Exhibit 10.1 and is incorporated herein by reference.