Item
1.01 Entry into a Material Definitive Agreement.
Additional
Interim Financing
On
February 19, 2020, Synthesis Energy Systems, Inc. (the “Company”) entered into a securities purchase agreement (the
“Securities Purchase Agreement”) with certain holders of the Company’s 11% Senior Secured Convertible Debentures,
pursuant to which, among other things, the holders purchased, in accordance with a private placement offering of the Company,
$450,000 in principal amount of additional 11% Senior Secured Convertible Debentures (together, the “Additional Interim
Debentures”) and warrants exercisable for up to 300,004 shares of common stock, half of which are Series A common stock
purchase warrants and half of which are Series B common stock purchase warrants (together, the “Additional Interim Warrants”).
The Additional Interim Debentures and Additional Interim Warrants are issued on substantially the same terms as the debentures
and warrants issued in October 2019, provided that the debentures include an adjustment to the conversion price in the event of
certain dilutive equity issuances by the Company.
As
compensation for its services, the Company paid to T.R. Winston & Company, LLC (the “Placement Agent”): (i) a
cash fee of $31,500 (representing an aggregate fee equal to 7% of the face amount of the Additional Interim Debentures); and (ii)
a warrant to purchase 22,500 shares of Common Stock (the “Placement Agent Warrant”). We have also agreed to reimburse
certain expenses of the Placement Agent. The Placement Agent Warrant has been issued on substantially the same terms as the Additional
Interim Warrants.
The
foregoing summary does not purport to be complete and is qualified in its entirety by reference to the forms of the Securities
Purchase Agreement, the Additional Interim Debentures and the Additional Interim Warrants which are filed herewith as Exhibits
10.1, 10.2, 10.3 and 10.4 hereto and incorporated by reference herein in their entirety.
Additional
AFE Loan
On
February 18, 2020, the Company entered into an amended loan agreement (the “Loan Agreement”) with Australian Future
Energy Pty Ltd (“AFE”), amending the loan agreement entered into with AFE in October 2019. The Loan Agreement contemplates
that the Company will loan a portion of the $2,450,000 proceeds that it received under the securities purchase and exchange agreement
dated October 10, 2019 between the Company and certain of the holders of the Company’s 11% Senior Secured Convertible Debentures
issued in October 2017 (the “Purchase and Exchange Agreement”), as well as under the Securities Purchase Agreement.
The
Company previously loaned $350,000 to AFE at the time of entering into the original loan agreement, and has loaned an additional
$100,000 out of the proceeds of the Additional Interim Debentures. An additional $115,000 will be loaned to AFE upon the receipt
of the next tranche of funds by the Company under the Purchase and Exchange Agreement. These loaned amounts are due in full within
five days following the closing of the transactions contemplated by the Agreement and Plan of Merger by and among the Company,
SES Merger Sub, Inc. and AFE dated October 10, 2019. If the merger transaction does not close, the loan will mature three months
following the special meeting of the Company’s stockholders called to approve the merger transactions. The loan accrues
interest at 11% per annum and is also due in full upon repayment, subject to an increased default interest rate in certain limited
circumstances.
The
foregoing summary does not purport to be complete and is qualified in its entirety by reference to the form of the Loan Agreement
which is filed herewith as Exhibit 10.4 hereto and incorporated by reference herein in its entirety.
Amendment
to Merger Agreement
On
February 21, 2020, the Company, AFE and SES Merger Sub, Inc. (“Merger Sub”) entered into an amendment to the Agreement
and Plan of Merger dated October 10, 2019 by and among SES, AFE and Merger Sub (the “Merger Agreement”). The amendment
extends the outside date for termination of the Merger Agreement from April 15, 2020 to May 11, 2020.
The
foregoing summary does not purport to be complete and is qualified in its entirety by reference to the form of the amendment which
is filed herewith as Exhibit 2.1 hereto and incorporated by reference herein in its entirety.