Sonic Foundry Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Bankruptcy or Receivership, Regulation FD Disclosure, Financial Statements and Exhibits

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

 

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

 

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions

 

 

 

 

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01         Entry into a Material Definitive Agreement

 

The information set forth under Item 2.03 of this Current Report regarding the Loan and regarding the Financing Agreement (as defined below) is incorporated by reference into this Item 1.01.

 

Item 1.03 Bankruptcy or Receivership.

 

Sonic Foundry previously announced on March 21, 2024, that it gave an Assignment for the Benefit of Creditors to an intended Receiver and the intended Receiver petitioned the Dane County Circuit Court in Wisconsin (the “Court”), to appoint himself as receiver (the “Receiver”) of all assets of Sonic Foundry, Inc. (the “Company”). On March 26, 2024 the Court issued an order approving Seth E. Dizard as the Receiver. The Receiver will have broad powers and authority to take possession of, and protect and preserve, all of the assets of the Company, and administer the estate in accordance with Wis. Stats. Ch. 128. Accordingly, the Receiver will be empowered to sell all of the assets of the Company (together or separately) and distribute the proceeds of such sale to the Company’s creditors in a manner approved by the Court. The filing of a petition for a receiver is considered an event of default under the Company’s Secured Promissory Note and Security Agreement with Mark Burish (“Burish Note and Security Agreement”). The Company’s shareholders will not receive distributions in the receivership.

 

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

On March 26, 2024 the Court issued an order approving post-petition financing between Mark Burish as lender (“Lender”) and Seth E. Dizard in his capacity as Receiver for Sonic Foundry (the “Loan”). the Loan is in the form of a Financing Agreement with the Lender (the “Financing Agreement”), which provides for an initial advance of $50,000 upon entry of the order approving the Loan and for further advances in the sole discretion of the Lender and subject to documentation and at such interest rates as Lender shall in his sole discretion requires. The Lender will have a super-priority security interest in all assets of Sonic Foundry and the Loan matures automatically upon the occurrence of any of the following:

 

 

The Financing Agreement include customary covenants, representations and warranties of the type required of court-appointed receivers, including but not limited to an obligation to use the proceeds of the loans in accordance with a budget approved by the Lender.

 

The foregoing description of the Financing Agreement does not purport to be complete and is subject to, and qualified in its entirety by the full text of the Financing Agreement filed as an exhibit hereto.

 

 

 

Additional information about the Receivership filing, including access to Court records, is available online at Wisconsin Circuit Court, Dane County Wisconsin at wcca.wicourts.gov or in person at the Dane County Wisconsin Clerk of Courts’ Record Center located at 215 S. Hamilton St, Room 1000, Madison, WI 53703.

 

The documents and other information available via website or elsewhere are not part of this Current Report on Form 8-K and shall not be deemed incorporated therein.

 

The information contained in this Item 7.01 of this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

Cautionary Note Regarding the Company’s Securities

The Company cautions that trading in the Company’s securities during the pendency of the receivership is highly speculative and poses substantial risks. Trading prices for the Company’s securities may bear little or no relationship to the actual recovery, if any, by holders of the Company’s securities in the receivership. The Company expects that holders of shares of the Company’s common stock could experience a significant or complete loss on their investment, depending on the outcome of the receivership. Accordingly, the Company urges extreme caution with respect to existing and future investments in its common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

(Registrant)