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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): October 24, 2025
Snail,
Inc.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
001-41556 |
|
88-4146991 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
Number) |
12049
Jefferson Blvd
Culver
City, CA 90230
(Address
of principal executive offices) (Zip Code)
+1
(310) 988-0643
(Registrant’s
telephone number, including area code)
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:
| ☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which
registered |
| Class
A Common Stock, $0.0001 par value per share |
|
SNAL |
|
The
Nasdaq Stock Market LLC |
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 Material Definitive Agreement.
Convertible
Promissory Note Offering; Securities Purchase Agreement
On
October 24, 2025, Snail, Inc. (the “Company”) entered into a securities purchase agreement (the “Securities Purchase
Agreement”) with an accredited investor (the “Investor”). Pursuant to the terms and conditions of the Securities Purchase
Agreement, the Investor agreed to purchase from the Company in a private placement offering (the “Offering”) an unsecured
convertible promissory Note in the aggregate principal amount of $2,200,000 (the “Note”). The Note had a purchase price of
$2,000,000 due to the inclusion of a 10% original issuance discount (“OID”).
The
Company will pay a one-time interest charge on the principal amount of the Note at a rate of 5% when such amounts become due and payable,
whether at maturity or upon acceleration or by prepayment or otherwise, as further provided herein. The maturity date is twelve (12)
months from the date of issuance (the “Maturity Date”), and is the date upon which the principal amount (which includes the
OID) and any accrued and unpaid interest and other fees, is due and payable.
Any
outstanding principal or interest on the Note that is not paid when due will bear interest at the rate of the lesser of: (i) 10% per
annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid. Upon the occurrence of an event
of default that has not been cured, the Note will become immediately due and payable. In addition, upon an event of default, the Company
will be required to pay an amount equal to the principal amount then outstanding plus accrued interest through the date of full repayment
multiplied by 120%, plus applicable costs and fees. The Company may prepay the outstanding principal amount and interest due under the
Note subject to certain restrictions.
The
Investor has the right at any time (subject to certain ownership limitations) to convert all or any portion of the then outstanding and
unpaid principal amount of the Note into shares (the “Conversion Shares”) of the Company’s Class A common stock, par
value $0.0001 per share (the “Class A Common Stock”). The per share conversion price (the “Conversion Price”)
at which principal and interest under the Note will be convertible into shares of Class A Common Stock is $5.00, subject to adjustment
as provided in the Note, provided, however, that with respect to $577,500 of the outstanding amount of the Note, the Conversion Price
equals the lesser of (i) $5.00, or (ii) the Market Price (which is defined as mean 92% of the lowest dollar volume weighted average price
(the “VWAP”) on any trading day during the five (5) trading days prior to the respective conversion date. “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (as defined
in the Note) during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg
or other similar quotation service provider designated by the Investor.
Pursuant
to the Note, the Company will, at all times, reserve from its authorized and unissued shares of Class A common stock a sufficient number
of shares to provide for the issuance of the Conversion Shares equal to the greater of: (i) an aggregate of 3,275,046 shares of Class
A Common Stock, and (ii) an amount equal to: (a) the number of Conversion Shares issuable upon the full conversion of the Note (assuming
no payment of the principal amount or interest) at a conversion price equal to the Conversion Price multiplied by (b) 1.5.
The
Note are ranked as a senior unsecured obligation of the Company with priority over all existing and future unsecured indebtedness.
This
Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of any offer to buy the Note or the Conversion Shares,
nor shall there be an offer, solicitation or sale of the Note or the Conversion Shares in any state in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the securities laws of such state.
The
Securities Purchase Agreement and the Note also contain customary representations, warranties, indemnification provisions and closing
conditions. The representations, warranties and covenants contained in the Securities Purchase Agreement and Note were made only for
purposes of the Securities Purchase Agreement and Note and as of specific dates, were solely for the benefit of the parties to such Agreement
and are subject to certain important limitations.
The
foregoing is a summary description of certain terms of the Securities Purchase Agreement and the Note. For a full description of all
terms, please refer to the copies of the form of the Securities Purchase Agreement and the Note that are filed herewith as Exhibit 10.1
and Exhibit 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Registration
Rights Agreement
On
October 24, 2025, the parties entered into a registration rights agreement (the “Registration Rights Agreement”), which grants
the Investor certain customary registration rights in connection with the Offering with respect to the Conversion Shares. In accordance
with the terms and conditions of the Registration Rights Agreement, the Company shall prepare and file with the SEC a registration statement
on Form S-1 or Form S-3 (the “Registration Statement”) registering the resale of the Conversion Shares within 90 days and
have such registration statement effective by within 120 days after the execution of the Registration Rights Agreement (the “Effectiveness
Deadline”); provided, that if the Securities and Exchange Commission (the “SEC”) is closed for operations due to a
government shutdown or lapse in appropriations after the date on which the Company initially filed the Registration Statement with the
SEC, the Effectiveness Deadline shall be extended by the same number of calendar days that the SEC remains closed and/or shutdown for
operations after the date on which the Company initially filed the Registration Statement with the SEC
The
foregoing is a summary description of certain terms of the Registration Rights Agreement. For a full description of all terms, please
refer to a copy of the form of the Registration Rights Agreement that is filed herewith as Exhibit 10.2 to this Current Report on Form
8-K and is incorporated herein by reference.
Stockholder
Approval
The
holders of a majority of the issued and outstanding voting securities of the Company approved (the “Stockholder Approval”),
for purposes of Nasdaq Listing Rule 5635(d), by written consent in lieu of a special meeting dated February 20, 2025, the sale by the
Company of the Note to the Investors and the issuance by the Company of the shares of Class A common stock issuable upon conversion of
the Note that exceed 20% or more of the Class A Common Stock outstanding before the issuance of the Note. A definitive information statement
on Schedule 14C was filed with the SEC on April 23, 2025 with respect to the Stockholder Approval.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off Balance Sheet Arrangement of a Registrant.
The
description of the Note described in Item 1.01 is incorporated herein by reference.
Item
3.02. Unregistered Sales of Equity Securities.
The
disclosure set forth in Item 1.01 above is hereby incorporated herein by reference in this Item 3.02. The issuance of the Note and the
Conversion Shares was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities
Act.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
| Exhibit
Number |
|
Exhibit
Description |
| 4.1 |
|
Form of Convertible Promissory Note, dated October 24, 2025 |
| 10.1 |
|
Form of Securities Purchase Agreement, dated October 24, 2025 |
| 10.2 |
|
Form of Registration Rights Agreement, dated October 24, 2025 |
| 104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
| |
SNAIL,
INC. |
| |
|
|
| Date:
October 30, 2025 |
By: |
/s/
Hai Shi |
| |
Name: |
Hai
Shi |
| |
Title: |
Founder,
Chief Executive Officer, Chief Strategy Officer and Chairman of the Board of Directors |
