Far from it. Ok here is just some of what 10/25 offering that lincoln park got from it.
An aggregate of $50,000,000 of Common Stock and up to 269,397 shares of Common Stock may be offered for sale and sold from time to time pursuant to this prospectus by the Selling Security Holder and its respective transferees, distributees, pledgees, donees, assignees or other successors. Except as may be set forth in any accompanying prospectus supplement, we will pay all of the expenses in connection with the registration and the sale of the shares, other than selling commissions and the fees and expenses of counsel and other advisors to the Selling Security Holder. We will not receive any proceeds from the sale of shares by the Selling Security Holder. Information concerning the Selling Security Holder may change from time to time, and any changed information will be set forth if and when required in the applicable prospectus supplements.
On October 21, 2015, the Company entered into the Purchase Agreement with the Selling Security Holder. In connection with the Financing, the Company also entered into the RRA whereby the Company agreed to file a registration statement with the SEC covering the shares of the Company’s Common Stock that may be issued to the Selling Security Holder under the Purchase Agreement. The shares being registered hereunder are being registered pursuant to the terms of the RRA.
After the SEC has declared effective this registration statement related to the Financing, the Company has the right, in its sole discretion over a 36-month period, to sell to the Selling Security Holder up an aggregate commitment of $50,000,000 of shares of Common Stock. The Company controls the timing and amount of any future sales, if any, of shares of common stock to the Selling Security Holder.
The Purchase Agreement contains customary representations, warranties, covenants, closing conditions and indemnification and termination provisions by, among and for the benefit of the parties. The Selling Security Holder has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s Common Stock.
In consideration for entering into the Purchase Agreement, the Company issued to the Selling Security Holder, 179,598 shares of Common Stock as a commitment fee and shall issue up to 89,799 shares pro rata, when and if, the Selling Security Holder purchases at the Company’s discretion the $50,000,000 aggregate commitment. For example, if we elect, at our sole discretion, to require the Selling Security Holder to purchase $100,000 of our stock then we would issue 180 shares of the pro rata commitment fee which is the product of $100,000 (the amount we have elected to sell) divided by $50,000,000 (the amount we can sell the Selling Security Holder under the Purchase Agreement multiplied by 89,799 (the total number of pro rata commitment shares). The pro rata commitment shares will only be issued pursuant to this formula as and when we elect at our discretion to sell stock to the Selling Security Holder. The Selling Security Holder may not assign or transfer its rights and obligations under the Purchase Agreement. The Purchase Agreement may be terminated by the Company at any time at its discretion without any cost to the Company.
Pursuant to the Registration Rights Agreement, dated as of October 21, 2015, among the Selling Security Holder and the Company, the Selling Security Holder has the right to request that the Company include their shares on the registration statement of which this prospectus forms a part under the Securities Act. Under the Registration Rights Agreement, the Selling Security Holder has registration rights with respect to the shares of Common Stock set forth in the table below.
As of October 19, 2015, the Selling Security Holder beneficially owned, in the aggregate, 70,000 shares of Common Stock, or 0.21% of our outstanding Common Stock. We cannot provide an estimate as to the number of shares of common stock that will be held by the Selling Security Holder upon consummation of any offering or offerings covered by this prospectus because the Selling Security Holder may offer some, all or none of their shares of Common Stock in any such offering or offerings. The Selling Security Holder does not and has not within the past three years had, any position, office or material relationship with us or any of our predecessors or affiliates.
Percentage of Percentage of
Outstanding Outstanding
Shares Shares
Shares Beneficially Beneficially Beneficially
Owned Before this Owned Before No. of Shares to be Owned After
Selling Shareholder Offering this Offering Re gistered in this Offering this Offering
Lincoln Park Capital
Fund, LLC (1) 249,598 (2) 1.00% 6,754,609 (4) *
* Less than 1%
(1)
Josh Scheinfeld and Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC, are deemed to be beneficial owners of all of the shares of common stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and Scheinfeld have shared voting and investment power over the shares being offered under the prospectus filed with the SEC in connection with the transactions contemplated under the Purchase Agreement. Lincoln Park Capital, LLC is not a licensed broker dealer or an affiliate of a licensed broker dealer.
(2)
Represents 70,000 shares of Common Stock held by the Selling Security Holder prior to this offering, and 179,598 shares of our Common Stock issued to the Selling Security Holder on or about October 21, 2015 as a fee for its commitment to purchase additional shares of our common stock under the Purchase Agreement, all of which shares are covered by the registration statement that includes this prospectus.
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(3)
Based on 33,789,938 outstanding shares of our common stock as of October 21, 2015, with the above mentioned commitment shares deemed issued as of that date.
(4)
Although the Purchase Agreement provides that we may sell up to $50,000,000 of our Common Stock to Lincoln Park, we have initially reserved approximately 6,754,609 shares for sale to Lincoln Park under the Purchase Agreement and RRA. The amount of shares of Common Stock we may sell to Lincoln Park is subject to cap on issuable shares as described in the Purchase Agreement.
The Lincoln Park Transaction
General
On October 21, 2015, we entered into the Purchase Agreement and the Registration Rights Agreement with Lincoln Park. Pursuant to the terms of the Purchase Agreement, Lincoln Park has agreed to purchase from us up to $50,000,000 of our Common Stock (subject to certain limitations) from time to time over a 36-month period starting in October 2015. Pursuant to the terms of the Registration Rights Agreement, we have filed with the SEC the registration statement that includes this prospectus to register for resale under the Securities Act the shares that have been or may be issued to Lincoln Park under the Purchase Agreement.
After the SEC has declared effective the registration statement, we may, from time to time and at our sole discretion but no more frequently than every other business day, direct Lincoln Park to purchase 50,000 shares of our Common Stock on any such business day, which amounts may be increased under certain circumstances, provided that in no event shall Lincoln Park purchase more than $2,000,000 worth of our Common Stock on any single business day, plus an additional “accelerated amount” under certain circumstances, at a purchase price per share based on the market price of our common stock immediately preceding the time of sale as computed under the Purchase Agreement without any fixed discount. The amount of shares of our Common Stock that we direct Lincoln Park to purchase depends on the closing price of our Common Stock.
Purchase of Shares Under the Purchase Agreement
Under the Purchase Agreement, on any business day selected by us, we may direct Lincoln Park to purchase 50,000 shares of our Common Stock on any such business day. On any day that the closing sale price of our common stock is not below $7.00 the purchase amount may be increased, at our sole discretion, to up to75,000 shares of our common stock per purchase; on any day that the closing sale price of our common stock is not below $9.00 the purchase amount may be increased, at our sole discretion, to up to 100,000 shares of our common stock per purchase and on any day that the closing sale price of our common stock is not below $11.00 the purchase amount may be increased, at our sole discretion, to up to 125,000 shares of our common stock per purchase and on any day that the closing sale price of our common stock is not below $13.00 the purchase amount may be increased, at our sole discretion, to up to 150,000 shares of our common stock per purchase. Such purchases are hereinafter referred to as “Regular Purchases”. In no event shall Lincoln Park purchase more than $2,000,000 worth of our common stock pursuant to a Regular Purchase on any single business day. The purchase price per share for each such Regular Purchase will be equal to the lower of:
the lowest sale price for our common stock on the purchase date of such shares; or
the arithmetic average of the three lowest closing sale prices for our common stock during the 10 consecutive business days ending on the business day immediately preceding the purchase date of such shares.
In addition to Regular Purchases described above, we may also direct Lincoln Park, on any business day on which we have properly submitted a Regular Purchase notice, to purchase an additional amount of our Common Stock, which we refer to as an Accelerated Purchase, not to exceed the lesser of:
30% of the aggregate shares of our common stock traded during normal trading hours on the purchase date; and
200% of the number of purchase shares purchased pursuant to the corresponding Regular Purchase.
The purchase price per share for each such Accelerated Purchase will be equal to the lower of:
96% of the volume weighted average price during (i) the entire trading day on the purchase date, if the volume of shares of our common stock traded on the purchase date has not exceeded a volume maximum calculated in accordance with the Purchase Agreement, or (ii) the portion of the trading day of the purchase date (calculated starting at the beginning of normal trading hours) until such time at which the volume of shares of our common stock traded has exceeded such volume maximum; or
the closing sale price of our common stock on the purchase date.
In the case of both Regular Purchases and Accelerated Purchases, the purchase price per share will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the business days used to compute the purchase price.
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Other than as set forth above, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the timing and amount of any sales of our common stock to Lincoln Park.
Events of Default
Events of default under the Purchase Agreement include the following:
the effectiveness of the registration statement of which this prospectus forms a part lapses for any reason (including, without limitation, the issuance of a stop order), or any required prospectus supplement and accompanying prospectus are unavailable for the resale by Lincoln Park of our common stock offered hereby, and such lapse or unavailability continues for a period of 10 consecutive business days or for more than an aggregate of 30 business days in any 365-day period;
suspension by our principal market of our common stock from trading for a period of three consecutive business days;
the delisting of the Common Stock from the OTCQB operated by the OTC Markets Group, Inc., provided, however, that the Common Stock is not immediately thereafter trading on the New York Stock Exchange, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the NYSE MKT, the NYSE Arca, the OTC Bulletin Board or the OTCQX operated by the OTC Markets Group, Inc. (or nationally recognized successor to any of the foregoing). If at any time after the Commencement Date, the Exchange Cap is reached unless and until stockholder approval is obtained pursuant to Section 2(e) hereof. The Exchange Cap shall be deemed to be reached at such time if, upon submission of a Regular Purchase Notice or Accelerated Purchase Notice under this Agreement, the issuance of such shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue under this Agreement without breaching the Company’s obligations under the rules or regulations of the Principal Market;
the transfer agent’s failure for three business days to issue to Lincoln Park shares of our Common Stock which Lincoln Park is entitled to receive under the Purchase Agreement;
any breach of the representations or warranties or covenants contained in the Purchase Agreement or any related agreement which has or which could have a material adverse effect on us subject to a cure period of five business days;
any voluntary or involuntary participation or threatened participation in insolvency or bankruptcy proceedings by or against us; and
if at any time we are not eligible to transfer our common stock electronically or a material adverse change in our business, financial condition, operations or prospects has occurred.
Lincoln Park does not have the right to terminate the Purchase Agreement upon any of the events of default set forth above. During an event of default, all of which are outside of Lincoln Park’s control, shares of our common stock cannot be sold by us or purchased by Lincoln Park under the Purchase Agreement.
Our Termination Rights
We have the unconditional right, at any time, for any reason and without any payment or liability to us, to give notice to Lincoln Park to terminate the Purchase Agreement. In the event of bankruptcy proceedings by or against us, the Purchase Agreement will automatically terminate without action of any party.
No Short-Selling or Hedging by Lincoln Park
Lincoln Park has agreed that neither it nor any of its affiliates shall engage in any direct or indirect short-selling or hedging of our common stock during any time prior to the termination of the Purchase Agreement.
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Effect of Performance of the Purchase Agreement on Our Stockh\\\
Effect of Performance of the Purchase Agreement on Our Stockholders
All the shares of our Common Stock registered in this offering which may be sold by us to Lincoln Park under the Purchase Agreement are expected to be freely tradable. It is anticipated that shares registered in this offering will be sold over a period of up to 36 months commencing on the date that the registration statement including this prospectus becomes effective. The sale by Lincoln Park of a significant amount of shares registered in this offering at any given time could cause the market price of our common stock to decline and to be highly volatile. Lincoln Park may ultimately purchase all, some or none of the shares of common stock registered in this offering that Lincoln Park has not previously purchased. Lincoln Park may sell all, some or none of the shares it has purchased or will purchase under the Purchase Agreement. Therefore, sales to Lincoln Park by us under the Purchase Agreement may result in substantial dilution to the interests of other holders of our common stock. In addition, if we sell a substantial number of shares to Lincoln Park under the Purchase Agreement, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with Lincoln Park may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales. However, we have the right to control the timing and amount of any sales of our shares to Lincoln Park and the Purchase Agreement may be terminated by us at any time at our discretion without any cost to us.
Pursuant to the terms of the Purchase Agreement, we have the right, but not the obligation, to direct Lincoln Park to purchase up to $50,000,000 of our common stock, exclusive of the 179,958 shares issued to Lincoln Park as a commitment fee. Depending on the price per share at which we sell our common stock to Lincoln Park, we may be authorized to issue and sell to Lincoln Park under the Purchase Agreement more shares of our common stock than are offered under this prospectus. If we choose to do so, we must first register for resale under the Securities Act any such additional shares, which could cause additional substantial dilution to our stockholders. The number of shares ultimately offered for resale by Lincoln Park under this prospectus is dependent upon the number of shares we direct Lincoln Park to purchase under the Purchase Agreement.
The following table sets forth the amount of gross proceeds we would receive from Lincoln Park from our sale of shares to Lincoln Park under the Purchase Agreement registered in this offering at varying purchase prices:
Percentage of Proceeds from the Sale
Outstanding Shares of Shares to Lincoln
Assumed Average Number of Registered After Giving Effect to Park Under the
Purchase Price Shares to be Issued the Issuance to $50,000,000
Per Share if Full Purchase(1)(2) Lincoln Park (3) Purchase Agreement
$1.00 (4) 6,485,212 16.10% $6,485,212
$5.00 6,485,212 16.10% $32,426,060
$7.87 (5) 6,353,240 15.83% $49,999,999
$10.00 5,000,000 12.89% $50,000,000
$20.00 2,500,000 6.89% $50,000,000
____________________
(1)
Although the Purchase Agreement provides that we may sell up to $50,000,000 of our common stock to Lincoln Park, we are initially reserving 6,754,609 shares (inclusive of the 269,397 shares issued to Lincoln Park as a commitment fee), which may or may not cover all the shares we ultimately sell to Lincoln Park under the Purchase Agreement, depending on the purchase price per share. As a result, we have included in this column only those shares that we have initially reserved.
(2)
The number of registered shares to be issued excludes the 269,397 commitment shares because no proceeds will be attributable to such commitment shares.
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Thats just 10/25 gonna pull up others right now
