Trans-Lux Corp (TNLX)

[Enterprising Investor]

Unilumin North America Inc invests $1.5 million (11/08/18)

As previously disclosed in the public filings of Trans-Lux Corporation (the “Company”), the Company lacked adequate liquidity to operate its business over the next 12 months and the audit report in the Company’s audited Consolidated Financial Statements for the fiscal year ended December 31, 2017 contained a going concern qualification. Accordingly, on November 2, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with Unilumin North America Inc. (“Unilumin”), pursuant to which Unilumin purchased 1,315,789 shares of the Company’s Common Stock, par value $0.001 per share (“Common Stock”), for a purchase price of $1,500,000 (the “Purchase”), or a per share purchase price of $1.14. The SPA requires that the proceeds of the Purchase are to be utilized for mutually agreed purposes. In connection with the SPA, the Company issued warrants (the “Warrants”) to purchase 5,670,103 shares of the Company’s Common Stock to Unilumin at an exercise price of $0.97 per share. The exercise price of the Warrants is automatically adjusted to $0.75 per share if the Company is unable to complete a financing of $2,500,000 through a rights offering by June 1, 2019 (the “Rights Offering”). The exercise price of the Warrants will also be decreased to the same price as the exercise price of the rights issued in the Rights Offering if the exercise price of such rights is less than $1.00 per share.

The Warrants are exercisable until November 2, 2020, provided that they are mandatorily exercisable upon completion of the Rights Offering if in excess of 90% of the Company’s currently issued and outstanding Series B Convertible Preferred Stock (“Preferred Stock”) converts into Common Stock. In connection with any such Preferred Stock conversion, Unilumin acknowledged that the conversion price of the Preferred Stock may be decreased, subject to stockholder approval. In addition, Unilumin has the right to appoint to two Directors to the Company’s Board of Directors. Unilumin has designated Yang Liu and Nicholas Fazio and the Company will amend this Form 8-K to provide the information required under Item 5.02 (d) of Form 8-K.

If all or a significant portion of the Warrants are exercised, Unilumin would own in excess of fifty percent of the Company’s outstanding Common Stock on a fully diluted basis, even if the Rights Offering is completed.

The Shares and Warrants were issued and granted to Unilumin pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended.

https://www.sec.gov/Archives/edgar/data/99106/000151316218000282/form8k.htm