It is really a damn shame what Pascoe has done to you guys, really. One of you should file a lawsuit against the baztard and make sure he spends the rest of his life behind bars.
As we all know, the company can raise only $1.8 million through the shelf between now and September, and the next best money raising vehicle would be a private placement.
They are limited to $1.8 million through the shelf registration and it's the reason they filed the S1. With this S1, they are intending to raise $6.9 million.
In regards to the sale of shares from back in September. They were registered. The warrants were unregistered.
"On September 28, 2016, we completed a registered direct offering of 1,082,402 shares of our common stock at a purchase price of $3.45 per share with a group of investors. Concurrently in a private placement, for each share of common stock purchased by each investor, such investor received an unregistered warrant to purchase three quarters of a share of common stock, which we refer to as the September 2016 Warrants. The September 2016 Warrants have an exercise price of $4.50 per share, are exercisable six months from the initial issuance date, and will expire five and a half years from the initial issuance date. The aggregate gross proceeds from the sale of the common stock and warrants were approximately $3.7 million, and the net proceeds after deduction of commissions, fees and expenses were approximately $3.2 million. In connection with this transaction, we issued to the placement agent, warrants to purchase up to 54,123 shares of our common stock, sold in this offering, which we refer to as the Placement Agent Warrants. The Placement Agent Warrants have substantially the same terms as the September 2016 Warrants, except that the Placement Agent Warrants have an exercise price of $4.3125 per share and will expire five years from the initial issuance date. Rodman & Renshaw, a unit of H.C. Wainwright & Co., acted as our exclusive placement agent for the offering. "
And in regards to this S1 filing - the Prospectus contains the following:
"Stabilization, Short Positions and Penalty Bids
The underwriter may engage in syndicate covering transactions, stabilizing transactions and penalty bids or purchases for the purpose of pegging, fixing or maintaining the price of our common stock:
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Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. Such a naked short position would be closed out by buying securities in the open market. A naked short position is more likely to be created if the underwriter is concerned that there could be downward pressure on the price of the securities in the open market after pricing that could adversely affect investors who purchase in the offering.
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Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specific maximum.
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Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
These syndicate covering transactions, stabilizing transactions and penalty bids may have the effect of raising or maintaining the market prices of our securities or preventing or retarding a decline in the market prices of our securities. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. Neither we nor the underwriter make any representation or prediction as to the effect that the transactions described above may have on the price of our common stock. These transactions may be effected on The NASDAQ Capital Market, in the over-the-counter market or on any other trading market and, if commenced, may be discontinued at any time.
In connection with this offering, the underwriter also may engage in passive market making transactions in our common stock in accordance with Regulation M during a period before the commencement of offers or sales of shares of our common stock in this offering and extending through the completion of the distribution. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for that security. However, if all independent bids are lowered below the passive market maker’s bid that bid must then be lowered when specific purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
Neither we nor the underwriter make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of our securities. In addition, neither we nor the underwriter make any representation that the underwriter will engage in these transactions or that any transactions, once commenced, will not be discontinued without notice."
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