Hi,
On November 2, 2016, we entered into a securities purchase agreement (“Purchase Agreement”) with Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Master Fund, Ltd.
(collectively, “Selling Securityholders”).
Pursuant to the Purchase Agreement, the Selling Securityholders agreed to purchase, in a private placement (the “Private Placement”), 2,272,727 shares of our Common Stock, and Warrants. Each Warrant will be exercisable for one share of our Common Stock and will have the same terms as our existing publicly traded warrants that are currently listed on The NASDAQ Capital Market under the symbol “APDNW”, with an exercise price of $3.50 and an expiration date of November 20, 2019. The aggregate gross proceeds of the Private Placement were approximately $5.0 million before deducting the placement agents’ fee and other placement expenses. The price per share of Common Stock was $2.49 and the price per Warrant was $.01. The Private Placement closed on November 7, 2016 (the “Closing Date”).
Further, we agreed not to effect any issuance of Common Stock or securities convertible into Common Stock involving
a” Variable Rate Transaction,”
(produce enough shares at whatever
price to get Sabbys’ collateral back to $5 million)
while the Selling Securityholders hold any Warrants.
(Sabby can dispose of the warrants any way it chooses: Give them to
charity if they want to.)
In addition, pursuant to the Purchase Agreement, upon any Subsequent Financing, as defined in the Purchase Agreement, during the period ending on the nine (9) (August or Sptember) month anniversary of the Effective Date, the Selling Securityholders shall have the right to participate in up to an amount equal to 25% of the Subsequent Financing; provided that no Selling Securityholders shall have such participation right to the extent that after giving effect to such participation, such Selling Securityholders (together with such Selling Securityholders’s affiliates, and any persons acting as a group together with such Selling Securityholders or its affiliates) would beneficially own in excess of 9.99% of the Common Stock outstanding immediately after giving effect to the Subsequent Financing.
If Sabby triggers the variable rate option within the 9 month
period, the floodgates are open.
Adnas would issue at least 4X the number of shares necessary
to make Sabby whole, yet keep their ownership less than 10%.
They can then repeat the process as necessary, using the variable
rate option to destroy the share price and take control.
Sabby owns Adnas. Unless Adnas can put Sabby in the money,
they are done.
This is my lay understanding of the deal.
My hope is that Adnas has blockbuster news very soon.
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