Item 1.01 Entry into a Material Definitive Agreement
On April 19, 2016, Capstone Turbine Corporation (the “
Company
”) entered into an underwriting agreement (the “
Underwriting Agreement
”) with Oppenheimer & Co. Inc., as sole book-running manager, and Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC, as co-manager (collectively, the “
Underwriters
”), to sell up to 2,700,000 shares of the Company’s common stock, $0.001 par value per share (“
Common Stock
”), and pre-funded Series B warrants to purchase up to 5,515,000 shares of Common Stock, which will be offered in lieu of Common Stock to those purchasers whose purchase of Common Stock in the offering otherwise would result in the purchaser beneficially owning more than 4.99% of the Company’s outstanding common stock following the completion of the offering (the “
Series B Warrants
”). Also included in the offering are Series A warrants to purchase 4,107,500 shares of Common Stock (the “
Series A Warrants
” and, together with the Series B Warrants, the “
Warrants
”).
Every two shares of Common Stock will be sold with a Series A Warrant to purchase one share of Common Stock at a collective price of $3.50. Every two Series B Warrants will be sold with a Series A Warrant to purchase one share of Common Stock at a collective price of $3.48. The shares of Common Stock or Series B Warrants, as applicable, and the Series A Warrants are immediately separable and will be issued separately, but will be purchased together.
Each Series A Warrant will have an initial exercise price of $2.55 per share of Common Stock, will be exercisable beginning six months after the issuance date and will expire five years after the first day it is exercisable. Each Series B Warrant will have a nominal exercise price of $0.01 per share of Common Stock and will be exercisable upon issuance.
The Underwriting Agreement contains customary representations, warranties, covenants and agreements by the Company, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
The net proceeds to the Company from the offering, after deducting the underwriting discount and commissions and other estimated offering expenses, are expected to be approximately $13.1 million. The Company intends to use the proceeds from the offering to fund general working capital requirements and for other general corporate purposes. The closing of the offering is expected to take place on or about April 22, 2016, subject to the satisfaction of customary closing conditions.
The Company is offering the above-described securities pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-203431) declared effective by the Securities and Exchange Commission on June 23, 2015, a related prospectus dated June 23, 2015 and a prospectus supplement dated April 19, 2016 (the “
Prospectus Supplement
”).
The foregoing descriptions of the Underwriting Agreement and the Warrants do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Underwriting Agreement filed as Exhibit 1 to this Current Report on Form 8-K and incorporated herein by reference and the full text of the forms of warrant filed as Exhibits 4.1 and 4.2 to this Current Report on Form 8-K, as applicable, and incorporated herein by reference. The legal opinion of Waller Lansden Dortch & Davis, LLP relating to the Common Stock and the Warrants to be sold in the offering is filed as Exhibit 5 to this Current Report on Form 8-K.