UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CounterPath Corporation
(Exact name of registrant as specified in its charter)
|
Nevada
|
20-0004161
|
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.)
|
Suite 300, One Bentall Centre
505 Burrard Street
Vancouver, British Columbia V7X 1M3, Canada
(Address
of Principal Executive Offices)(Zip Code)
Amended 2010 Stock Option Plan
(Full title of
the plan)
Incorp Services, Inc.
3773 Howard Hughes Pkwy,
Suite 500S
Las Vegas, Nevada 89169-6014
(Name and address of
agent for service)
(702) 866-2500
(Telephone number, including
area code, of agent for service)
Copies of all communications to:
Clark Wilson LLP
Suite 900 - 885 West Georgia
Street
Vancouver, British Columbia V6C 3H1, Canada
Telephone: (604)
687-5700
Attention: Mr. Virgil Z. Hlus
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange
Act.
|
Large accelerated filer [ ]
|
|
Accelerated filer [ ]
|
|
Non-accelerated filer [ ]
|
(Do not check if a smaller reporting company)
|
Smaller reporting company [ x ]
|
CALCULATION OF REGISTRATION FEE
|
|
|
Proposed
|
Proposed
|
|
|
|
|
maximum
|
maximum
|
Amount of
|
|
Title of securities to
|
Amount to be
|
offering price
|
aggregate offering
|
registration
|
|
be
registered
|
registered
(1),(2)
|
per share
(3)
|
price
(3)
|
fee
|
|
Common Stock
|
200,000
|
$2.55
|
$510,000
|
$59.11
|
|
(1)
|
An indeterminate number of additional shares of common
stock shall be issuable pursuant to Rule 416 under the Securities Act of
1933 to prevent dilution resulting from stock splits, stock dividends or
similar transactions and in such an event the number of shares registered
shall automatically be increased to cover the additional shares in
accordance with Rule 416.
|
|
|
|
|
(2)
|
Consists of up to additional 200,000 shares of our common
stock issuable pursuant to our Amended 2010 Stock Option Plan. Our Amended
2010 Stock Option Plan provides for the grant of stock options to acquire
a maximum of 986,000 shares of our common stock, 506,000 (5,060,000 on a
pre-split basis) of which have been previously registered under a
registration statement on Form S-8 (Registration No. 333-125812) filed on
January 30, 2009, 180,000 (1,800,000 on a pre-split basis) of which have
been previously registered under a registration statement on Form S-8
(Registration No. 333-186956) filed on February 28, 2013, and 100,000
(1,000,000 on a pre-split basis) of which have been previously registered
under a registration statement on Form S-8 (Registration No. 333-200992)
filed on December 16, 2014.
|
|
|
|
|
(3)
|
Estimated in accordance with Rule 457 (h) under the
Securities Act of 1933 solely for the purpose of computing the amount of
the registration fee, and based on the average of the high and low prices
of our common stock as reported on the NASDAQ Capital Market on January
27, 2017.
|
EXPLANATORY NOTE
We prepared this registration statement in accordance with the
requirements of Form S-8 under the Securities Act of 1933, to register an
aggregate of an additional 200,000 shares of our common stock that are issuable
pursuant to our Amended 2010 Stock Option Plan. We have previously filed a
registration statement on Form S-8 (Registration No. 333-125812) to register an
aggregate of 506,000 (5,060,000 on a pre-split basis) shares of our common
stock, consisting of 80,000 (800,000 on a pre-split basis) shares of our common
stock that are issuable pursuant to our 2004 Stock Option Plan and 426,000
(4,260,000 on a pre-split basis) shares of our common stock that are issuable
pursuant to our Amended and Restated 2005 Stock Option Plan. In addition, we
have previously filed a registration statement on Form S-8 (Registration No.
333-186956) to register 180,000 (1,800,000 on a pre-split basis) shares of our
common stock that are issuable pursuant to our Amended 2010 Stock Option Plan
and a registration statement on Form S-8 (Registration No. 333-200992) to
register 100,000 (1,000,000 on a pre-split basis) shares of our common stock
that are issuable pursuant to our Amended 2010 Stock Option Plan.
The additional shares being registered in this registration
statement on Form S-8 are of the same class as securities covered by the
registration statement on Form S-8 (Registration No. 333-200992) filed on
December 16, 2014, the registration statement on Form S-8 (Registration No.
333-186956) filed on February 28, 2013 and the registration statement on Form
S-8 (Registration No. 333-125812) filed on January 30, 2009, the contents of
which are incorporated herein by reference in accordance with General
Instruction E to Form S-8, to the extent not otherwise amended or superseded by
the content of this registration statement.
On October 22, 2009, our stockholders approved an increase in
the number of shares issuable under our Amended and Restated 2005 Stock Option
Plan by 80,000 (800,000 on a pre-split basis). On September 27, 2010, our
stockholders approved the consolidation of our 2004 Stock Option Plan and our
Amended and Restated 2005 Stock Option Plan into one plan referred to as the
2010 Stock Option Plan for our employees, directors, officers and consultants of
our company and our subsidiaries. On September 27, 2011, our stockholders
approved an increase in the number of shares issuable under the 2010 Stock
Option Plan by 100,000 (1,000,000 on a pre-split basis). Upon the increase in
the number of shares issuable under the 2010 Stock Option Plan, our stock option
plan was renamed “Amended 2010 Stock Option Plan”. On September 9, 2014, our
stockholders approved an increase in the number of shares issuable under the
Amended 2010 Stock Option Plan by 100,000 (1,000,000 on a pre-split basis).
ii
Effective November 2, 2015, our company effected a one-for-ten
reverse stock split of the shares of our common stock with each resulting
fractional share being round up to the next whole share. On September 12, 2016,
our stockholders approved an increase in the number of shares issuable under the
Amended 2010 Stock Option Plan by 200,000.
In addition, we have previously filed a registration statement
on Form S-8 (Registration No. 333-157036) to register an aggregate of 150,000
(1,500,000 on a pre-split basis) shares of our common stock that are issuable
pursuant to our Employee Share Purchase Plan. Effective as of October 22, 2009,
our Employee Share Purchase Plan was amended to decrease the number of shares of
common stock issuable under the plan by 80,000 (800,000 on a pre-split basis)
shares to 70,000 (700,000 on a pre-split basis) shares. Effective as of
September 10, 2015, our Employee Share Purchase Plan was amended to increase the
number of shares of common stock issuable under the plan by 50,000 (500,000 on a
pre-split basis) shares to 120,000 (1,200,000 on a pre-split basis) shares.
Pursuant to Rule 429 promulgated under the Securities Act of
1933, a prospectus relating to this registration statement is a combined
prospectus relating also to the registration statement on Form S-8 (Registration
No. 333-125812) filed on January 30, 2009, the registration statement on Form
S-8 (Registration No. 333-157036) filed on January 30, 2009, the registration
statement on Form S-8 (Registration No. 333-186956) filed on February 28, 2013,
and the registration statement on Form S-8 (Registration No. 333-200992) filed
on December 16, 2014. In addition, this registration statement, which is a new
registration statement, also constitutes a post-effective amendment to the
registration statement on Form S-8 (Registration No. 333-125812) filed on
January 30, 2009, the registration statement on Form S-8 (Registration No.
333-157036) filed on January 30, 2009, the registration statement on Form S-8
(Registration No. 333-186956) filed on February 28, 2013, and the registration
statement on Form S-8 (Registration No. 333-200992) filed on December 16, 2014.
The combined Section 10(a) prospectus for our Amended 2010
Stock Option Plan updates, among other things, certain information regarding our
stock option plan, including the increase in the number of shares issuable under
our stock option plan and the one-for-ten reverse stock split of the shares of
our common stock. The combined Section 10(a) prospectus for our Employee Share
Purchase Plan updates, among other things, certain information regarding our
Employee Share Purchase Plan, including the increase in the number of shares
issuable under our Employee Share Purchase Plan and the one-for-ten reverse
stock split of the shares of our common stock.
Under cover of this registration statement on Form S-8 is a
combined reoffer prospectus prepared in accordance with Part I of Form S-3 under
the Securities Act of 1933 (in accordance with Section C of the General
Instructions to Form S-8). The reoffer prospectus may be used for reoffers and
resales of up to an aggregate of 235,524 “restricted securities” and/or “control
securities” (as such term is defined in Form S-8) issued or issuable upon
exercise of the stock options granted pursuant to our Amended 2010 Stock Option
Plan or pursuant to our Employee Share Purchase Plan on a continuous or delayed
basis in the future. The combined reoffer prospectus updates, among other
things, certain information regarding the ownership of our common stock by the
selling stockholders and the number of shares of our common stock available for
resale by each selling shareholder.
iii
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual
Information.*
* The document(s) containing the information specified in Part
I of Form S-8 will be sent or given to participants of our Amended 2010 Stock
Option Plan or Employee Share Purchase Plan as specified by Rule 428(b)(1) under
the Securities Act of 1933. Such documents are not being filed with the
Securities and Exchange Commission, but constitute, along with the documents
incorporated by reference into this registration statement, a prospectus that
meets the requirements of Section 10(a) of the Securities Act of 1933.
iv
Reoffer Prospectus
235,524 Shares
COUNTERPATH CORPORATION
Common Stock
_________________________________
The selling stockholders identified in this reoffer prospectus
may offer and sell up to 235,524 shares of our common stock issued or issuable
upon exercise of stock options granted pursuant to our Amended 2010 Stock Option
Plan or shares of our common stock issued pursuant to our Employee Share
Purchase Plan.
The selling stockholders may sell all or a portion of the
shares being offered pursuant to this reoffer prospectus at fixed prices, at
prevailing market prices at the time of sale, at varying prices or at negotiated
prices.
The selling stockholders and any brokers executing selling
orders on their behalf may be deemed to be “underwriters” within the meaning of
the Securities Act of 1933, in which event commissions received by such brokers
may be deemed to be underwriting commissions under the Securities Act of 1933.
We will not receive any proceeds from the sale of the shares of
our common stock by the selling stockholders. We may, however, receive proceeds
upon exercise of the stock options by the selling stockholders. We will pay for
expenses of this offering, except that the selling stockholders will pay any
broker discounts or commissions or equivalent expenses and expenses of their
legal counsels applicable to the sale of their shares.
Our common stock is listed for trading on the NASDAQ Capital
Market under the symbol “CPAH” and on the Toronto Stock Exchange under the
symbol “PATH”. On January 31, 2017, the last reported sales prices of our common
stock on the NASDAQ Capital Market and the Toronto Stock Exchange were $2.50
per share and CDN$3.10 per share, respectively.
_________________________________
Investing in our common stock involves risks. See “Risk
Factors” beginning on page 3.
_________________________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
_________________________________
The date of this reoffer prospectus is January 31, 2017.
1
Table of Contents
2
As used in this reoffer prospectus, the terms “we”, “us”,
“our”, and “CounterPath” refer to CounterPath Corporation, unless otherwise
indicated. All dollar amounts refer to U.S. dollars unless otherwise indicated.
Prospectus Summary
Our Business
We design, develop and sell software and services that enable
enterprises and telecommunication service providers to deliver Unified
Communications (UC) services, including voice, video, messaging and
collaboration functionality, over their Internet Protocol, or IP, based
networks. We are capitalizing upon numerous industry trends, including the rapid
adoption of mobile technology, the proliferation of bring-your-own-device to
work programs, the need for secure business communications, the need for
centralized provisioning, the migration towards cloud-based services and the
migration towards all IP networks. We are also capitalizing on a trend where
communication services such as Skype and WhatsApp are becoming more available
over-the-top (OTT) of the incumbent operators’ networks or enterprise networks
(a.k.a. Internet OTT providers). We offer our solutions under perpetual license
agreements that generate one-time license revenue and under subscription license
agreements that generate recurring license revenue. We sell our solutions
through our own online store, through third-party online stores, directly using
our in-house sales team and through channel partners. Our channel partners
include original equipment manufacturers, value added distributers and value
added resellers. Enterprises typically leverage our Enterprise OTT solutions to
increase employee productivity and to reduce certain costs. Telecommunication
service providers typically deploy our Operator OTT solutions as part of a broad
strategy to defend their subscriber base from competitive threats by offering
innovative new services. Our original equipment manufacturers and value added
resellers typically integrate our solutions into their products and then sell a
bundled solution to their end customers, which include both telecommunication
service providers and enterprises.
Our principal executive offices are located at Suite 300, One
Bentall Centre, 505 Burrard Street, Vancouver, British Columbia V7X 1M3, Canada.
Our telephone number is (604) 320-3344.
The Offering
The selling stockholders identified in this reoffer prospectus
may offer and sell up to 235,524 shares of our common stock issued or issuable
upon exercise of stock options granted pursuant to our Amended 2010 Stock Option
Plan or issued pursuant to our Employee Share Purchase Plan.
The selling stockholders may sell all or a portion of the
shares being offered pursuant to this reoffer prospectus at fixed prices, at
prevailing market prices at the time of sale, at varying prices or at negotiated
prices.
Number of Shares Outstanding
There were 5,006,545 shares of our common stock issued and
outstanding as at January 31, 2017.
Use of Proceeds
We will not receive any proceeds from the sale of any shares of
our common stock by the selling stockholders. We may, however, receive proceeds
upon exercise of the stock options by the selling stockholders. If we receive
proceeds upon exercise of these stock options, we intend to use these proceeds
for working capital and general corporate purposes.
Risk Factors
An investment in our common stock involves a high degree of
risk. The risks described below include material risks to our company or to
investors purchasing shares of our common stock that are known to our company.
If any of the following risks actually occur, our business, financial condition
and results of operations could be materially harmed. As a result, the trading
price of our common stock could decline and you might lose all or part of your
investment. When determining whether to buy our common stock, you should also
refer to the other information contained in or incorporated by reference in this
reoffer prospectus.
3
Risks Associated with Our Business and Industry
Lack of cash flow which may affect our ability to
continue as a going concern.
Presently, our operating cash flows are not sufficient to meet
operating and capital expenses. Our business plan calls for continued research
and development of our products and expansion of our market share. We will
require additional financing to fund working capital and pay for operating
expenses and capital requirements until we achieve a positive cash flow.
However, our management projects that under our current operating plan that
sufficient cash is available to meet our ongoing operating expenses and working
capital requirements through January 31, 2018.
However, there is no assurance that actual cash requirements
will not exceed our estimates. In particular, additional capital may be required
in the event that:
-
we incur delays and additional expenses as a result of technology failure;
-
we are unable to create a substantial market for our products; or
-
we incur any significant unanticipated expenses.
The occurrence of any of the aforementioned events could
adversely affect our ability to meet our proposed business plans.
We depend on a mix of revenues and outside capital to pay for
the continued development of our technology and the marketing of our products.
Such outside capital may include the sale of additional stock and/or commercial
borrowing. There can be no assurance that capital will continue to be available
if necessary to meet these continuing development costs or, if the capital is
available, that it will be on terms acceptable to us. Disruptions in financial
markets and challenging economic conditions have and may continue to affect our
ability to raise capital. The issuance of additional equity securities by us
would result in a dilution, possibly a significant dilution, in the equity
interests of our current stockholders. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash
commitments.
Our revenue, operating results and gross margin can
fluctuate significantly and unpredictably from quarter-to-quarter and from
year-to-year, and we expect that they will continue to do so, which could have a
material adverse effect on our operating results.
The rate at which our customers order our products, and the
size of these orders, are highly variable and difficult to predict. In the past,
we have experienced significant variability in our customer purchasing practices
on a quarterly and annual basis, and we expect that this variability will
continue, as a result of a number of factors, many of which are beyond our
control, including:
-
demand for our products and the timing and size of customer orders;
-
length of sales cycles, which may be extended by selling our products
through channel partners;
-
length of time of deployment of our products by our customers;
-
customers’ budgetary constraints;
-
competitive pressures; and
-
general economic conditions.
As a result of this volatility in our customers’ purchasing
practices, our revenue has historically fluctuated unpredictably on a quarterly
and annual basis and we expect this to continue for the foreseeable future. Our
budgeted expense levels depend in part on our expectations of future revenue.
Because any substantial adjustment to expenses to account for lower levels of
revenue is difficult and takes time, if our revenue declines, our operating
expenses and general overhead would likely be high relative to revenue, which
could have a material adverse effect on our operating margin and operating
results.
4
We may be unable to predict subscription renewal rates
and the impact these rates may have on our future revenue and operating results.
Some of our products and services are sold on a subscription
basis that are generally month-to-month or one year in length. Our customers
have no obligation to renew their subscriptions for our services after the
expiration of their initial subscription period, and some customers elect not to
renew. We cannot provide assurance that our subscriptions will be renewed at the
same or higher level of service, for the same number of licenses or for the same
duration of time, if at all. We cannot provide assurance that we will be able to
accurately predict future customer renewal rates. Our customers’ renewal rates
may decline or fluctuate as a result of a number of factors, including their
level of satisfaction with our services, our ability to continue to regularly
add features and functionality, the reliability (including uptime) of our
subscription services, the prices of our services, the prices of services
offered by our competitors, mergers and acquisitions affecting our customer
base, reductions in our customers’ spending levels or declines in customer
activity as a result of economic downturns or uncertainty in financial markets.
If our customers do not renew their subscriptions for our services or if they
renew on terms less favorable to us, our revenue may decline.
If we are not able to manage our operating expenses, then
our financial condition may be adversely affected.
For the six months ended October 31, 2016, our operating
expenses of $7,086,327 exceeded revenue of $5,777,107. For the year ended April
30, 2016, operating expenses $13,923,167 exceeded revenue of $11,081,358. Our
ability to reach and maintain profitability is conditional upon our ability to
manage our operating expenses. There is a risk that we will have to increase our
operating expenses in the future. Factors that could cause our operating
expenses to increase include our determination to spend more on sales and
marketing in order to increase product sales or our determination that more
research and development expenditures are required in order to keep our current
software products competitive or in order to develop new products for the
market. To the extent that our operating expenses increase without a
corresponding increase in revenue, our financial condition would be adversely
impacted.
We face larger and better-financed competitors, which may
affect our ability to achieve or maintain profitability.
Management is aware of similar products which compete directly
with our products and some of the companies developing these similar products
are larger and better-financed than us and may develop products superior to
those of our company. In addition to price competition, increased competition
may result in other aggressive business tactics from our competitors, such as:
-
emphasizing their own size and perceived stability against our smaller size
and narrower recognition;
-
providing customers “one-stop shopping” options for the purchase of network
equipment and application software;
-
offering customers financing assistance;
-
making early announcements of competing products and employing extensive
marketing efforts; and
-
asserting infringement of their intellectual property rights.
Such competition may potentially adversely affect our
profitability.
A decline in the price of our common stock could affect
our ability to raise further working capital and adversely impact our
operations.
A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital, or a delisting from a stock exchange on which our
common stock trades. Because our operations have been partially financed through
the sale of equity securities, a decline in the price of our common stock could
be especially detrimental to our liquidity and our continued operations. Any
reduction in our ability to raise equity capital in the future would force us to
reallocate funds from other planned uses and would have a significant negative
effect on our business plans and operations, including our ability to develop
new products and continue our current operations. If our stock price declines,
there can be no assurance that we can raise additional capital or generate funds
from operations sufficient to meet our obligations.
5
On December 16, 2014, we received notice from NASDAQ that the
closing bid price of our shares for the last 30 consecutive business days no
longer met the minimum bid price requirement of $1.00 per share. Effective
November 2, 2015, our company effected a one-for-ten reverse stock split of the
shares of our common stock. On November 16, 2015, we received notice from NASDAQ
that the closing bid price of our common stock has been $1.00 or greater for the
previous 30 consecutive business day’s and that we had regained compliance with
listing rule 5550(a)(2). There can be no assurance that the closing bid price of
our common stock will not fall below the minimum bid price requirement of $1.00
per share.
The majority of our directors and officers are located
outside the United States, with the result that it may be difficult for
investors to enforce within the United States any judgments obtained against us
or some of our directors or officers.
The majority of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons' assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against us or our officers or directors, including
judgments predicated upon the civil liability provisions of the securities laws
of the United States or any state thereof. Consequently, investors may be
effectively prevented from pursuing remedies under United States federal
securities laws against some of our directors or officers.
We may in the future be subject to damaging and
disruptive intellectual property litigation that could materially and adversely
affect our business, results of operations and financial condition, as well as
the continued viability of our company.
We may be unaware of filed patent applications and issued
patents that could relate to our products and services. Intellectual property
litigation, if determined against us, could:
-
result in the loss of a substantial number of existing customers or
prohibit the acquisition of new customers;
-
cause us to lose access to key distribution channels;
-
result in substantial employee layoffs or risk the permanent loss of
highly-valued employees;
-
materially and adversely affect our brand in the market place and cause a
substantial loss of goodwill;
-
affect our ability to raise additional capital;
-
cause our stock price to decline significantly; and
-
lead to the bankruptcy or liquidation of our company.
Parties making claims of infringement may be able to obtain
injunctive or other equitable relief that could effectively block our ability to
provide our products or services and could cause us to pay substantial
royalties, licensing fees or damages. The defense of any lawsuit could result in
time-consuming and expensive litigation, regardless of the merits of such
claims.
We could lose our competitive advantages if we are not
able to protect any proprietary technology and intellectual property rights
against infringement, and any related litigation could be time-consuming and
costly.
Our success and ability to compete depends to a significant
degree on our proprietary technology incorporated in our software. If any of our
competitors' copy or otherwise gain access to our proprietary technology or
develops similar technologies independently, we would not be able to compete as
effectively. We also consider our family of registered and unregistered
trademarks including CounterPath, Bria, eyebeam, X-Lite, and Softphone.com
invaluable to our ability to continue to develop and maintain the goodwill and
recognition associated with our brand. The measures we take to protect the
proprietary technology software, and other intellectual property rights, which
presently are based upon a combination of patents, patents pending, copyright,
trade secret and trademark laws, may not be adequate to prevent their
unauthorized use. Further, the laws of foreign countries may provide inadequate
protection of such intellectual property rights.
6
We may need to bring legal claims to enforce or protect such
intellectual property rights. Any litigation, whether successful or
unsuccessful, could result in substantial costs and divert resources from
intended uses. In addition, notwithstanding any rights we have secured in our
intellectual property, other persons may bring claims against us that we have
infringed on their intellectual property rights, including claims based upon the
content we license from third parties or claims that our intellectual property
right interests are not valid. Any claims against us, with or without merit,
could be time consuming and costly to defend or litigate, divert our attention
and resources, result in the loss of goodwill associated with our service marks
or require us to make changes to our website or other of our technologies.
Our products may become obsolete and unmarketable if we
are unable to respond adequately to rapidly changing technology and customer
demands.
Our industry is characterized by rapid changes in technology
and customer demands. As a result, our products may quickly become obsolete and
unmarketable. Our future success will depend on our ability to adapt to
technological advances, anticipate customer demands, develop new products and
enhance our current products on a timely and cost-effective basis. Further, our
products must remain competitive with those of other companies with
substantially greater resources. We may experience technical or other
difficulties that could delay or prevent the development, introduction or
marketing of new products or enhanced versions of existing products. Also, we
may not be able to adapt new or enhanced services to emerging industry
standards, and our new products may not be favorably received.
Unless we can establish broad market acceptance of our
current products, our potential revenues may be significantly reduced.
We expect that a substantial portion of our future revenue will
be derived from the sale of our software products. We expect that these product
offerings and their extensions and derivatives will account for a majority of
our revenue for the foreseeable future. Broad market acceptance of our software
products is, therefore, critical to our future success and our ability to
continue to generate revenues. Failure to achieve broad market acceptance of our
software products as a result of competition, technological change, or
otherwise, would significantly harm our business. Our future financial
performance will depend primarily on the continued market acceptance of our
current software product offerings and on the development, introduction and
market acceptance of any future enhancements. There can be no assurance that we
will be successful in marketing our current product offerings or any new product
offerings, applications or enhancements, and any failure to do so would
significantly harm our business.
Our use of open source software could impose limitations
on our ability to commercialize our products.
We incorporate open source software into our products. Although
we closely monitor our use of open source software, the terms of many open
source software licenses have not been interpreted by U.S. courts, and there is
a risk that such licenses could be construed in a manner that could impose
unanticipated conditions or restrictions on our ability to sell our products. In
such event, we could be required to make our proprietary software generally
available to third parties, including competitors, at no cost, to seek licenses
from third parties to continue offering our products, to re-engineer our
products or to discontinue the sale of our products in the event re-engineering
cannot be accomplished on a timely basis or at all, any of which could adversely
affect our revenues and operating expenses.
We may not be able to obtain necessary licenses of
third-party technology on acceptable terms, or at all, which could delay product
sales and development and adversely impact product quality.
We have incorporated third-party licensed technology into our
current products. We anticipate that we are also likely to need to license
additional technology from third-parties to develop new products or product
enhancements in the future. Third-party licenses may not be available or
continue to be available to us on commercially reasonable terms. The inability
to retain any third-party licenses required in our current products or to obtain
any new third-party licenses to develop new products and product enhancements
could require us to obtain substitute technology of lower quality or performance
standards or at greater cost, and delay or prevent us from making these products
or enhancements, any of which could seriously harm the competitive position of
our products.
7
Our products must interoperate with many different
networks, software applications and hardware products, and this interoperability
will depend on the continued prevalence of open standards.
Our products are designed to interoperate with our customers’
existing and planned networks, which have varied and complex specifications,
utilize multiple protocol standards, software applications and products from
numerous vendors and contain multiple products that have been added over time.
As a result, we must attempt to ensure that our products interoperate
effectively with these existing and planned networks. To meet these
requirements, we have and must continue to undertake development and testing
efforts that require significant capital and employee resources. We may not
accomplish these development efforts quickly or cost-effectively, or at all. If
our products do not interoperate effectively, installations could be delayed or
orders for our products could be cancelled, which would harm our revenue, gross
margins and our reputation, potentially resulting in the loss of existing and
potential customers. The failure of our products to interoperate effectively
with our customers’ networks may result in significant warranty, support and
repair costs, divert the attention of our engineering personnel from our
software development efforts and cause significant customer relations problems.
Additionally, the interoperability of our products with
multiple different networks is significantly dependent on the continued
prevalence of standards for IP multimedia services, such as SIP or Session
Initiation Protocol. Some of our existing and potential competitors are network
equipment providers who could potentially benefit from the deployment of their
own proprietary non-standards-based architectures. If resistance to open
standards by network equipment providers becomes prevalent, it could make it
more difficult for our products to interoperate with our customers’ networks,
which would have a material adverse effect on our ability to sell our products
to service providers.
We are subject to the credit risk of our customers, which
could have a material adverse effect on our financial condition, results of
operations and liquidity.
We are subject to the credit risk of our customers. Businesses
that are good credit risks at the time of sale may become bad credit risks over
time. In times of economic recession, the number of our customers who default on
payments owed to us tends to increase. If we fail to adequately assess and
monitor our credit risks, we could experience longer payment cycles, increased
collection costs and higher bad debt expense.
We are exposed to fluctuations in interest rates and
exchange rates associated with foreign currencies.
A majority of our revenue activities are transacted in U.S.
dollars. However, we are exposed to foreign currency exchange rate risk inherent
in conducting business globally in numerous currencies, of which the most
significant to our operations for the year ended April 30, 2016 and the six
months ended October 31, 2016 was the Canadian dollar. We are primarily exposed
to a fluctuating Canadian dollar as our operating expenses are primarily
denominated in Canadian dollars while our revenues are primarily denominated in
U.S. dollars. We address certain financial exposures through a controlled
program of risk management that includes the use of derivative financial
instruments. Our company’s foreign currency risk management program includes
foreign currency derivatives with cash flow hedge accounting designation that
utilizes foreign currency forward contracts to hedge exposures to the
variability in the U.S. dollar equivalent of anticipated non-U.S.
dollar-denominated cash flows. These instruments generally have a maturity of
less than one year. For these derivatives, our company reports the after-tax
gain or loss from the effective portion of the hedge as a component of
accumulated other comprehensive income (loss) in stockholders’ equity and
reclassifies it into earnings in the same period in which the hedged transaction
affects earnings, and within the same line item on the consolidated statements
of operations as the impact of the hedged transaction. There can be no assurance
that our hedging program will not result in a negative impact on our earnings
and earnings per share. We did not enter into any forward contracts for hedging
purposes during the years ended April 30, 2016 and 2015 and six months ended
October 31, 2016.
Risks Associated with Our Common Stock
Our directors control a substantial number of shares of
our common stock, decreasing your influence on stockholder
decisions.
Based on the 4,553,548 shares of common stock that were issued
and outstanding as of October 31, 2016, our directors owned approximately 30% of
our outstanding common stock. As a result, our directors as a group could have a
significant influence in delaying, deferring or preventing any potential change
in control of our company; they will be able to strongly influence the actions
of our board of directors even if they were to cease being directors of our
company and can effectively control the outcome of actions brought to our stockholders for
approval. Such a high level of ownership may adversely affect the exercise of
your voting and other stockholder rights.
8
We do not expect to pay dividends in the foreseeable
future.
We do not intend to declare dividends for the foreseeable
future, as we anticipate that we will reinvest any future earnings in the
development and growth of our business. Therefore, investors will not receive
any funds unless they sell their common stock, and stockholders may be unable to
sell their shares on favorable terms. We cannot assure you of a positive return
on investment or that you will not lose the entire amount of your investment in
our common stock.
The exercise of all or any number of outstanding warrants
or stock options or the issuance of other stock-based awards or any issuance of
shares to raise funds may dilute your holding of shares of our common stock.
If the holders of outstanding stock options, warrants and
deferred share units exercise or convert all of their vested stock options,
warrants and deferred share units as at October 31, 2016, then we would be
required to issue an additional 688,969 shares of our common stock, which would
represent approximately 15% of our issued and outstanding common stock after
such issuances. The exercise of any or all outstanding stock options that are
exercisable below market price will result in dilution to the interests of other
holders of our common stock.
We may in the future grant to certain or all of our directors,
officers, insiders and key employees stock options to purchase the shares of our
common stock, bonus shares and other stock based compensation as non-cash
incentives to such persons. Subject to applicable stock exchange rules, if any,
we may grant these stock options and other stock based compensation at exercise
prices equal to or less than market prices, and we may grant them when the
market for our securities is depressed. The issuance of any additional shares of
common stock or securities convertible into common stock will cause our existing
shareholders to experience dilution of their holding of our common stock.
In addition, shareholders could suffer dilution in their net
book value per share depending on the price at which such securities are sold.
Such issuance may cause a reduction in the proportionate ownership and voting
power of all other shareholders. The dilution may result in a decline in the
price of our shares of common stock or a change in the control of our company.
We may be considered a “penny stock.” Penny stock rules
will limit the ability of our stockholders to sell their shares of common stock.
The SEC has adopted regulations which generally define “penny
stock” to be any equity security that has a market price (as defined) less than
$5.00 per share or an exercise price of less than $5.00 per share, subject to
certain exceptions. In addition, since our common stock commenced trading on the
NASDAQ Capital Market below the $4.00 minimum bid price per share requirement,
our common stock would be considered a penny stock if we fail to satisfy the net
tangible assets and revenue tests in Rule 3a51-1 under the Securities Exchange
Act of 1934. Our securities may be covered by the penny stock rules, which
impose additional sales practice requirements on broker-dealers who sell to
persons other than established customers and “accredited investors”. The term
“accredited investor” refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customer's
confirmation.
In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.
9
The Financial Industry Regulatory Authority, or FINRA,
has adopted sales practice requirements, which may limit a stockholder's ability
to buy and/or sell shares of our common stock.
The FINRA has adopted rules that require that in recommending
an investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to
recommending speculative low priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information
about the customer's financial status, tax status, investment objectives and
other information. Under interpretations of these rules, FINRA believes that
there is a high probability that speculative low priced securities will not be
suitable for at least some customers. The FINRA requirements make it more
difficult for broker-dealers to recommend that their customers buy our common
stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for its shares.
Securities analysts may not publish favorable research or
reports about our business or may publish no information which could cause our
stock price or trading volume to decline.
The trading market for our common stock will be influenced by
the research and reports that industry or financial analysts publish about us
and our business. We do not control these analyst reports. As a relatively small
public company, we may be slow to attract research coverage and the analysts who
publish information about our common stock will have had relatively little
experience with our company, which could affect their ability to accurately
forecast our results and make it more likely that we fail to meet their
estimates. If any of the analysts who cover us issue an adverse opinion
regarding our stock price, our stock price may decline. If one or more of these
analysts cease coverage of our company or fail to regularly publish reports
covering us, we could lose visibility in the market, which in turn could cause
our stock price or trading volume to decline.
Forward-Looking Statements
This reoffer prospectus and the information and documents
incorporated by reference into this reoffer prospectus contain or will contain
forward-looking statements which relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as “may”, “should”, “expects”, “plans”, “anticipates”,
“believes”, “estimates”, “predicts”, “potential” or “continue” or the negative
of these terms or other comparable terminology. Forward-looking statements are
based on material factors and assumptions made by our company in light of
management’s experience and perception of historical trends, current conditions
and expected future developments, as well as other factors that we believe are
appropriate in the circumstances, including but not limited to, general economic
conditions, product pricing levels and competitive intensity, supply
constraints, the timing and success of new product introductions, our
expectations regarding our business, strategy, opportunities and prospects,
including our ability to implement meaningful changes to address business
challenges, and our expectations regarding the cash flow from operations. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
“Risk Factors” beginning on page 3 of this reoffer prospectus, that may cause
our company’s or our industry’s actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.
While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. We caution you not to
place undue reliance on any such forward-looking statements, which speak only as
of the date made. Except as required by applicable law, including the securities
laws of the United States and Canada, we disclaim any obligation subsequently to
revise any forward-looking statements to reflect events or circumstances after
the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
The Offering
The selling stockholders identified in this reoffer prospectus
may offer and sell up to 235,524 shares of our common stock issued or issuable
upon exercise of stock options granted pursuant to our Amended 2010 Stock Option
Plan or issued pursuant to our Employee Share Purchase Agreement.
10
Use of Proceeds
We will not receive any proceeds from the sale of the shares of
our common stock by the selling stockholders. We may, however, receive proceeds
upon exercise of the stock options granted to the selling stockholders. If we
receive proceeds upon exercise of stock options, we intend to use these proceeds
for working capital and general corporate purposes.
Determination of Offering Price
The selling stockholders may sell all or a portion of the
shares being offered pursuant to this reoffer prospectus at fixed prices, at
prevailing market prices at the time of sale, at varying prices or at negotiated
prices.
Selling Stockholders
The selling stockholders may offer and sell, from time to time,
any or all of shares of our common stock issued or issuable upon exercise of the
stock options granted pursuant to our Amended 2010 Stock Option Plan or issued
pursuant to our Employee Share Purchase Plan.
The following table identifies the selling stockholders and
indicates (i) the nature of any material relationship that such selling
stockholder has had with us for the past three years, (ii) the number of shares
held by the selling stockholders, (iii) the amount to be offered for each of the
selling stockholder’s account, and (iv) the number of shares and percentage of
outstanding shares of the common shares in our capital to be owned by each
selling stockholder after the sale of the shares offered by them pursuant to
this offering. The selling stockholders are not obligated to sell the shares
offered in this reoffer prospectus and may choose not to sell any of the shares
or only a part of the shares that they receive.
The information provided in the following table with respect to
the selling stockholders has been obtained from each of the selling
stockholders. Because the selling stockholders may offer and sell all or only
some portion of the shares of our common stock being offered pursuant to this
reoffer prospectus, the numbers in the table below representing the amount and
percentage of these shares of our common stock that will be held by the selling
stockholders upon termination of the offering are only estimates based on the
assumption that each selling stockholder will sell all of his or her shares of
our common stock being offered in the offering. In addition, the selling
stockholders may have sold, transferred or otherwise disposed of, or may sell,
transfer or otherwise dispose of, at any time or from time to time since the
date on which he or she provided the information regarding the shares of common
stock beneficially owned by them, all or some portion of the shares of common
stock beneficially owned by them in transactions exempt from the registration
requirements of the Securities Act of 1933.
None of the selling stockholders is a broker-dealer or an
affiliate of a broker-dealer. We may require the selling stockholders to suspend
the sales of the shares of our common stock being offered pursuant to this
reoffer prospectus upon the occurrence of any event that makes any statement in
this reoffer prospectus or the related registration statement untrue in any
material respect or that requires the changing of statements in those documents
in order to make statements in those documents not misleading.
Name of
Selling Stockholder
|
Shares Owned
by the
Selling
Stockholder
before
the
Offering
(1)
|
Total Shares
Offered
in the
Offering
|
Number of Shares
to Be Owned
by Selling Stockholder and Percent
of
Total Issued and Outstanding
Shares After the Offering
(1)
|
# of
Shares
(2)
|
% of
Class
(2),(3)
|
|
Donovan Jones
(4)
|
208,678
(5)
|
128,569
(6)
|
120,939
|
2.4%
|
|
David Karp
(7)
|
71,643
(8)
|
59,368
(9)
|
32,686
|
*
|
|
Todd Carothers
(10)
|
43,299
(11)
|
47,587
(12)
|
3,824
|
*
|
|
Totals
|
323,620
|
235,524
|
157,449
|
3.1%
|
11
Notes
|
|
(1)
|
Beneficial ownership is determined in accordance with
Securities and Exchange Commission rules and generally includes voting or
investment power with respect to shares of common stock. Shares of common
stock subject to options, warrants and convertible preferred stock
currently exercisable or convertible, or exercisable or convertible within
60 days, are counted as outstanding for computing the percentage of the
person holding such options, warrants or convertible preferred stock but
are not counted as outstanding for computing the percentage of any other
person. We believe that the selling stockholders have sole voting and
investment powers over their shares.
|
|
|
|
|
|
|
(2)
|
We have assumed that the selling stockholders will sell
all of the shares being offered in this offering.
|
|
|
|
|
|
|
(3)
|
Based on 5,006,545 shares of our common stock issued and
outstanding as of January 24, 2017. Shares of our common stock being
offered pursuant to this reoffer prospectus by a selling stockholder are
counted as outstanding for computing the percentage of that particular
selling stockholder but are not counted as outstanding for computing the
percentage of any other person.
|
|
|
|
|
|
|
(4)
|
Donovan Jones is a director and the President and Chief
Executive Officer of our company.
|
|
|
|
|
|
|
(5)
|
Includes 39,170 shares of our common stock underlying
39,170 stock options that are vested or will be vested within 60 days of
January 24, 2017, consisting of 32,503 stock options issued on December
12, 2013 that are exercisable at a price of $2.50 per share, expiring on
December 13, 2018 and 6,667 stock options issued on July 15, 2016 that are
exercisable at a price of $2.40 per share, expiring on July 15, 2021. Also
includes 103,361 shares of a total of 134,173 shares of our common stock
underlying deferred share units. Does not include 40,830 shares of our
common stock underlying 40,830 unvested stock options which are being
offered under this reoffer prospectus.
|
|
|
|
|
|
|
(6)
|
Consists of 104,866 shares of common stock issued or
issuable upon exercise of stock options and 23,703 shares of common stock
issued under our Employee Share Purchase Plan.
|
|
|
|
|
|
|
(7)
|
David Karp is the Chief Financial Officer, Treasurer and
Secretary of our company.
|
|
|
|
|
|
|
(8)
|
Includes 19,589 shares of our common stock underlying
19,589 stock options that are vested or will be vested within 60 days of
January 24, 2017, consisting of 16,256 stock options issued on December
12, 2013, that are exercisable at a price of $2.50 per share, expiring on
December 12, 2018 and 3,333 stock options issued on July 15, 2016, that
are exercisable at a price of $2.40 per share, expiring on July 15, 2021.
Also includes 31,586 shares of a total of 46,992 shares of our common
stock underlying deferred share units. Does not include 20,411 shares of
our common stock underlying 20,411 unvested stock options which are being
offered under this reoffer prospectus.
|
|
|
|
|
|
|
(9)
|
Consists of 54,252 shares of common stock issued or
issuable upon exercise of stock options and 5,116 shares of common stock
issued under our Employee Share Purchase Plan.
|
|
|
|
|
|
|
(10)
|
Todd Carothers is the Executive Vice President, Sales and
Marketing of our company.
|
|
|
|
|
|
|
(11)
|
Includes 34,388 shares of our common stock underlying
34,388 stock options that are vested or will be vested within 60 days of
January 24, 2017, consisting of 20,000 stock options issued on July 19,
2012, that are exercisable at the price of $2.50 per share, expiring on
July 19, 2017, 4,584 stock options issued on July 25, 2013, that are
exercisable at a price of $2.50 per share, expiring on July 25, 2018,
6,672 stock options issued on July 11, 2014 that are exercisable at a
price of $2.50 per share, expiring on July 11, 2019 and 3,132 stock
options issued on July 17, 2015 that are exercisable at a price of $2.50
per share, expiring on July 17, 2020. Also includes 3,824 shares of our
common stock underlying deferred share units. Does not include 8,112
shares of our common stock underlying 8,112 unvested stock options which
are being offered under this reoffer prospectus.
|
12
|
|
(12)
|
Consists of 44,645 shares of common stock issued or
issuable upon exercise of stock options and 2,942 share of common stock
issued under our Employee Share Purchase Plan.
|
Plan of Distribution
The selling stockholders may, from time to time, sell all or a
portion of the shares of our common stock on any market upon which our common
stock may be listed or quoted (currently the NASDAQ Capital Market and the
Toronto Stock Exchange), in privately negotiated transactions or otherwise. Such
sales may be at fixed prices prevailing at the time of sale, at prices related
to the market prices or at negotiated prices. The shares of our common stock
being offered for resale pursuant to this reoffer prospectus may be sold by the
selling stockholders by one or more of the following methods, without
limitation:
|
|
1.
|
block trades in which the broker or dealer so engaged
will attempt to sell the shares of our common stock as agent but may
position and resell a portion of the block as principal to facilitate the
transaction;
|
|
|
|
|
|
|
2.
|
purchases by broker or dealer as principal and resale by
the broker or dealer for its account pursuant to this reoffer
prospectus;
|
|
|
|
|
|
|
3.
|
an exchange distribution in accordance with the rules of
the applicable exchange;
|
|
|
|
|
|
|
4.
|
ordinary brokerage transactions and transactions in which
the broker solicits purchasers;
|
|
|
|
|
|
|
5.
|
privately negotiated transactions;
|
|
|
|
|
|
|
6.
|
market sales (both long and short to the extent permitted
under the federal securities laws);
|
|
|
|
|
|
|
7.
|
at the market to or through market makers or into an
existing market for the shares;
|
|
|
|
|
|
|
8.
|
through transactions in options, swaps or other
derivatives (whether exchange listed or otherwise);
|
|
|
|
|
|
|
9.
|
a combination of any aforementioned methods of sale;
and
|
|
|
|
|
|
|
10.
|
Any other method permitted pursuant to applicable
law.
|
In effecting sales, brokers and dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from a selling stockholder or, if
any of the broker-dealers act as an agent for the purchaser of such shares, from
a purchaser in amounts to be negotiated which are not expected to exceed those
customary in the types of transactions involved. Broker-dealers may agree with a
selling stockholder to sell a specified number of the shares of our common stock
at a stipulated price per share. Such an agreement may also require the
broker-dealer to purchase as principal any unsold shares of our common stock at
the price required to fulfill the broker-dealer commitment to the selling
stockholder if such broker-dealer is unable to sell the shares on behalf of the
selling stockholder. Broker-dealers who acquire shares of our common stock as
principal may thereafter resell the shares of our common stock from time to time
in transactions which may involve block transactions and sales to and through
other broker-dealers, including transactions of the nature described above. Such
sales by a broker-dealer could be at prices and on terms then prevailing at the
time of sale, at prices related to the then-current market price or in
negotiated transactions. In connection with such resale, the broker-dealer may
pay to or receive from the purchasers of the shares commissions as described
above.
The selling stockholders and any broker-dealers or agents that
participate with the selling stockholders in the sale of the shares of our
common stock may be deemed to be “underwriters” within the meaning of the
Securities Act of 1933 in connection with these sales. In that event, any
commissions received by the broker-dealers or agents and any profit on the
resale of the shares of common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act of 1933.
From time to time, any of the selling stockholders may pledge
shares of our common stock pursuant to the margin provisions of customer
agreements with brokers. Upon a default by a selling stockholder, his or her
broker may offer and sell the pledged shares of our common stock from time to time. Upon a
sale of the shares of our common stock, we believe that the selling stockholders
will satisfy the prospectus delivery requirements under the Securities Act of
1933. We intend to file any amendments or other necessary documents in
compliance with the Securities Act of 1933 which may be required in the event
any of the selling stockholders defaults under any customer agreement with
brokers.
13
To the extent required under the Securities Act of 1933, a
post-effective amendment to the registration statement of which this reoffer
prospectus forms a part will be filed disclosing the name of any broker-dealers,
the number of shares of our common stock involved, the price at which our common
stock is to be sold, the commissions paid or discounts or concessions allowed to
such broker-dealers, where applicable, that such broker-dealers did not conduct
any investigation to verify the information set out or incorporated by reference
in this reoffer prospectus and other facts material to the transaction.
We and the selling stockholders will be subject to applicable
provisions of the Securities Exchange Act of 1934 and the rules and regulations
under it, including, without limitation, Rule 10b-5 and, insofar as a selling
stockholder is a distribution participant and we, under certain circumstances,
may be a distribution participant, under Regulation M. All of the foregoing may
affect the marketability of our common stock.
All expenses for this reoffer prospectus and related
registration statement including legal, accounting, printing and mailing fees
are and will be borne by us. Any commissions, discounts or other fees payable to
brokers or dealers in connection with any sale of the shares of common stock
will be borne by the selling stockholders, the purchasers participating in such
transaction, or both.
Any shares of our common stock being offered pursuant to this
reoffer prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act of 1933, may be sold under Rule 144 rather than pursuant to this
reoffer prospectus.
Under the Securities Exchange Act of 1934, any person engaged
in a distribution of the shares offered by this reoffer prospectus may not
simultaneously engage in market making activities with respect to our common
shares during the applicable “cooling off” periods prior to the commencement of
such distribution. In addition, and without limiting the foregoing, the selling
stockholders will be subject to applicable provisions of the Securities Exchange
Act of 1934 and the rules and regulations thereunder, which provisions may limit
the timing of purchases and sales of the shares by the selling stockholders.
Experts and Counsel
Our consolidated financial statements as of April 30, 2016 and
April 30, 2015 and for the years then ended have been incorporated by reference
in this reoffer prospectus in reliance on the report of BDO Canada LLP, an
independent registered public accounting firm, which has also been incorporated
by reference in this reoffer prospectus, given on the authority of said firm as
experts in auditing and accounting.
Clark Wilson LLP, of Suite 900 – 885 West Georgia Street,
Vancouver, British Columbia, Canada has provided an opinion on the validity of
the shares of our common stock being offered pursuant to this reoffer
prospectus.
Interest of Named Experts and Counsel
No expert named in the registration statement of which this
reoffer prospectus forms a part as having prepared or certified any part thereof
(or is named as having prepared or certified a report or valuation for use in
connection with such registration statement) or counsel named in this reoffer
prospectus as having given an opinion upon the validity of the securities being
offered pursuant to this reoffer prospectus or upon other legal matters in
connection with the registration or offering such securities was employed for
such purpose on a contingency basis. Also at the time of such preparation,
certification or opinion or at any time thereafter, through the date of
effectiveness of such registration statement or that part of such registration
statement to which such preparation, certification or opinion relates, no such
person had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in our company or any of its parents or
subsidiaries. Nor was any such person connected with our company or any of its
parents or subsidiaries as a promoter, managing or principal underwriter, voting
trustee, director, officer or employee.
14
Material Changes
There have been no material changes to the affairs of our
company since April 30, 2016 which have not previously been described in a
report on Form 10-K, Form 10-Q or Form 8-K filed with the Securities and
Exchange Commission.
Incorporation of Certain Information by Reference
The following documents filed by our company with the
Securities and Exchange Commission are incorporated into this reoffer prospectus
by reference:
|
1.
|
our annual report on Form 10-K filed on July 14, 2016
(including portions of our proxy statement for the annual meeting of
stockholders held on September 12, 2016, filed on August 12, 2016, to the
extent specifically incorporated by reference therein);
|
|
|
|
|
2.
|
our quarterly reports on Form 10-Q filed on September 14,
2016 and December 14, 2016;
|
|
|
|
|
3.
|
our current reports on Form 8-K filed on September 15,
2016, November 1, 2016 and December 19, 2016; and
|
|
|
|
|
4.
|
the description of our common stock contained in our Form
8-A filed on June 29, 2012, which refers to the description of our
securities contained in our registration statement on Form S-1 filed on
October 7, 2011, including any amendments or reports filed for the purpose
of updating such description.
|
In addition to the foregoing, all documents that we
subsequently file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-effective
amendment indicating that all of the securities offered pursuant to the
registration statement of which this reoffer prospectus forms a part have been
sold or deregistering all securities then remaining unsold, will be deemed to be
incorporated by reference into this reoffer prospectus and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this reoffer prospectus will be deemed to be
modified or superseded for purposes of this reoffer prospectus to the extent
that a statement contained in this reoffer prospectus or in any subsequently
filed document that is also incorporated by reference in this reoffer prospectus
modifies or supersedes such statement. Any statement so modified or superseded
will not be deemed, except as so modified or superseded, to constitute a part of
this reoffer prospectus.
Where You Can Find More Information
We will provide to each person, including any beneficial
holder, to whom this reoffer prospectus is delivered, at no cost, upon written
or oral request, a copy of any or all of the information that has been
incorporated by reference in this reoffer prospectus but not delivered with this
reoffer prospectus. Requests for documents should be directed to CounterPath
Corporation, Suite 300, One Bentall Centre, 505 Burrard Street, Vancouver,
British Columbia V7X 1M3, Canada, Attention: Chief Financial Officer, telephone
number (604) 320-3344. Exhibits to these filings will not be sent unless those
exhibits have been specifically incorporated by reference in such filings.
We file annual, quarterly and current reports, proxy statements
and other information with the Securities and Exchange Commission. Such filings
are available to the public over the internet at the Securities and Exchange
Commission’s website at http://www.sec.gov. The public may also read and copy
any materials we file with the Securities and Exchange Commission at its public
reference room at 100 F Street, N.E. Washington, D.C. 20549. The public may
obtain information on the operation of the public reference room by calling the
Securities and Exchange Commission at 1-800-SEC-0330.
We have filed with the Securities and Exchange Commission a
registration statement on Form S-8 under the Securities Act of 1933 with respect
to the securities offered under this reoffer prospectus. This reoffer
prospectus, which forms a part of that registration statement, does not contain
all information included in the registration statement. Certain information is
omitted and you should refer to the registration statement and its exhibits.
You should only rely on the information incorporated by
reference or provided in this reoffer prospectus or any supplement. We have not
authorized anyone else to provide you with different information. This reoffer
prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby by anyone in any jurisdiction in which
such offer or solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so or to any person to whom it is
unlawful to make such offer or solicitation. You should not assume that the information in this reoffer prospectus or any supplement is
accurate as of any date other than the date of this reoffer prospectus.
15
235,524 Shares
COUNTERPATH CORPORATION
Common Stock
_________________________________
Reoffer Prospectus
_________________________________
January 31, 2017
16
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by our company with the
Securities and Exchange Commission are incorporated into this registration
statement by reference:
|
1.
|
our annual report on Form 10-K filed on July 14, 2016
(including portions of our proxy statement for the annual meeting of
stockholders held on September 12, 2016, filed on August 12, 2016, to the
extent specifically incorporated by reference therein);
|
|
|
|
|
2.
|
our quarterly reports on Form 10-Q filed on September 14,
2016 and December 14, 2016;
|
|
|
|
|
3.
|
our current reports on Form 8-K filed on September 15,
2016, November 1, 2016 and December 19, 2016; and
|
|
|
|
|
4.
|
the description of our common stock contained in our Form
8-A filed on June 29, 2012, which refers to the description of our
securities contained in our registration statement on Form S-1 filed on
October 7, 2011, including any amendments or reports filed for the purpose
of updating such description.
|
In addition to the foregoing, all documents that we
subsequently file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-effective
amendment indicating that all of the securities offered pursuant to this
registration statement have been sold or deregistering all securities then
remaining unsold, will be deemed to be incorporated by reference into this
registration statement and to be part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference in
this registration statement will be deemed to be modified or superseded for
purposes of this registration statement to the extent that a statement contained
in this registration statement or in any subsequently filed document that is
also incorporated by reference in this registration statement modifies or
supersedes such statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part of this
registration statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
No expert named in this registration statement as having
prepared or certified any part thereof (or is named as having prepared or
certified a report or valuation for use in connection with this registration
statement) or counsel named in this registration statement as having given an
opinion upon the validity of the securities being offered pursuant to this
registration statement or upon other legal matters in connection with the
registration or offering such securities was employed for such purpose on a
contingency basis. Also at the time of such preparation, certification or
opinion or at any time thereafter, through the date of effectiveness of such
registration statement or that part of such registration statement to which such
preparation, certification or opinion relates, no such person had, or is to
receive, in connection with the offering, a substantial interest, direct or
indirect, in our company or any of its parents or subsidiaries. Nor was any such
person connected with our company or any of its parents or subsidiaries as a
promoter, managing or principal underwriter, voting trustee, director, officer
or employee.
Item 6. Indemnification of Directors and Officers.
Nevada corporation law provides that:
- a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise,
17
against expenses, including attorneys’
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with the action, suit or proceeding if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful;
- a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses, including amounts paid in settlement and attorneys’
fees actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he acted in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue or matter as
to which such a person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the corporation or
for amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper; and
- to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding, or in defense of any
claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys’ fees, actually and reasonably incurred by him in
connection with the defense.
We may make any discretionary indemnification only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
- by our stockholders;
- by our board of directors by majority
vote of a quorum consisting of directors who were not parties to the action,
suit or proceeding;
- if a majority vote of a quorum
consisting of directors who were not parties to the action, suit or proceeding
so orders, by independent legal counsel in a written opinion;
- if a quorum consisting of directors
who were not parties to the action, suit or proceeding cannot be obtained, by
independent legal counsel in a written opinion; or
- by court order.
Our bylaws provide that we shall, to the maximum extent
permitted by applicable law, have the power to indemnify each of our agents
against expenses and shall have the power to advance to each such agent expenses
incurred in defending any such proceeding to the maximum extent permitted by
that law. For this purpose, an “agent” includes any person who is or was a
director, officer, employee or other agent of our company; or is or was serving
at the request of our company as a director, officer, employee or agent of our
company or another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise; or was a director, officer, employee or agent of a
foreign or domestic corporation which was a predecessor corporation of our
company or of another enterprise at the request of such predecessor corporation;
“proceeding” means any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative; and “expenses”
include, without limitation, all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, and other amounts
actually and reasonably incurred in connection with any proceeding arising by
reason of the fact any such person is or was an agent of our company. Our bylaws
also provide that we may, upon the resolution of the directors, purchase and
maintain insurance on behalf of any agent of our company against any liability
asserted against or incurred by the agent in such capacity or arising out of the
agent’s status as such, whether or not we would have the power to indemnify the
agent against such liability under our bylaws.
18
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
*Filed herewith.
19
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
1. to file, during any period in which
offers or sales are being made, a post-effective amendment to this registration
statement:
i. to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933;
ii. to reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement; and
iii. to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
provided, however,
that
paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on
Form S-8, and the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to
the Securities and Exchange Commission by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement;
2. that, for the purpose of determining
any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
3. to remove from registration by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan’s annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Vancouver, Province of British Columbia on January
31, 2017.
COUNTERPATH CORPORATION
|
By:
|
/s/ Donovan Jones
|
|
|
|
Donovan Jones
|
|
|
|
President, Chief Executive
Officer & Director
|
|
|
|
Date: January 31, 2017
|
|
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS
, that each person
whose signature appears below constitutes and appoints Donovan Jones and David
Karp, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and re-substitution, for him and in his name, place
and stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this registration statement (and any registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933 for the
offering which this registration statement relates), and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or any of
them, or of their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
Signature
|
Title
|
Date
|
|
|
|
|
|
|
|
|
|
/s/ Terence
Matthews
|
|
|
|
Terence Matthews
|
Chairman and Director
|
January 31, 2017
|
|
|
|
|
|
|
|
|
|
/s/ Donovan
Jones
|
|
|
|
Donovan Jones
|
President, Chief Executive Officer and
|
January 31, 2017
|
|
|
Director
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
/s/ David
Karp
|
|
|
|
David Karp
|
Chief Financial Officer, Treasurer and
|
January 31, 2017
|
|
|
Secretary (Principal Financial
|
|
|
|
Officer, Principal Accounting Officer)
|
|
|
|
|
|
|
/s/ Owen
Matthews
|
|
|
|
Owen Matthews
|
Vice Chairman and Director
|
January 31, 2017
|
|
|
|
|
|
|
|
|
|
/s/ Bruce
Joyce
|
|
|
|
Bruce Joyce
|
Director
|
January 31, 2017
|
21
|
/s/
Chris Cooper
|
|
|
|
Chris Cooper
|
Director
|
January 31, 2017
|
|
|
|
|
|
|
|
|
|
/s/
Larry Timlick
|
|
|
|
Larry Timlick
|
Director
|
January 31, 2017
|
22
CounterPath (NASDAQ:CPAH)
Historical Stock Chart
From Mar 2024 to Apr 2024
CounterPath (NASDAQ:CPAH)
Historical Stock Chart
From Apr 2023 to Apr 2024
