Item 3.02 Unregistered Sales of Equity Securities.
On December 18, 2019, Glowpoint, Inc. (the "Company") conducted a subsequent closing (the "Subsequent Closing") pursuant to the Series E Preferred Stock Purchase Agreement, dated October 1, 2019, by and among the Company and the investors party thereto (the "Purchase Agreement"), the form of which was previously filed by the Company with the Securities and Exchange Commission (the "SEC") as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 7, 2019 (the "October 8-K"). At the Subsequent Closing, the Company issued, in a private placement, an additional 43,509 shares of its 6.0% Series E Convertible Preferred Stock, par value $0.0001 per share (the "Preferred Stock"), to the investors party to the Purchase Agreement, resulting in an aggregate of approximately $1,240,000 in gross proceeds to the Company. The Subsequent Closing was completed on substantially the same terms as the initial closing under the Purchase Agreement described in the October 8-K. The Company did not pay any commissions or discounts in connection with the Subsequent Closing, and expects to use the net proceeds therefrom for general corporate purposes, which may include working capital, capital expenditures and other corporate expenses.
The shares of Preferred Stock issued in the Subsequent Closing are covered by the Registration Rights Agreement, dated October 1, 2019 (the "Rights Agreement"), by and among the Company and the investors party thereto, the form of which was previously filed by the Company with the SEC as Exhibit 10.2 to the October 8-K. Pursuant to the Rights Agreement, among other things, the Company has provided the purchasers in the Subsequent Closing with certain rights to require the Company to file and maintain the effectiveness of a registration statement with respect to the re-sale of shares of Company Common Stock underlying the shares of Preferred Stock issued in the Subsequent Closing and held by the Purchasers.
Pursuant to the Certificate of Designations for the Preferred Stock, 175,000 shares of preferred stock have been designated as Preferred Stock, and each of the shares of Preferred Stock is automatically convertible, upon the occurrence of both (i) approval of the conversion of the Preferred Stock by the holders of more than 50.0% of the issued and outstanding shares of the Company’s Common Stock, Series A-2 Preferred Stock and Series C Preferred Stock, voting together as a single class on an as-converted basis, present in person or by proxy, at a duly called and held meeting of the Company’s stockholders; and (ii) receipt of all required authorizations and approvals from the NYSE American (or any such other exchange upon which the Company’s securities are then listed for trading) for the listing of the Common Stock underlying the Preferred Stock and the continued listing of the Company after conversion of the Preferred Stock, into a number of shares of the Company’s Common Stock equal to the accrued value of the share, which is initially $28.50, plus any accrued dividends thereon (the "Accrued Value"), divided by the Conversion Price, which is initially $2.85 per share, subject to specified adjustments (the "Conversion Price"). Based on the initial Conversion Price, approximately 1,315,790 shares of Common Stock would be issuable upon conversion of all issued and outstanding shares of Preferred Stock, including those shares issued at the initial closing on October 1, 2019 and at the Subsequent Closing, combined.
The offering and sale of Preferred Stock in the Subsequent Closing is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder, and pursuant to reliance on similar exemptions under applicable state laws. As a result, the securities sold in the Subsequent Closing were not registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements. Each of the purchasers in the Subsequent Closing represented that it is an accredited investor within the meaning of Rule 501 of Regulation D, and is acquiring securities in the Subsequent Closing for investment only and not with a view toward, or for resale in connection with, the public sale or distribution thereof. The shares of Preferred Stock sold in the Subsequent Closing were offered without any general solicitation by the Company or its representatives. Neither this Current Report on Form 8-K, nor the exhibits attached hereto, is an offer to sell or the solicitation of an offer to buy the securities described herein.
The above description of each of the Purchase Agreement, the Rights Agreement, the Preferred Stock and the Subsequent Closing is only a summary and does not purport to be complete and is qualified in its entirety by reference to (i) the October 8-K, which is incorporated herein by reference, and (ii) the full text of the Certificate of Designations of the Preferred Stock, the Purchase Agreement and the Rights Agreement, copies of which are filed as Exhibits 3.1, 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 11, 2019, the Board of Directors of the Company (the "Board") adopted the Glowpoint, Inc. 2019 Equity Incentive Plan (the "2019 Plan"), subject to requisite stockholder approval. On December 19, 2019, the 2019 Plan was approved by the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders (the "Annual Meeting"). Also on December 19, 2019, the Board terminated the Glowpoint, Inc. 2014 Equity Incentive Plan (the "2014 Plan"). Notwithstanding the termination of the 2014 Plan, outstanding awards under the 2014 Plan will remain in effect accordance with their terms.
The purpose of the 2019 Plan is to enhance long-term profitability and stockholder value by offering Common Stock and Common Stock-based and other performance incentives to those employees, directors and consultants who are key to the Company’s growth and success. The Company also views the 2019 Plan as a vehicle to attract and retain experienced employees and to align employees’ economic incentives with those of its stockholders. Participation in the 2019 Plan is limited to the Company’s employees, consultants, advisors, independent contractors and directors. The maximum number of shares of the Company’s Common Stock initially reserved and available for issuance under the 2019 Plan is equal to the sum of (i) 2,600,000 shares the Company’s Common Stock and (ii) the shares of the Company’s Common Stock remaining available for issuance under the 2014 Plan at the time of its termination, all of which are available for issuance as stock options, restricted stock, restricted stock units, performance awards, stock
appreciation rights, dividend equivalents, other stock-based awards and cash awards, based upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof.
The above description of the 2019 Plan is a summary only and does not purport to be complete and is qualified in its entirety by reference to (i) the principal terms of the 2019 Plan as described in the Company’s proxy statement for the Annual Meeting, filed with the SEC on November 29, 2019, which description is incorporated herein by reference; and (ii) the full text of the 2019 Plan, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.