Item 3.02 Unregistered Sales of Equity Securities.
On December 21, 2007 we conducted
the closing of a combined private offering (“Offering”) under Regulation D and Regulation
S for the sale to accredited investors of shares of our common stock (“Shares”) and warrants (“Warrants”) to purchase
a number of shares of our common stock equal to one half of the number of shares sold in the Offering (the “Warrant Shares”).
We received approximately $6,203,000 in aggregate gross proceeds from the sale of 2,007,508 Shares and Warrants
to purchase 1,003,755 shares in the Offering. The units consisting of one Share and a Warrant to
purchase one-half share were sold at $3.09, representing a discount of approximately 25% from the
average of the closing market prices of our common stock for the five consecutive trading days up
to and including November 30, 2007. The exercise price of the four year Warrants issued as
part of the units was $4.74 per share. We may receive additional gross proceeds of approximately
$4,758,000 from the exercise of the Warrants, exclusive of any proceeds from the exercise of warrants issued
to the placement agents. No assurances can be given that any of the Warrants will be exercised.
In connection with the offer and sale of
the units to the purchasers in the Offering, we relied on the exemption under Section 4(2) of the
Securities Act of 1933, as amended (the “Securities Act”), Regulation S and Rule 506 promulgated
thereunder. We believe that the purchasers are “accredited investors”, as such terms is defined in Rule 501 (a) under the Securities
Act.
Registration Statement
In connection with the Offering, we agreed to file a registration statement within 60 days of
receipt of AMEX approval of issuance of the Shares (December 21, 2007) with the Securities and
Exchange Commission covering the secondary offering and resale of the Shares, the Warrant Shares and
the shares issuable on exercise of the placement agent warrants issued in the Offering.
Compensation to Placement Agents
In connection with the closing, we utilized the services of Galileo Asset Management, S.A., a Swiss
corporation (“Galileo”) for sales to
non-U.S.
persons and Spencer Clarke, LLC (“Spencer Clarke”), a FINRA
member broker-dealer and licensed sub agents working under Spencer Clarke for sales in the United
States. For their services, the placement agents received commissions and due diligence fees of an
aggregate of approximately $770,000 and warrants to purchase 200,751 shares of our common
stock. Included in this amount is a $150,000 non-accountable expense allowance paid to the placement agents
in connection with the Offering and we have also agreed to pay a six percent (6%) cash commission upon exercise
of the Warrants by the purchasers.
Item 7.01 Regulation FD Disclosure.
On December 24, 2007, we issued a press release
announcing the closing of the Offering. A copy of the press release containing such announcement
is furnished herewith as Exhibit 99.1 and incorporated herein by this reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press Release, dated December 24, 2007, announcing the closing of the Offering (furnished pursuant to Item 7.01).
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