EMAN eMagin Corporation

Item 1.01   Entry into a Material Definitive Agreement

On April 4, 2019, eMagin Corporation (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a certain institutional investor (the “Purchaser”), pursuant to which the Company agreed to issue and sell in a registered direct offering (the “Registered Direct Offering”), an aggregate of 4,000,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a negotiated purchase price of $0.50 per share, for aggregate gross proceeds to the Company of $2.0 million, before deducting placement agent fees and other offering expenses payable by the Company. The Shares were offered by the Company pursuant to an effective shelf registration statement on Form S-3, which was originally filed with the Securities and Exchange Commission on June 20, 2017, and was declared effective on July 11, 2017 (File No. 333-218838) (the “Registration Statement”) and a related prospectus supplement.

In a concurrent private placement (the “Private Placement”), the Company agreed to issue to the Purchaser warrants to purchase 3,000,000 shares of Common Stock, which represent 75% of the number of shares of Common Stock purchased in the Registered Direct Offering, pursuant to that certain Common Stock Purchase Warrant, by and between the Company and the Purchaser (the “Warrants”). The Warrants will be exercisable six months after issuance at an initial exercise price of $0.78 per share and will expire on the five and a half year anniversary of the date of issuance. A holder of a Warrant will not have the right to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or 9.99%, at the election of the holder, prior to the date of issuance) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that upon prior notice to the Company, the holder may increase or decrease the Beneficial Ownership Limitation, provided that in no event shall the Beneficial Ownership Limitation exceed 9.99% and any increase in the Beneficial Ownership Limitation will not be effective until 61 days following notice of such increase from the holder to the Company. If the Purchaser already beneficially holds in excess of 9.99% of the Company’s outstanding shares of common stock at closing, it may elect to not be subject to this Beneficial Ownership Limitation.

The exercise price of the Warrants and shares of Common Stock issuable upon the exercise of the Warrants (the “Warrant Shares”) are subject to adjustment in the event of any stock dividends and splits, reverse stock splits, stock dividends, recapitalizations, reorganizations or similar transactions, as described in the Warrants. The Warrants will be exercisable on a “cashless” basis in certain circumstances.

The Warrants and the Warrant Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s Registration Statement and are instead being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. Each Purchaser is an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act. Each Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of its investment in the Warrants and Warrant Shares and has so evaluated the merits and risks of such investment, has access to the type of information normally provided in a prospectus for a registered securities offering, and has agreed not to resell or distribute the Warrants or the Warrant Shares to the public except pursuant to sales registered or exempted under the Securities Act.

The closing of the Registered Direct Offering and the Private Placement occurred on April 8, 2019.

H.C. Wainwright & Co., LLC (the “Placement Agent”) acted as the Company’s exclusive placement agent in connection with the Registered Direct Offering and the Private Placement and received an aggregate cash fee equal to 6.0% of the gross proceeds received by the Company from the Registered Direct Offering and an aggregate of up to $75,000 for certain expenses. In addition, the Company agreed to grant the placement agent warrants to purchase shares of Common Stock in an amount equal to 3% of the Shares sold to the Purchaser in the Registered Direct Offering, or 120,000 shares of Common Stock, on substantially the same terms as the Warrants, with an initial exercise price of $0.55 per share and expiration date of April 4, 2024 (the “Placement Agent Warrants”) in a private placement.

Neither the Placement Agent Warrants nor the shares of Common Stock issuable upon the exercise of the Placement

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Agent Warrants (the “Placement Agent Warrant Shares”) are registered under the Securities Act or any state securities laws. The Placement Agent Warrants and the Placement Agent Warrant Shares were issued in reliance on the exemptions from registration provided by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder. The Placement Agent has represented that it is an accredited investor, as defined in Rule 501 of Regulation D promulgated under the Securities Act.

Per the terms of the Purchase Agreement, the Company has agreed with the Purchaser to the following: (i) that subject to certain exceptions, the Company will not, within the ninety day period immediately following the closing of the Registered Direct Offering, issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents; and (ii) that the Company will not, within the twelve month period immediately following the closing of the Registered Direct Offering, enter into an agreement to effect a “Variable Rate Transaction,” as that term is defined in the Purchase Agreement. The Company also agreed to indemnify the Purchaser against certain losses resulting from its breach of any representations, warranties, covenants and agreements made by the Company in the Purchase Agreement and certain related transaction agreements, as well as under certain other circumstances described in the Purchase Agreement.

The representations, warranties, covenants and agreements contained in the Purchase Agreement and Warrants were made solely for the benefit of the parties to the Purchase Agreement and Warrants. In addition, such representations, warranties, covenants and agreements (i) are intended as a way of allocating the risk between the parties to the Purchase Agreement and Warrants and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by shareholders of, or other investors in, the Company. Accordingly, the form of Purchase Agreement and form of Warrant are filed with this report only to provide investors with information regarding the terms of transaction, and not to provide investors with any other factual information regarding the Company. Shareholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement and Warrants, which subsequent information may or may not be fully reflected in public disclosures.

The net proceeds to the Company from the Registered Direct Offering, after deducting the Placement Agent’s fees and expenses and the Company’s estimated offering expenses, and excluding the proceeds, if any, from the exercise of the Warrants and the Placement Agent Warrants, are expected to be approximately $1.7 million. The Company currently intends to use these net proceeds for working capital and other general corporate purposes.

The legal opinion of Goodwin Procter, LLP relating to the legality of the issuance and sale of the Shares in the Registered Direct Offering is attached as Exhibit 5.1 to this Current Report on Form 8-K.

The foregoing summaries of the Registered Direct Offering, the shares of Common Stock issued in connection therewith, the Purchase Agreement, the Warrants, Warrant Shares, Placement Agent Warrants and Placement Agent Warrant Shares do not purport to be complete and are subject to, and qualified in their entirety by, reference to the definitive transaction documents.

Copies of the form of Purchase Agreement and the form of Warrant are attached hereto as Exhibits 10.1 and 4.1, respectively, and are incorporated herein by reference.