Item 1.01. Entry into a Material Definitive Agreement.
August 23, 2019, we entered into an underwriting agreement (the
“Agreement”) with Maxim Group LLC
(“Maxim”), as the sole underwriter and book running
manager, with respect to the issuance and sale of an aggregate of
3,600,000 shares (the “Shares”) of Class A Common
stock, par value $0.0001 per share (the “Common
Stock”), together with warrants to purchase an aggregate of
3,600,000 shares of Class A Common stock (the
“Warrants”) at an exercise price equal to $1.20 per
share of Common Stock (the “Exercise Price”) in an
underwritten public offering. The terms of the Warrants are set
forth in a Form of Warrant attached within the Warrant Agreement
attached to this report on Form 8-K. The public offering price for
each Share together with the accompanying Warrant was $1.05.
Pursuant to the Agreement, we also granted Maxim a 45-day option to
purchase an additional 540,000 Shares and/or additional Warrants to
purchase 540,000 Shares to cover any over-allotments made by the
underwriters in the sale and distribution of the Shares and
Warrants. The gross proceeds of the offering, before deducting
underwriter discounts and commissions and other offering expenses,
are $3,780,000, or approximately $4,347,000 if the underwriters
exercise in full their overallotment option.
Common Stock and Warrants are being offered and sold to the public
pursuant to the Company’s registration statement on Form S-3,
(File No. 333-230786), which was declared effective with the U.S.
Securities and Exchange Commission (“SEC”) on June 4,
2019. A preliminary prospectus supplement relating to the offering
was filed with the SEC on August 21, 2019 and is available on the
SEC’s web site at http://www.sec.gov. Copies of the final
prospectus supplement may be obtained from Maxim Group LLC, 405
Lexington Avenue, New York, NY 10174, (800) 724-0761.
to the Agreement, we agreed to pay Maxim a cash fee equal to 8% of
the aggregate gross proceeds raised in this offering. We have also
agreed to pay Maxim a non-accountable expense allowance relating to
the offering, including without limitation the reasonable fees,
disbursements and other charges of the underwriters’ counsel,
up to $65,000.
Agreement contains customary representations, warranties and
agreements by us, customary conditions to closing, indemnification
obligations of us and Maxim, including for liabilities under the
Securities Act of 1933, as amended, other obligations of the
parties and termination provisions. The representations, warranties
and covenants contained in the Agreement were made only for
purposes of such agreement and as of specific dates, were solely
for the benefit of the parties to such Agreement, and may be
subject to limitations agreed upon by the contracting parties,
including being qualified by confidential disclosures exchanged
between the parties in connection with the execution of the
Agreement. The offering closed on August 27, 2019 (the
to the Form of Warrant, each Warrant will be exercisable beginning
on the date of issuance (the “Initial Exercise Date”).
The Warrants will be exercisable for five years from the Initial
Exercise Date, but not thereafter.
Warrants include an adjustment provision that, subject to certain
exceptions, reduces their exercise price if the Company issues
Common Stock or Common Stock equivalents at a price lower than the
then-current exercise price of the Warrants.
to limited exceptions, a holder of Warrants 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,
at the election of the holder, 9.99%) of the number of shares of
our Common Stock outstanding immediately after giving effect to
such exercise (the “Beneficial Ownership Limitation”);
provided, however, that upon 61 days’ prior notice to us, the
holder may increase the Beneficial Ownership Limitation, provided
that in no event shall the Beneficial Ownership Limitation exceed
exercise price and number of the shares of our Common Stock
issuable upon the exercise of the Warrants will be subject to
adjustment in the event of any stock dividends and splits, reverse
stock split, recapitalization, reorganization or similar
transaction, as described in the Form of Warrant.
foregoing descriptions of the Agreement and Form of Warrant are
qualified in their entirety by reference to the full text of the
Agreement and the Form of Warrant which are attached to this report
on Form 8-K as Exhibits 1.1 and 4.1.
of the legal opinion of Law Office of Clifford J. Hunt, P.A.
relating to the legality of the issuance and sale of the Shares and
Warrants is filed as Exhibit 5.1 to this Current Report on Form
Company’s press releases, dated August 21, 2019 and August
23, 2019, announcing the offering and pricing of the offering,
respectively, are attached as Exhibits 99.1 and 99.2, respectively,
to the Current Report on Form 8-K.
report does not constitute an offer to sell or the solicitation of
an offer to buy, and these securities cannot be sold in any state
or jurisdiction in which this offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of any state or jurisdiction. Any offer will be
made only by means of a prospectus, including a prospectus
supplement, forming a part of the effective registration
report contains forward-looking statements. Forward-looking
statements include, but are not limited to, statements that express
our intentions, beliefs, expectations, strategies, predictions or
any other statements related to our future activities, or future
events or conditions. These statements are based on current
expectations, estimates and projections about our business based,
in part, on assumptions made by management and involve a number of
risks and uncertainties, many of which are beyond the control of
the Company including the substantial doubt relating to the
Company’s ability to continue as a going concern. These
statements are not guarantees of future performances and involve
risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in the forward-looking statements
due to numerous factors, including those risks discussed in our
Annual Report on Form 10-K and in other documents that we file from
time to time with the SEC. Any forward-looking statements speak
only as of the date on which they are made, and we do not undertake
any obligation to update any forward-looking statement to reflect
events or circumstances after the date of this report, except as
required by law.