Quarterly report pursuant to Section 13 or 15(d)

Common Stock Subscription Agreements

Common Stock Subscription Agreements
9 Months Ended
Sep. 30, 2021
Equity [Abstract]  
Common Stock Subscription Agreements

15. Common Stock Subscription Agreements


On September 30, 2021, the Company entered into subscription agreements (the “Subscription Agreements”) with certain institutional and retail investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue, in a registered direct offering (the “Offering”), an aggregate of 1,000,000 shares (the “Shares”) of the Company’s Common Stock, at a negotiated purchase price per share of $6.20 (the “Shares”), for aggregate gross proceeds to the Company of approximately $6,200,000. The offering price per share was negotiated based on the average closing price of the Company’s Common Stock as quoted on Nasdaq over the three-week period immediately preceding the date of the Subscription Agreements, less a five percent discount. As of September 30, 2021, the Company received proceeds of approximately $5,456,000 from the Subscription Agreements with the remaining $744,000 proceeds received on October 5, 2021. As of September 30, 2021, 100,000 shares of the 1,000,000 Shares were issued with the remaining 900,000 Shares issued in early October 2021. As such, the Company’s issued and outstanding shares of Common Stock on its Consolidated Balance Sheets as of September 30, 2021 do not include the 900,000 Shares. The 900,000 Shares were recorded as stock subscriptions in the Company’s Consolidated Statement of Stockholder’s Equity at September 30, 2021 and will be reclassed to additional-paid-in capital in October 2021.


The Shares were offered and sold by the Company through a prospectus supplement pursuant to the Company’s “shelf” registration statement on Form S-3, which was previously filed with the Commission on May 13, 2019 and subsequently declared effective on May 22, 2019 (the “Registration Statement”).


Wellington Shields & Co., LLC (“Wellington”) served as the exclusive placement agent in connection with the Offering, pursuant to a placement agency agreement dated as of September 23, 2021 (the “Placement Agency Agreement”), between the Company and Wellington. The Company agreed to pay Wellington a cash fee of 6.00% of the aggregate gross proceeds in the Offering which totaled $372,000. The Company also agreed to reimburse Wellington for certain expenses in connection with the Offering in an aggregate amount not to exceed $50,000. After deducting total costs incurred directly in connection with the Offering of approximately $499,000, which were recorded as deduction to equity, net proceeds to the Company totaled approximately $5,701,000. As of September 30, 2021, approximately $22,000 of the $499,000 in incurred Offering costs were paid.



The Company plans to use the aggregate net proceeds from the Offering primarily for working capital and general corporate purposes, including for certain facility expansion and upgrades, with the use of such proceeds subject to changes, based on the judgment of management.