Annual report pursuant to Section 13 and 15(d)

COMMON STOCK SUBSCRIPTION AGREEMENT

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COMMON STOCK SUBSCRIPTION AGREEMENT
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
COMMON STOCK SUBSCRIPTION AGREEMENT

NOTE 7

COMMON STOCK SUBSCRIPTION AGREEMENT

 

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, an aggregate of 1,000,000 shares (the “Shares”) of our Common Stock, at a negotiated purchase price per share of $6.20 (the “Shares”), for aggregate gross proceeds to us of approximately $6,200,000. The offering price per share was negotiated based on the average closing price of our Common Stock as quoted on Nasdaq over the three-week period immediately preceding the date of the Subscription Agreements, less a five percent discount.

 

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 paid Wellington a cash fee of 6.00% of the aggregate gross proceeds in the Offering which totaled $372,000. The Company also reimbursed Wellington for certain expenses in connection with the Offering in an aggregate amount not to exceed $50,000. After deducting costs incurred directly in connection with the offering which were recorded as deduction to equity, net proceeds to the Company totaled approximately $5,704,000. As of December 31, 2021, approximately $435,000 of the $496,000 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.