XPLR Xplore Technologies Corp (delisted)

Filed Pursuant to Rule 424(b)(2)

Registration Statement No. 333-187198

 

PROSPECTUS SUPPLEMENT      
(to Prospectus dated March 27, 2013)

 

2,000,000 Shares

 

Xplore Technologies Corp.

Common Stock

 

We are offering 2,000,000 shares of our common stock, par value $0.001 per share, pursuant to this prospectus supplement and the accompanying prospectus.

 

The shares of our common stock are listed for trading on The NASDAQ Capital Market (“Nasdaq”) under the symbol “XPLR”. On March 3, 2015, the last reported sale price of our common stock on Nasdaq was $6.93 per share.

 

The aggregate market value of our outstanding common stock held by non-affiliates, or the public float, is approximately $47.6 million as of February 17, 2015, calculated in accordance with General Instruction I.B.6 of Form S-3. Pursuant to General Instruction I.B.6, in no event will we sell our common stock in a public primary offering with a value exceeding one-third of our public float in any 12-month period unless our public float subsequently rises to $75.0 million or more. We have not offered any securities pursuant to General Instruction I.B.6 during the 12 calendar months prior to and including the date of this prospectus supplement.

 

The offering is being underwritten on a firm commitment basis. We have granted the underwriter an option to buy up to an additional 300,000 shares of common stock to cover over-allotments. The underwriter may exercise this option at any time and from time to time during the 30-day period from the date of this prospectus supplement.

 

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		No Exercise of Over-Allotment								Full Exercise of Over-Allotment
		Per Share				Total				Per Share				Total
Public offering price		$	6.00			$	12,000,000			$	6.00			$	13,800,000
Underwriting discounts and commissions(1)		$	0.42			$	840,000			$	0.42			$	966,000
Proceeds, before expenses, to us		$	5.58			$	11,160,000			$	5.58			$	12,834,000

 

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(1)

In addition, we have agreed to reimburse the underwriter for certain expenses. See “Underwriting” on page S-12 of this prospectus supplement for additional information.

 

Investing in our common stock involves risks. Please read “Risk Factors” beginning on page S-4 of this prospectus supplement.

 

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.

 

The underwriter expects to deliver the shares on or about March 9, 2015.

 

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Roth Capital Partners

The date of this prospectus supplement is March 3, 2015.

 

 

TABLE OF CONTENTS

 

Prospectus Supplement

 

Page

ABOUT THIS PROSPECTUS SUPPLEMENT	S-i
FORWARD-LOOKING STATEMENTS	S-i
PROSPECTUS SUPPLEMENT SUMMARY	S-1
RISK FACTORS	S-4
USE OF PROCEEDS	S-6
DIVIDEND POLICY	S-6
PRICE RANGE OF COMMON STOCK	S-6
CAPITALIZATION	S-7
DILUTION	S-8
MATERIAL U.S. FEDERAL INCOME TAX AND ESTATE CONSEQUENCES TO NON-US HOLDERS	S-9
UNDERWRITING	S-12
EXPERTS	S-17
LEGAL MATTERS	S-17
WHERE YOU CAN FIND MORE INFORMATION	S-18

 

Prospectus

 

Page

ABOUT THIS PROSPECTUS	i
XPLORE TECHNOLOGIES CORP.	1
RISK FACTORS	3
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS	3
USE OF PROCEEDS	3
DESCRIPTION OF COMMON STOCK	4
PLAN OF DISTRIBUTION	6
LEGAL MATTERS	7
EXPERTS	7
WHERE YOU CAN FIND MORE INFORMATION	7
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	7

   

 

You should rely only on the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus and any free writing prospectus prepared by or on behalf of us or to which we have referred you. Neither we nor the underwriter have authorized anyone to provide you with different or additional information. We are not making an offer of these securities in any state or jurisdiction where the offer is not permitted. You should not assume that the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing prospectus is accurate as of any date other than the date on the front of this prospectus supplement, the date of the accompanying prospectus or the date of such free writing prospectus, as applicable.

 

 

ABOUT THIS PROSPECTUS SUPPLEMENT

 

This prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) utilizing a “shelf” registration process. This document contains two parts. The first part consists of this prospectus supplement, which provides you with specific information about the shares of our common stock that we are selling in this offering and about the offering itself. The second part is the accompanying prospectus, which provides more general information, some of which may not apply to this offering. If the description of this offering varies between this prospectus supplement and the accompanying prospectus or any related free writing prospectus, you should rely on the information contained in this prospectus supplement.

 

Both this prospectus supplement and the accompanying prospectus include or incorporate by reference important information about us, our common stock and other information you should know before investing in our common stock. Before purchasing any shares of our common stock, you should carefully read both this prospectus supplement and the accompanying prospectus, together with the additional information described under the heading “Where You Can Find More Information.”

 

You should not assume that the information contained in this prospectus supplement or the accompanying prospectus is accurate as of any date other than their respective dates, or that the information contained in any document incorporated by reference in this prospectus is accurate as of any date other than the date on which that document was filed with the SEC.

 

Neither we nor the underwriters are making an offer to sell the common stock in jurisdictions where the offer or sale is not permitted. The distribution of this prospectus supplement and the accompanying prospectus and the offer and sale of our common stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus supplement and the accompanying prospectus must inform themselves about and observe any restrictions relating to the offering of the common stock and the distribution of this prospectus supplement and the accompanying prospectus outside the United States. This prospectus supplement and the accompanying prospectus do not constitute an offer of, or an invitation to purchase, any shares of common stock in any jurisdiction in which such offer or invitation would be unlawful.

 

The terms “we,” “our,” “us,” the “Company” and “Xplore” refer to Xplore Technologies Corp., a Delaware corporation, and our wholly owned subsidiary unless the context suggests otherwise. The term “you” refers to a prospective investor.

 

FORWARD-LOOKING STATEMENTS

 

Certain matters contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus, excluding historical information, include forward-looking statements. Certain words, such as “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “seek” and similar words and expressions identify forward-looking statements that involve uncertainties and risks. Future developments may not be in accordance with our current expectations or beliefs and the effect of future developments may not be those anticipated. Among the factors that may cause results to differ materially from those contemplated in any forward-looking statement are:

 

●     successful execution of our business strategy, particularly for new endeavors;

●     the performance of our targeted markets;

●     competitive product and pricing pressures;

●     changes in business relationships with our major customers;

●     changes in the market acceptance of our products;

●     changes in the supply of key components or finished products;

●     economic and market conditions;

●     the other risks and uncertainties that are described under “Risk Factors” and elsewhere in this prospectus supplement and from time to time in our filings with the SEC.

 

 

Readers are urged to consider the risks, uncertainties, and other factors that could affect our business as described in this prospectus supplement and the accompanying prospectus and the information incorporated by reference therein. All forward-looking statements made or incorporated by reference in this prospectus supplement and the accompanying prospectus rely upon the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. We do not, by including this statement, assume any obligation to review or revise any particular forward-looking statement in light of future events.

 

 

RISK FACTORS

 

An investment in our common securities involves a high degree of risk and uncertainty.  You should carefully consider the risks described below and in the Section entitled “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014 and in our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2014, September 31, 2014 and December 31, 2014, which are incorporated herein by reference, any amendments or updates thereto in subsequent filings with the SEC, and any other documents that we file with the SEC that also are incorporated herein by reference.  The risks described therein are not the only ones facing our company.  Additional risks not presently known to us or that we presently consider immaterial may also adversely affect our company.  If any of the risks described occur, our business, financial condition, results of operations and prospects could be materially adversely affected.  In that case, the trading price of our common stock could decline, and you could lose all or part or your investment.

 

Risks relating to the Offering

 

We will have broad discretion in how we use the proceeds from this offering, and we may not use the proceeds effectively.

 

We intend to use the net proceeds from this offering for general corporate purposes, including, product expansion, general and administrative, manufacturing, sales and marketing expenses, and for potential acquisitions of products and/or companies that complement our business. Our management will have broad discretion in the application of the proceeds from this offering and could spend the proceeds in ways that do not necessarily improve our operating results or enhance the value of our common stock. Our failure to use these funds effectively could have a material adverse effect on our business.

 

Investors in this offering will suffer immediate and substantial dilution in the net tangible book value per share of our common stock.

 

Because the price per share in this offering is substantially higher than the net tangible book value per share of common stock, investors in this offering will suffer immediate and substantial dilution in the net tangible book value per share of our common stock. Based on a public offering price of $6.00 per share and our net tangible book value as of December 31, 2014, if you purchase securities in this offering, you will suffer immediate and substantial dilution of approximately $3.40 per share in the net tangible book value of our common stock. See “Dilution” on page S-8 for a more detailed discussion of the dilution you will incur in connection with this offering.

 

You may experience future dilution as a result of future equity offerings or other equity issuances.

 

We may in the future issue additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure you that we will be able to sell shares or other securities in any other offering or other transactions at a price per share that is equal to or greater than the price per share paid by investors in this offering. The price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share in this offering.

 

In addition, we have a significant number of stock options outstanding and expect to grant additional stock options under our stock incentive plan in the future. To the extent such stock options are exercised, investors purchasing our common stock in this offering would experience further dilution.

 

 

Our stock price may fluctuate in the future, and you could lose all or a substantial part of your investment.

 

The trading price of our common stock may fluctuate significantly in response to a number of factors, many of which we cannot control. Such fluctuations could cause you to lose most or all of your investment in our common stock. Among the factors that could cause material fluctuations in the market price for our common stock are:

 

●

the success or failure of the development and testing of our products within acceptable timeframes;

 

●

changes in the supply of finished products we receive from our key manufacturers;

 

●

changes in the selling price of our products;

 

●

additions or departures of key personnel;

 

●

our financial condition, performance and prospects;

 

●

the depth and liquidity of the market for our common stock;

 

●

sales of large blocks of our common stock by officers, directors or significant stockholders;

 

●

investor perception of us and the industry in which we operate;

 

●

changes in securities analysts’ estimates of our financial performance or product development timelines;

 

●

general financial and other market conditions and trading volumes of similar companies; and

 

●

domestic and international economic conditions.

 

We could be the target of securities class action litigation following periods of volatility in the market price of its securities. Securities litigation could cause us to incur substantial costs, divert management’s attention and resources, harm our reputation in the industry and the securities markets and negatively impact our operating results.

 

We do not intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

 

We have never declared or paid any cash dividend on our common stock and do not currently intend to do so in the foreseeable future. Under the terms of our credit facility, we are restricted from paying dividends on our common stock. Therefore, the success of an investment in shares of our common stock will depend upon any future appreciation in their value. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which you purchased them.

 

 

 

USE OF PROCEEDS

 

We estimate that we will receive net proceeds of approximately $10.8 million from the sale of our common stock in this offering after deducting the underwriting discounts and commissions and estimated offering expenses. We estimate that we will receive net proceeds of approximately $12.5 million if the underwriter exercises in full its option to purchase up to additional shares of common stock.

 

We intend to use the net proceeds from this offering for general corporate purposes, including product expansion, general and administrative, manufacturing, sales and marketing expenses, and for potential acquisitions of products and/or companies that complement our business.

 

DIVIDEND POLICY

 

We have never declared or paid cash dividends on our common stock. We currently intend to retain future earnings to finance the future development and expansion of our business. Under our credit facility, we are currently restricted from paying cash dividends on our common stock. Any future determinations about the payment of cash dividends will be made at the discretion of our board of directors and will depend upon our earnings, capital requirements, operating and financial condition, legal restrictions and such other factors as the board of directors deems relevant.

 

PRICE RANGE OF COMMON STOCK

 

Our common stock is listed on Nasdaq under the symbol “XPLR”. The following table sets forth on a per share basis the high and low sales prices for consolidated trading in our common stock as reported on Nasdaq for the quarters indicated.

 

		High				Low
Fiscal Year Ended March 31, 2013
Pre-Reverse Stock Split Period
First Quarter		$	0.06			$	0.03
Second Quarter (through September 12, 2012)			0.04				0.01
Post-Reverse Stock Split Period
Second Quarter (from September 13, 2012)			7.50				5.00
Third Quarter			8.00				3.30
Fourth Quarter			5.50				3.23
Fiscal Year March 31, 2014
First Quarter			4.13				3.05
Second Quarter			4.69				3.36
Third Quarter			6.88				3.87
Fourth Quarter			7.40				5.50
Fiscal Year March 31, 2015
First Quarter			6.41				5.15
Second Quarter			6.25				4.41
Third Quarter			6.89				4.34
Fourth Quarter (through March 3, 2015)			7.75				6.03

 

 The closing price of our common stock on March 3, 2015 was $6.93. We estimate that there were approximately 184 holders of record of our common stock as of March 3, 2015.

 

 

CAPITALIZATION

 

The following table sets forth our historical consolidated cash and cash equivalents and capitalization as of December 31, 2014:

 

●

on an actual basis; and

 

●

on an as-adjusted basis, after giving effect to the issuance and sale of our common stock offered hereby (assuming no exercise of the underwriter’s option to purchase additional shares and deducting underwriter’s discount and estimated offering expenses).

 

The historical data in the table are derived from, and should be read in conjunction with, our historical financial statements, including accompanying notes, incorporated by reference in this prospectus supplement. You should also read this table in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our consolidated financial statements and the related notes thereto from our Annual Report on Form 10-K for the year ended March 31, 2014 and our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2014, September 30, 2014 and December 31, 2014. See “Where You Can Find More Information” in this prospectus supplement.

 

		As of December 31, 2014
		Actual				As Adjusted
		(in thousands)
Cash and Equivalents		$	3,364			$	14,159
Short-term Debt			–				–
Long-term Debt			–				–
Total Debt			–				–
Common Stock Equity			8				10
Additional Paid in Capital			155,633				166,426
Accumulated Deficit Loss			(139,165	)			(139,165	)
Total Capitalization		$	16,476			$	27,271

 

The information above assumes that the underwriter does not exercise its over-allotment option and excludes the following:

 

●

1,377,441 shares issuable upon the exercise of outstanding stock options under the Company’s stock incentive plans at a weighted average exercise price of $6.40 per share as of March 3, 2015, and

 

●

123,750 shares issuable upon the exercise of outstanding warrants at a weighted average exercise price of $6.44 per share as of March 3, 2015.

 

 

DILUTION

 

If you invest in our common stock, your interest will be immediately diluted to the extent of the difference between the public offering price per share of our common stock and the net tangible book value per share of our common stock immediately after the completion of this offering. Dilution results from the fact that the per share offering price of our common stock is substantially in excess of the book value per share attributable to the existing stockholders for our presently outstanding stock.

 

As of December 31, 2014, our net tangible book value was approximately $16.5 million, or approximately $1.94 per share. Net tangible book value per share represents the amount of total tangible assets less our total liabilities divided by the number of shares outstanding. After giving effect to the sale of the 2,000,000 shares of common stock offered by us in this offering at the public offering price of $6.00 per share, after deducting underwriting discounts and estimated offering expenses payable by us, our as adjusted net tangible book value as of December 31, 2014 would have been approximately $27.3 million, or $2.60 per share. This represents an immediate increase in pro forma net tangible book value from this offering of $0.66 per share to our existing stockholders and an immediate dilution of $3.40 per share to new investors purchasing common stock in this offering.

 

The following table illustrates this dilution to new investors on a per share basis, assuming the underwriter does not exercise its over-allotment option:

 

Public offering price per share						$	6.00
Historical net tangible book value per share as of December 31, 2014		$	1.94
Increase per share attributable to this offering		$	0.66
Pro forma net tangible book value per share after this offering							2.60
Dilution in net tangible book value per share to new investors						$	3.40

 

If the underwriter exercises its over-allotment option in full, the pro forma as adjusted net tangible book value will increase to $2.69 per share, representing an immediate increase to existing stockholders of $0.75 per share and an immediate dilution of $3.31 per share to new investors.

 

In the discussion and table above, we assume no exercise of outstanding options. The above discussion and tables are based on 8,479,254 shares of common stock outstanding on December 31, 2014, and excludes:

 

●

1,377,441 shares issuable upon the exercise of outstanding stock options under the Company’s stock incentive plans at a weighted average exercise price of $6.40 per share as of March 3, 2015, and

 

●

123,750 shares issuable upon the exercise of outstanding warrants at a weighted average exercise price of $6.44 per share as of March 3, 2015.

 

To the extent that any of these options or warrants are exercised, there will be further dilution per share to new investors purchasing shares of our common stock in this offering.

 

 

MATERIAL U.S. FEDERAL INCOME TAX AND ESTATE CONSEQUENCES TO NON-US HOLDERS

 

The following summary describes the material U.S. federal income and estate tax consequences of the acquisition, ownership and disposition of our common stock acquired in this offering by Non-U.S. Holders (as defined below). This discussion does not address all aspects of U.S. federal income and estate taxes and does not deal with foreign, state and local consequences that may be relevant to Non-U.S. Holders in light of their particular circumstances, nor does it address U.S. federal tax consequences other than income and estate taxes. Special rules different from those described below may apply to certain Non-U.S. Holders that are subject to special treatment under the Internal Revenue Code of 1986, as amended, or the Code, such as financial institutions, insurance companies, tax-exempt organizations, broker-dealers and traders in securities, U.S. expatriates, “controlled foreign corporations,” “passive foreign investment companies,” corporations that accumulate earnings to avoid U.S. federal income tax, persons that hold our common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or integrated investment or other risk reduction strategy, persons subject to the alternative minimum tax or Medicare contribution tax, partnerships and other pass-through entities, and investors in such pass-through entities. Such Non-U.S. Holders are urged to consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them. Furthermore, the discussion below is based upon the provisions of the Code, and Treasury regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified, perhaps retroactively, so as to result in U.S. federal income and estate tax consequences different from those discussed below. We have not requested a ruling from the U.S. Internal Revenue Service, or IRS, with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions. This discussion assumes that the Non-U.S. Holder holds our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment).

 

Persons considering the purchase of our common stock pursuant to this offering should consult their own tax advisors concerning the U.S. federal income and estate tax consequences of the acquisition, ownership and disposition of our common stock in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction, including any state, local or foreign tax consequences.

 

For the purposes of this discussion, a “Non-U.S. Holder” is, for U.S. federal income tax purposes, a beneficial owner of common stock that is neither a U.S. Holder, nor a partnership (or other entity treated as a partnership for U.S. federal income tax purposes regardless of its place of organization or formation). A “U.S. Holder” means a beneficial owner of our common stock that is for U.S. federal income tax purposes (a) an individual who is a citizen or resident of the United States, (b) a corporation or other entity treated as a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (d) a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

 

Distributions

 

Subject to the discussion below, distributions, if any, made on our common stock to a Non-U.S. Holder of our common stock to the extent made out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles) generally will constitute dividends for U.S. tax purposes and will be subject to withholding tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. To obtain a reduced rate of withholding under a treaty, a Non-U.S. Holder generally will be required to provide us or our paying agent with a properly executed IRS Form W-8BEN (in the case of an individual), IRS Form W-8BEN-E (in the case of an entity), or other appropriate form, certifying the Non-U.S. Holder’s entitlement to benefits under that treaty. In the case of a Non-U.S. Holder that is an entity, Treasury Regulations and the relevant tax treaty provide rules to determine whether, for purposes of determining the applicability of a tax treaty, dividends will be treated as paid to the entity or to those holding an interest in that entity. If a Non-U.S. Holder holds stock through a financial institution or other agent acting on the holder’s behalf, the holder will be required to provide appropriate documentation to such agent. The holder’s agent will then be required to provide certification to us or our paying agent, either directly or through other intermediaries. If you are eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty, you may be able to obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the IRS.

 

 

We generally are not required to withhold tax on dividends paid to a Non-U.S. Holder that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment that such holder maintains in the United States) if a properly executed IRS Form W-8ECI, stating that the dividends are so connected, is furnished to us or our paying agent (or, if stock is held through a financial institution or other agent, to such agent). In general, such effectively connected dividends will be subject to U.S. federal income tax, on a net income basis at the regular graduated rates. A corporate Non-U.S. Holder receiving effectively connected dividends may also be subject to a “branch profits tax,” which is imposed, under certain circumstances, at a rate of 30% (or such lower rate as may be specified by an applicable treaty) on the corporate Non-U.S. Holder’s effectively connected earnings and profits, subject to certain adjustments. To the extent distributions on our common stock, if any, exceed our current and accumulated earnings and profits, they will first reduce the Non-U.S. Holder’s adjusted basis in our common stock, but not below zero, and then will be treated as gain to the extent of any excess, and taxed in the same manner as gain realized from a sale or other disposition of common stock as described in the next section.

 

Non-U.S. Holders may be required to periodically update their IRS Form W-8.

 

Gain on Disposition of our Common Stock

 

Subject to the discussion below regarding backup withholding and foreign accounts, a Non-U.S. Holder generally will not be subject to U.S. federal income tax with respect to gain realized on a sale or other disposition of our common stock unless (a) the gain is effectively connected with a trade or business of such holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment that such holder maintains in the United States), (b) the Non-U.S. Holder is a nonresident alien individual and is present in the U.S. for 183 or more days in the taxable year of the disposition and certain other conditions are met or (c) we are or have been a “U.S. real property holding corporation” within the meaning of Code Section 897(c)(2) at any time within the shorter of the five-year period preceding such disposition or such holder’s holding period. In general, we would be a U.S. real property holding corporation if interests in U.S. real estate comprised (by fair market value) at least half of our business assets. We believe that we are not, and do not anticipate becoming, a U.S. real property holding corporation. Even if we are treated as a U.S. real property holding corporation, gain realized by a Non-U.S. Holder on a disposition of our common stock will not be subject to U.S. federal income tax so long as (1) the Non-U.S. Holder owned, directly, indirectly and constructively, no more than five percent of our common stock at all times within the shorter of (i) the five-year period preceding the disposition or (ii) the holder’s holding period and (2) our common stock is regularly traded on an established securities market. There can be no assurance that our common stock will qualify or will continue to qualify as regularly traded on an established securities market.

 

If you are a Non-U.S. Holder described in (a) above, you will be required to pay tax on the net gain derived from the sale at regular graduated U.S. federal income tax rates, and corporate Non-U.S. Holders described in (a) above may also be subject to a branch profits tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. If you are an individual Non-U.S. Holder described in (b) above, you will be required to pay a flat 30% tax on the gain derived from the sale, which gain may be offset by U.S. source capital losses (even though you are not considered a resident of the United States).

 

Information Reporting Requirements and Backup Withholding

 

Generally, we must report information to the IRS with respect to any distributions we make on our common stock (whether or not the distribution represents a taxable dividend income) including the amount of any dividends, the name and address of the recipient, and the amount of any tax withheld. A similar report is sent to the holder to whom any such dividends are paid. Pursuant to tax treaties or certain other agreements, the IRS may make its reports available to tax authorities in the recipient’s country of residence.

 

Dividends paid by us (or our paying agents) to a Non-U.S. Holder may also be subject to U.S. backup withholding. U.S. backup withholding generally will not apply to a Non-U.S. Holder who provides a properly executed IRS Form W-8BEN, IRS Form W-8BEN-E or otherwise establishes an exemption.

 

 

Under current U.S. federal income tax law, U.S. information reporting and backup withholding requirements generally will apply to the proceeds of a disposition of our common stock effected by or through a U.S. office of any broker, U.S. or foreign, except that information reporting and such requirements may be avoided if the holder provides a properly executed IRS Form W-8BEN, IRS Form W-8BEN-E or otherwise meets documentary evidence requirements for establishing Non-U.S. Holder status or otherwise establishes an exemption. Generally, U.S. information reporting and backup withholding requirements will not apply to a payment of disposition proceeds to a Non-U.S. Holder where the transaction is effected outside the United States through a non-U.S. office of a non-U.S. broker provided, however, that no office of the same broker within the U.S. negotiated the sale or received instructions with respect to the sale from the payee. Information reporting and backup withholding requirements may, however, apply to a payment of disposition proceeds if the broker has actual knowledge, or reason to know, that the holder is, in fact, a U.S. person. For information reporting purposes, certain brokers with substantial U.S. ownership or operations will generally be treated in a manner similar to U.S. brokers.

 

Any amounts of tax withheld under the backup withholding rules may be credited against the tax liability of persons subject to backup withholding, provided that the required information is timely furnished to the IRS.

 

Foreign Accounts

 

A U.S. federal withholding tax of 30% may apply on dividends on and the gross proceeds of a disposition of our common stock paid to a foreign financial institution (as specifically defined by applicable rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain equity holders of such institution, as well as certain account holders that are foreign entities with U.S. owners). This U.S. federal withholding tax of 30% will also apply on dividends on and the gross proceeds of a disposition of our common stock paid to a non-financial foreign entity unless such entity provides the withholding agent with either a certification that it does not have any substantial direct or indirect U.S. owners or provides information regarding substantial direct and indirect U.S. owners of the entity. The withholding tax described above will not apply if the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from the rules. Under certain circumstances, a Non-U.S. Holder might be eligible for refunds or credits of such taxes. Holders are encouraged to consult with their own tax advisors regarding the possible implications of these rules for their investment in our common stock.

 

The withholding provisions described above will generally apply to payments of dividends made on or after July 1, 2014 and to payments of gross proceeds from a sale or other disposition of common stock on or after January 1, 2017.

 

Federal Estate Tax

 

An individual who is not a citizen of the United States and is also a nonresident (as specially defined for estate tax purposes) who is treated as the owner of, or has made certain lifetime transfers of, an interest in our common stock will be required to include the value thereof in his or her gross estate for U.S. federal estate tax purposes, and may be subject to U.S. federal estate tax unless an applicable estate tax treaty provides otherwise, even though such individual was not a citizen or resident of the United States at the time of his or her death.

 

EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAW.

 

 

UNDERWRITING

 

General

 

We have entered into an underwriting agreement with the underwriter listed in the table below. We refer to the underwriter listed in the table below as the “underwriter.” Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriter, and the underwriter has agreed to purchase from us, shares of our common stock. Our common stock is traded on Nasdaq under the symbol “XPLR.”

 

Pursuant to the terms and subject to the conditions contained in the underwriting agreement, we have agreed to sell to the underwriter named below, and the underwriter has agreed to purchase from us, the number of shares of common stock set forth opposite its name below:

 

 

 

Underwriter		Number of Shares
Roth Capital Partners, LLC			2,000,000

 

The underwriting agreement provides that the obligation of the underwriter to purchase the shares of common stock offered by this prospectus supplement and the accompanying prospectus is subject to certain conditions. The underwriter is obligated to purchase all of the shares of common stock offered hereby if any of the shares are purchased. However, the underwriter is not required to take or pay for the shares covered by the underwriter’s over-allotment option described below.

 

We have granted to the underwriter an option to buy up to an additional 300,000 shares of common stock from us at the public offering price, less the underwriting discounts and commissions, to cover over-allotments, if any. The underwriter may exercise this option at any time, in whole or in part, during the 30-day period after the date of this prospectus supplement.

 

We estimate that our total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $365,000.

 

Discounts, Commissions and Expenses

 

The underwriter proposes to offer the shares of common stock purchased pursuant to the underwriting agreement to the public at the public offering price set forth on the cover page of this prospectus supplement and to certain dealers at that price less a concession not in excess of $0.21 per share. After the public offering of the shares, the offering price and other selling terms may be changed by the underwriter.

 

In connection with the sale of the common stock to be purchased by the underwriter, the underwriter will be deemed to have received compensation in the form of underwriting commissions and discounts. The underwriter’s commissions and discounts will be 7% of the gross proceeds of this offering, or $0.42 per share of common stock, based on the public offering price per share set forth on the cover page of this prospectus supplement.

 

We have also agreed to reimburse the underwriter at closing for reasonable out-of-pocket expenses incurred by them in connection with the offering up to a maximum of $100,000.

 

 

The following table shows the underwriting discounts and commissions payable to the underwriter by us on a per share and aggregate basis in connection with this offering (assuming both the exercise and non-exercise of the over-allotment option to purchase additional shares of common stock):

 

		Per Share				Total with no Over-Allotment				Total with Over-Allotment
Underwriting discounts and commissions to be paid by Xplore		$	0.42			$	840,000			$	966,000

 

Indemnification

 

Pursuant to the underwriting agreement, we have agreed to indemnify the underwriter against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the underwriter or such other indemnified parties may be required to make in respect of those liabilities.

 

Lock-Up Agreements

 

We and each of our officers and directors have agreed to a 90-day “lock-up” with respect to 2,383,944 shares of common stock and other of our securities that they beneficially own, including securities that are convertible into shares of common stock and securities that are exchangeable or exercisable for any of our equity securities. This means that, subject to certain exceptions, without the prior written consent of the underwriter, we, our officers and directors, may not offer, sell, contract to sell, pledge, purchase or otherwise, transfer or dispose of, directly or indirectly any shares of common stock or any securities convertible into or exchangeable for our common stock, subject to certain exceptions, without the prior written consent of the underwriter, for a period of 90 days following the date of this prospectus supplement.

 

The restrictions described in the preceding paragraph do not apply to:

 

●

the sale by us of shares to the underwriter in connection with the offering;

 

●

the issuance by us of common stock upon the exercise of options or warrants disclosed as outstanding in the registration statement of which this prospectus supplement and the accompanying prospectus forms a part (excluding exhibits thereto) or the final prospectus supplement or the vesting of the restricted stock awards or units or the issuance of common stock pursuant to our employee stock purchase plan;

 

●

the issuance by us of employee stock options not exercisable during the 90-day lock-up period and the grant, redemption or forfeiture of restricted stock awards or restricted stock units pursuant to equity incentive plans described in the registration statement of which this prospectus supplement and the accompanying prospectus forms a part (excluding exhibits thereto) and the final prospectus; or

 

●

the issuance by us of common stock or warrants to purchase common stock, in an amount not to exceed 10.0% of the total number of shares of common stock outstanding on the date hereof, in connection with mergers or acquisitions of securities, businesses, property or other assets, joint ventures, strategic alliances, equipment leasing arrangements or debt financing.

 

The applicable lock-up period may be extended if (1) during the last 17 days of the applicable lock-up period, we issue an earnings release or material news or a material event relating to us occurs or (2) prior to the expiration of the applicable lock-up period, we announce that we will release earnings results during the 16-day period beginning on the last day of the applicable lock-up period. In such event, such extension will be for 18 days, beginning on the issuance of the earnings release or the occurrence of the material news or material event. The underwriter may, in its sole discretion and at any time or from time to time before the termination of the lock-up period, without notice, release all or any portion of the securities subject to lock-up agreements.

 

Electronic Distribution

 

This prospectus supplement and the accompanying prospectus may be made available in electronic format on websites or through other online services maintained by the underwriter or by its affiliates. In those cases, prospective investors may view offering terms online and prospective investors may be allowed to place orders online. Other than this prospectus supplement and the accompanying prospectus in electronic format, the information on the underwriter’s websites or our website and any information contained in any other websites maintained by the underwriter or by us is not part of this prospectus supplement, the accompanying prospectus or the registration statement of which this prospectus supplement and the accompanying prospectus forms a part, has not been approved and/or endorsed by us or the underwriter in its capacity as underwriter, and should not be relied upon by investors.

 

 

Price Stabilization, Short Positions and Penalty Bids

 

In connection with the offering the underwriter may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”):

 

●

Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

 

●

Over-allotment involves sales by the underwriter of shares in excess of the number of shares the underwriter is obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriter is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriter may close out any covered short position by either exercising its over-allotment option and/or purchasing shares in the open market.

 

●

Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriter will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. This position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

 

●

Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

 

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. These transactions may be discontinued at any time.

 

Neither we nor the underwriter make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our shares of common stock. In addition, neither we nor the underwriter make any representation that the underwriter will engage in these transactions or that any transaction, if commenced, will not be discontinued without notice.

 

 

Selling Restrictions

 

European Economic Area

 

This prospectus supplement and the accompanying prospectus does not constitute an approved prospectus under Directive 2003/71/EC and no such prospectus is intended to be prepared and approved in connection with this offering. Accordingly, in relation to each Member State of the European Economic Area which has implemented Directive 2003/71/EC (each, a "Relevant Member State") an offer to the public of any shares of common stock which are the subject of the offering contemplated by this prospectus supplement and the accompanying prospectus may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State of any shares of common stock may be made at any time under the following exemptions under the Prospectus Directive, if and to the extent that they have been implemented in that Relevant Member State:

 

(a)

to any legal entity which is a qualified investor as defined in the Prospectus Directive;

 

(b)

to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the underwriter for any such offer; or

 

(c)

in any other circumstances which do not require any person to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

 

For the purposes of this provision, the expression an "offer to the public" in relation to any shares of common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of common stock to be offered so as to enable an investor to decide to purchase any shares of common stock, as the expression may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (and any amendments thereto including the 2010 PD Amending Directive to the extent implemented in each Relevant Member State) and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

 

Switzerland

 

The shares will not be offered, directly or indirectly, to the public in Switzerland and this prospectus does not constitute a public offering prospectus as that term is understood pursuant to article 652a or 1156 of the Swiss Federal Code of Obligations.

 

United Kingdom

 

This prospectus supplement and the accompanying prospectus are not an approved prospectus for purposes of the UK Prospectus Rules, as implemented under the EU Prospectus Directive (2003/71/EC), and have not been approved under section 21 of the Financial Services and Markets Act 2000 (as amended) (the “FSMA”) by a person authorized under FSMA. The financial promotions contained in this prospectus supplement and the accompanying prospectus are directed at, and this prospectus supplement and the accompanying prospectus are only being distributed to, (1) persons who receive this prospectus supplement and the accompanying prospectus outside of the United Kingdom, and (2) persons in the United Kingdom who fall within the exemptions under articles 19 (investment professionals) and 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons together being referred to as "Relevant Persons"). This prospectus supplement and the accompanying prospectus must not be acted upon or relied upon by any person who is not a Relevant Person. Any investment or investment activity to which this prospectus supplement and the accompanying prospectus relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. This prospectus supplement and the accompanying prospectus and their contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person that is not a Relevant Person.

 

 

The underwriter has advised that:

 

(a)

it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA in connection with the issue or sale of any of the shares of common stock in circumstances in which section 21(1) of the FSMA does not apply to the issuer; and

 

(b)

it has complied with and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares of common stock in, from or otherwise involving the United Kingdom.

 

Conflicts of Interest

 

The underwriter and its affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of its business, for which it has received and may continue to receive customary fees and commissions. In addition, from time to time, the underwriter and its affiliates may effect transactions for its own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

 

 

EXPERTS

 

The consolidated balance sheets and related consolidated statements of income and operations, stockholders’ equity and cash flows incorporated in this prospectus supplement by reference from our Annual Report on Form 10-K for the year ended March 31, 2014 have been audited by PMB Helin Donovan, LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

 

LEGAL MATTERS

 

The validity of the shares of common stock offered hereby will be passed upon for us by Pillsbury Winthrop Shaw Pittman LLP, New York, New York. Certain legal matters in connection with this offering will be passed upon for the underwriter by Goodwin Procter LLP.

 

 

WHERE YOU CAN FIND MORE INFORMATION

 

Available Information

 

We file annual, quarterly and current reports, and other information with the SEC. These SEC filings are available over the Internet at the SEC’s web site at “http://www.sec.gov” or on our own website at “http://www.thelacledegroup.com.” Information contained on our website does not constitute part of this prospectus. You may also read and copy any document we file at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the Public Reference Room.

 

Incorporation by Reference

 

The SEC allows us to “incorporate by reference” into this prospectus supplement the information we file with the SEC, which means we can disclose important information by referring you to those documents. The information we incorporate by reference is an important part of this prospectus supplement and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below:

 

●

Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed on June 25, 2014.

 

●

Quarterly Reports on Form 10-Q for the quarters ended June 30, 2014, filed on August 12, 2014, September 30, 2014, filed on November 13, 2014, and December 31, 2014, filed on February 12, 2015.

 

●

Current Report on Form 8-K, dated September 16, 2014, filed on September 18, 2014.

 

Additional documents that we file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, between the date of this prospectus supplement and the termination of this offering, are also incorporated herein by reference. These documents contain important information about us and our finances. We are not, however, incorporating, in each case, any documents or information that we are deemed to furnish and not file in accordance with SEC rules.

 

You may request a copy of these filings at no cost by writing or telephoning us at the following address:

 

Xplore Technologies Corp.

Attn: Investor Relations

14000 Summit Drive, Suite 900

Austin, Texas 78728

(512) 336-7797

 

 

 

 

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2,000,000 Shares

 

 

 

 

Common Stock

$6.00 Per Share

 

 

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PROSPECTUS SUPPLEMENT

 

March 3, 2015

 

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Roth Capital Partners

 

 

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