Filed
Pursuant to Rule 424(b)(5)
Registration No. 333-203691
PROSPECTUS
SUPPLEMENT
(to
Prospectus dated July 10, 2015)
3,000
units, with each unit consisting of one share of Series A-1 Preferred Stock and a Warrant to purchase eight hundred thirty three
and one/third shares of Common Stock
We
are offering up to 3,000 shares of our Series A-1 Convertible Preferred Stock, par value $0.001 per share (“
Series A-1
Preferred Stock
”) and Series A-1 Warrants (“
Warrants
”) to purchase up to 2,500,000 shares of our
common stock, par value $0.001 per share (“
Common Stock
”). This prospectus covers the shares of common stock
issuable from time to time upon conversion of the Series A-1 Preferred Stock and the exercise of these Warrants.
The
shares of Series A-1 Preferred Stock are convertible
into one share of Common Stock at a conversion price of $1.50 per share, subject to adjustment discussed herein. The warrants
are exercisable after the six-month anniversary of the original date of issuance (the “
Initial Exercisability Date
”)
and ending at 11:59 p.m. on the fifth anniversary of the Initial Exercisability Date (the “
Expiration Date
”).
This offering (the “
Offering
”) shall close (the “
Closing
”) upon the sale of 3,000 units
at a maximum total sales price of $3,000,000, with each unit consisting of one share of Series A-1 Preferred Stock sold together
with a Warrant to purchase eight hundred thirty three and one/third shares of Common Stock at an exercise price of $1.50 per share
of Common Stock, subject to adjustment of the Warrant exercise price as provided herein.
Our
Common Stock is listed on The Nasdaq Capital Market under the symbol “UNXL.” On January 17, 2017, the last
reported sale price of our Common Stock on The Nasdaq Capital Market was $1.26 per share. There is no established public
trading market for the Series A-1 Preferred Stock or the Warrants, and we do not expect any such market to develop. In addition,
we do not intend to apply for listing of the Series A-1 Preferred Stock or the Warrants on any national securities exchange or
other nationally recognized trading system.
We
have retained The Benchmark Company, LLC to act as the sole placement agent in connection with this Offering. The placement agent
has no obligation to buy any of the units from us or to arrange for the purchase or sale of any specific number or dollar amount
of units. We have agreed to pay the placement agent the placement agent fees set forth in the table below, which assumes that
we sell all of the units we are offering. See “Plan of Distribution” beginning on page S-26 of this prospectus supplement
for more information regarding these arrangements.
Investing
in our Series A-1 Preferred Stock, Warrants, and Common Stock involves a high degree of risk. Please read “
Risk Factors
”
beginning on page S-5
of this prospectus supplement and page 8 in the accompanying prospectus, and in the documents incorporated
by reference into this prospectus supplement.
|
|
Per Unit of
Series A-1
Preferred
Stock and Warrants
|
|
|
Placement
Agent’s
Fee(1)
|
|
|
Proceeds to
us before
expenses(2)
|
|
Public offering price
|
|
$
|
1.50
|
|
|
$
|
0.0675
|
|
|
$
|
1.4325
|
|
Total
|
|
$
|
3,000,000
|
|
|
$
|
135,000
|
|
|
$
|
2,865,000
|
|
(1)
|
The
fees payable to the placement agents represent 4.5% of the gross proceeds for units sold in the Offering.
|
|
|
(2)
|
The
amount of the Offering proceeds to us presented in this table does not give effect to any exercise of the Warrants being issued
in this Offering.
|
Delivery of the shares of Series A-1 Preferred
Stock and Warrants issued at the Closing is expected to be made on or about January 20, 2017.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
Sole
Placement Agent
The
Benchmark Company, LLC
The date of this prospectus supplement is January
17, 2017.
Table
of Contents
TABLE
OF CONTENTS
We
have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus
supplement, the accompanying prospectus and in any free writing prospectus prepared by or on behalf of us or to which we have
referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that
others may give you. We are not, and the Placement Agent is not, making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement, the
accompanying prospectus, the documents incorporated by reference in this prospectus supplement and the accompanying prospectus,
and in any free writing prospectus that we have authorized for use in connection with this Offering, is accurate only as of the
date of those respective documents. Our business, financial condition, results of operations and prospects may have changed since
those dates. You should read this prospectus supplement, the accompanying prospectus, the documents incorporated by reference
in this prospectus supplement and the accompanying prospectus, and any free writing prospectus that we have authorized for use
in connection with this Offering, in their entirety before making an investment decision. You should also read and consider the
information in the documents to which we have referred you in the sections of this prospectus supplement entitled “Where
You Can Find More Information” and “Information Incorporated by Reference.”
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
document is part of the registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a
“shelf” registration process and consists of two parts. The first part is this prospectus supplement, which describes
the terms of this offering. The second part, the accompanying prospectus dated July 10, 2015, including the documents incorporated
by reference therein, provides more general information, some of which may not apply to this offering. Generally, when we refer
only to the “prospectus,” we are referring to both parts combined. This prospectus supplement may add to, update or
change information in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement
or the accompanying prospectus.
If
information in this prospectus supplement is inconsistent with the accompanying prospectus or with any document incorporated by
reference that was filed with the SEC before the date of this prospectus supplement, you should rely on this prospectus supplement.
This prospectus supplement, the accompanying prospectus and the documents incorporated into each by reference include important
information about us, the securities being offered and other information you should know before investing in our securities. If
any statement in one of these documents is inconsistent with a statement in another document having a later date—for example,
a document incorporated by reference in the accompanying prospectus—the statement in the document having the later date
modifies or supersedes the earlier statement.
You
should also read and consider information in the documents we have referred you to in the section of this prospectus supplement
and the accompanying prospectus entitled “Incorporation by Reference,” and “Where You Can Find Additional Information”
as well as any free writing prospectus provided in connection with this offering.
We
have not authorized anyone to provide you with information that is in addition to or different from that contained or incorporated
by reference in this prospectus supplement, the accompanying prospectus, and any free writing prospectus provided in connection
with this offering. If anyone provides you with different or inconsistent information, you should not rely on it. We are not offering
to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information
contained or incorporated by reference in this prospectus supplement, the accompanying prospectus, or any free writing prospectus
provided in connection with this offering is accurate as of any date other than as of the date of this prospectus supplement,
the accompanying prospectus, or such free writing prospectus, as the case may be, or in the case of the documents incorporated
by reference, the date of such documents regardless of the time of delivery of this prospectus supplement and the accompanying
prospectus or any sale of our securities. Our business, financial condition, liquidity, results of operations and prospects may
have changed since those dates.
All
references in this prospectus supplement or the accompanying prospectus to “UniPixel,” the “Company,”
“we,” “us,” or “our” mean Uni-Pixel, Inc. and our subsidiaries, unless we state otherwise
or the context otherwise requires.
This
prospectus supplement, the accompanying prospectus and the information incorporated herein and thereby by reference include trademarks,
servicemarks and tradenames owned by us or other companies. The name UniPixel and our logo are our trademarks. All trademarks,
servicemarks and tradenames included or incorporated by reference in this prospectus supplement or the accompanying prospectus
are the property of their respective owners.
No
action is being taken in any jurisdiction outside the United States to permit a public offering of the securities or possession
or distribution of this prospectus supplement. the accompanying prospectus, or any free writing prospectus provided in connection
with this offering in that jurisdiction. Persons who come into possession of this prospectus supplement, the accompanying prospectus,
or any free writing prospectus provided in connection with this offering in jurisdictions outside the United States are required
to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus supplement,
the accompanying prospectus, or any free writing prospectus provided in connection with this offering applicable to that jurisdiction.
INDUSTRY
AND MARKET DATA
Industry
and market data used throughout this prospectus were obtained through company research, surveys and studies conducted by third
parties, and industry and general publications. We have not independently verified any of the data from third party sources nor
have we ascertained any underlying economic assumptions relied upon therein. While we are not aware of any misstatements regarding
the industry data presented herein, estimates involve risks and uncertainties and are subject to change based on various factors,
including those discussed under the heading “Risk Factors.”
|
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|
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights certain information about us, this Offering and selected information contained elsewhere in or incorporated
by reference into this prospectus supplement. This summary is not complete and does not contain all of the information
that you should consider before deciding whether to invest in our securities. For a more complete understanding of our
company and this Offering, we encourage you to read and consider carefully the more detailed information in this prospectus
supplement and the accompanying prospectus, including the financial statements and other information incorporated by reference
in this prospectus supplement and the accompanying prospectus, and the information included in any free writing prospectus
that we have authorized for use in connection with this offering, including the information referred to under the heading
“Risk Factors” in this prospectus supplement. This prospectus supplement may add to, update or change information
in the accompanying prospectus.
Uni-Pixel,
Inc.
Overview
Uni-Pixel,
Inc. (NASDAQ: UNXL) develops and markets projected capacity touch sensor films for the touch screen and flexible electronics
markets. Our roll-to-roll electronics manufacturing process patterns fine line conductive elements on thin films. We market
our technologies for touch panel sensor and hard coat resin for cover glass replacement, and protective cover film applications
under the XTouch™ and Diamond Guard® brands.
We
believe we are one of the technology leaders in the optical design and manufacturing of large area microstructured polymer
film materials (“
PET films
”) and related technologies for the display, flexible electronics, and automotive
industries. Our microstructured polymer films, which we refer to as Performance Engineered Films (“
PEFs
”),
are designed to lower the cost and improve functionality and performance of devices in the markets they address. We make
transparent conductive films and flexible electronic films based on our proprietary manufacturing process for high volume,
roll-to-roll printing of flexible thin-film conductor patterns. The process offers precision micro-electronic circuit
patterning and modification of surface characteristics over a large area on an ultra-thin, clear, flexible, plastic substrate.
These films may be incorporated into computer, tablet, printer and smartphone touch sensors, as well as automotive, applications.
We sell the touch screen films under the brand XTouch™, as sub-components of a fully assembled touch sensor module.
In
addition to the flexible electronic films described above, we have developed a hard coat resin that can be applied using
film, spray or inkjet coating methods for applications as protective cover films, a cover lens replacement or a conformal
hard coat for plastic components. We sell our hard coat resin and optical films under the Diamond Guard® brand.
We
are headquartered in Santa Clara, California in Silicon Valley, with sales and research and development offices in The
Woodlands, Texas and Taiwan, and a manufacturing facility in Colorado Springs, Colorado. Our original equipment manufacturer,
or OEM, customers include Tier 1 PC and Tablet OEMs.
Manufacturing
Our
XTouch™ touch screens products are primarily manufactured in our facility in Colorado Springs, Colorado. The manufacturing
process is conducted in a clean room environment and employs roll-to-roll film production and advanced chemical and photolithographic
processes. The facility is equipped with equipment and infrastructure required to produce commercial level shipment to
our current and prospective customers.
Our
roll-to-roll process consists of a number of sequential steps to produce our XTouch™ touch sensor onto PET film.
A basecoat comprised of a catalyst impregnated photoresist is applied to both sides of a PET film. Photolithographic equipment
exposes the basecoat material with the XTouch™ touch sensor circuit pattern. Both sides of the PET film are exposed
simultaneously. The expose - plating system develops the exposed basecoat material and the remaining patterned basecoat
PET is plated with copper using an electroless plating chemistry. The patterned, copper plated PET film is then processed
by a second chemical plating process to apply a second metal for darkening the copper to enhance visual performance and
to improve the environmental reliability. A polymer overcoat is applied to the patterned PET film utilizing precision
film coating equipment. We intend to replace the current polymer overcoat with Diamond Guard®. Diamond Guard®
applied to our XTouch™ sensor will lower sensor product costs and enable new sensor products that are thinner and
lighter. Outgoing quality checks are performed on the XTouch™ sensor film, including 100% electrical test and visual
inspection. Protective shipping liner are applied to both sides of the XTouch™ sensor film and film is singulated
into individual sensors prior to being packaged into shipping containers.
We
believe the manufacturing facility and process equipment are capable of supporting current and future production requirements
through 2017 without significant capital expenditure.
Right
of First Offer
Two
parties, Hudson Bay Master Fund Ltd. and Capital Ventures International, previously in 2015 purchased Senior Secured Convertible
Notes and warrants from us pursuant to a Securities Purchase Agreement. The Securities Purchase Agreement provided that
they would each have the right to participate on a pro rata basis relative to the aggregate principal amount of the Senior
Secured Convertible Notes which each of them purchased for the purchase of no less than 35% in the aggregate of any future
offering of our securities offered to be sold by us, which for the avoidance of doubt includes the offering under this
prospectus supplement (the “
Right of First Offer
”). Subsequently in November 2015, the Right of First
Offer was modified to provide that no advance notice of the price and other terms of an underwritten public offering will
be provided to these two parties, and that they will receive such information in the ordinary course of an offering.
Corporate
Information
Our
executive offices are located at 4699 Old Ironsides Drive, Santa Clara, California 95054 USA, and our telephone number
is (281) 825-4500. We also have leased facilities located at 1150 E. Cheyenne Mountain Boulevard, Colorado Springs, Colorado
and at 8708 Technology Forest Place, Suite 100, The Woodlands, Texas, 77381. We were incorporated in Delaware on May 24,
2001. Additional information about us is available on our website at
www.unipixel.com
. The information contained
on or that may be obtained from our website is not, and shall not be deemed to be, a part of this prospectus supplement
or the accompanying prospectus. Our Common Stock is currently traded on The Nasdaq Capital Market under the ticker symbol
“UNXL.”
|
|
|
|
|
|
|
|
|
|
THE OFFERING
|
|
|
|
|
|
|
Issuer
|
Uni-Pixel, Inc.
|
|
|
|
|
|
|
Securities offered by us
|
3,000 units are being offered. Each unit consists of: (i) one share of Series A-1 Preferred Stock, convertible into shares of our common stock; and (ii) a Warrant to purchase eight hundred thirty three and one/third shares of our common stock.
|
|
|
|
|
|
|
Series A-1 Preferred Stock
|
Each share of Series A-1 Preferred Stock has a stated value
of $1,000 and is convertible into shares of Common Stock at an initial conversion price of $1.50 (the “
Conversion Price
”),
subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or similar events.
At any time or times after the ninetieth calendar day after
the initial issuance date of such Series A-1 Preferred Stock (or such earlier date after such initial issuance date that the volume
weighted average price of our common stock is less than or equal to $0.75 (as adjusted for stock splits, stock dividends, stock
combinations, recapitalizations or similar events)), each holder has the additional right to convert the Series A-1 Preferred Stock
into shares of our common stock at the Alternate Conversion Price (as defined below) instead of the Conversion Price.
The “
Alternate Conversion Price
” is defined
as that price which is the lower of (i) the Conversion Price then in effect and (ii) the greater of (A) $0.35 and (B) 93% of the
volume weighted average price of our common stock on the trading day immediately preceding the time of the delivery or deemed delivery
of the applicable conversion notice.
For a more detailed summary
of the terms of the Series A-1 Preferred Stock, see “Description of Securities—Description of Series A-1 Convertible
Preferred Stock” beginning on page S-18 of this prospectus supplement.
|
|
|
|
|
|
|
Warrants
|
We are offering warrants to
purchase up to 2,500,000 shares of Common Stock, which will initially become exercisable on July 20, 2017, the
six month anniversary of the initial issuance date, and will expire on July 20, 2022.
The initial exercise price of the Warrants is $1.50 (subject
to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or similar events).
If as of July 20, 2017,
the exercise price then in effect is greater than the greater of (x) $1.26 and (y) 93% of the lowest volume weighted
average price of our common stock during the period commencing on January 20, 2017 through July 19, 2017
(the “
July 20, 2017 Adjustment Price
”), the exercise price shall be lowered to such July 20,
2017 Adjustment Price.
The warrants may be exercised for cash, provided that, if
there is no effective registration statement available registering the exercise of the warrants, the warrants may be exercised
on a cashless basis.
For more information on the terms of the Warrants, see “Description
of Securities—Description of Warrants to Purchase Common Stock” beginning on page S-24 of this prospectus supplement.
|
|
|
Limitations on Conversion or Exercise
|
The Series A-1 Preferred Stock
and the Warrants may not be converted or exercised, as applicable, if, after giving effect to such conversion or exercise,
as applicable, the holder of the Series A-1 Preferred Stock or Warrant, as applicable, together with its affiliates
would beneficially own in excess of 4.99% of our outstanding shares of common stock. At each holder’s option, such
conversion or exercise blocker may be raised or lowered to any other percentage not in excess of 9.99%.
|
|
|
Common Stock to be outstanding after this offering
|
47,622,841
shares giving effect to the sale and assuming the Warrants
are exercised after the six month anniversary.
|
|
|
|
|
|
|
Use of Proceeds
|
We estimate the net proceeds to us from this Offering without giving effect to any exercise of the Warrants being offered in this Offering, will be $2,780,000 at the Closing. We intend to use the net proceeds from the sale of the securities offered by us under this prospectus supplement for general corporate purposes. See “
Use of Proceeds
” on page S-16 of this prospectus supplement.
|
|
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Risk Factors
|
Investing in our securities involves a high degree of risk. See “
Risk Factors
” beginning on page S-7 of this prospectus supplement and page 8 of the accompanying prospectus.
|
|
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|
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The Nasdaq Capital Market Listing
|
Our Common Stock is listed on The Nasdaq Capital Market under the symbol “UNXL.”
|
|
|
|
|
|
|
Outstanding Common Stock
The number of shares of Common Stock to be outstanding immediately after this offering is based on 45,122,841 shares outstanding as of January 16, 2017, and excludes as of that date:
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|
|
|
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|
|
●
|
133,692 shares of treasury stock;
|
|
|
|
|
|
|
|
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●
|
2,181,142 shares of our Common Stock issuable upon the exercise of stock options outstanding with a weighted average exercise price of $5.41 per share;
|
|
|
|
|
|
|
|
|
●
|
1,072,502 shares of Common Stock issuable upon the vesting of restricted stock units outstanding;
|
|
|
|
|
|
|
|
|
●
|
9,475,360 shares of our Common Stock issuable upon the exercise of warrants outstanding with a weighted average exercise price of $1.61 per share; and
|
|
|
|
|
|
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|
●
|
478,802 shares of our Common Stock available as of that date for future grant or issuance pursuant to our stock plans.
|
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|
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SUMMARY
FINANCIAL INFORMATION
The
following tables set forth, for the periods and dates indicated, our summary consolidated statements of operations and
consolidated balance sheets data. The summary consolidated financial data has been derived from our unaudited consolidated
financial statements and accompanying notes for the nine months ended September 30, 2016 and September 30, 2015, as well
as our audited historical consolidated financial statements and accompanying notes for the years ended December 31, 2015
and 2014. This information is only a summary. You should read this data in conjunction with our historical consolidated
financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” contained in our Annual Report filed on Form 10-K, Quarterly Reports filed on Form 10-Q and
other information on file with the SEC that is incorporated by reference in this prospectus supplement and the accompanying
prospectus. For more details on how you can obtain our SEC reports and other information, you should read the section
of this prospectus supplement entitled “Where You Can Find More Information.” The results included here are
not necessarily indicative of future performance.
Uni-Pixel,
Inc.
Consolidated
Statements of Operations
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
Year
ended December 31,
|
|
|
For
the nine months ended
September 30,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
Revenue
|
|
$
|
3,757
|
|
|
$
|
—
|
|
|
$
|
2,714
|
|
|
$
|
2,867
|
|
|
|
Cost
of revenues
|
|
|
12,335
|
|
|
|
—
|
|
|
|
11,431
|
|
|
|
8,128
|
|
|
|
Gross
margin
|
|
|
(8,578
|
)
|
|
|
—
|
|
|
|
(8,717)
|
|
|
|
(5,261)
|
|
|
|
Selling,
general and administrative expenses
|
|
|
10,154
|
|
|
|
11,754
|
|
|
|
5,602
|
|
|
|
8,368
|
|
|
|
Research
and development
|
|
|
6,811
|
|
|
|
8,126
|
|
|
|
5,059
|
|
|
|
5,690
|
|
|
|
Operating
loss
|
|
|
(25,543
|
)
|
|
|
(19,880
|
)
|
|
|
(19,738)
|
|
|
|
(19,319)
|
|
|
|
Other
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
issuance cost amortization expense
|
|
|
(1,365
|
)
|
|
|
—
|
|
|
|
(506)
|
|
|
|
(827)
|
|
|
|
Gain
on derivative liability
|
|
|
5,517
|
|
|
|
—
|
|
|
|
|
|
|
|
4,992
|
|
|
|
Loss
on change in warranty liability
|
|
|
—
|
|
|
|
—
|
|
|
|
(907)
|
|
|
|
|
|
|
|
Accretion
of discount on convertible notes
|
|
|
(10,659
|
)
|
|
|
—
|
|
|
|
(1,291)
|
|
|
|
(7,171)
|
|
|
|
Legal
Settlements
|
|
|
(750
|
)
|
|
|
(2,275
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
Interest
income (expense), net
|
|
|
(521
|
)
|
|
|
16
|
|
|
|
(12)
|
|
|
|
(424)
|
|
|
|
Net
loss from continuing operations
|
|
$
|
(33,321
|
)
|
|
$
|
(22,139
|
)
|
|
$
|
22,114
|
|
|
$
|
(22,749)
|
|
|
|
Discontinued
operations
|
|
$
|
(3,702
|
)
|
|
$
|
(3,535
|
)
|
|
$
|
—
|
|
|
$
|
(1,093)
|
|
|
|
Net
Loss
|
|
$
|
(37,023
|
)
|
|
$
|
(25,674
|
)
|
|
|
22,114
|
|
|
$
|
(31,450)
|
|
|
|
Per
Share Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss – basic
|
|
$
|
(2.23
|
)
|
|
$
|
(2.08
|
)
|
|
$
|
(0.55)
|
|
|
$
|
(2.22)
|
|
|
|
Net
loss – diluted
|
|
$
|
(2.23
|
)
|
|
$
|
(2.08
|
)
|
|
$
|
(0.55)
|
|
|
$
|
(2.22)
|
|
|
|
Weighted
average number of basic common shares outstanding
|
|
|
16,574,743
|
|
|
|
12,331,322
|
|
|
|
40,359,715
|
|
|
|
14,154,871
|
|
|
|
Weighted
average number of diluted common shares outstanding
|
|
|
16,574,743
|
|
|
|
12,331,322
|
|
|
|
40,359,715
|
|
|
|
14,154,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets Data
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
December 31, 2014
|
|
|
September 30, 2016
|
|
|
September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
7,618
|
|
|
$
|
23,663
|
|
|
$
|
6,461
|
|
|
$
|
2,178
|
|
|
|
Restricted cash
|
|
|
4,098
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,004
|
|
|
|
Account receivable, net
|
|
|
334
|
|
|
|
—
|
|
|
|
767
|
|
|
|
932
|
|
|
|
Inventory
|
|
|
769
|
|
|
|
—
|
|
|
|
677
|
|
|
|
1,178
|
|
|
|
Debt issuance costs
|
|
|
526
|
|
|
|
—
|
|
|
|
—
|
|
|
|
978
|
|
|
|
Assets held for sale
|
|
|
—
|
|
|
|
7,609
|
|
|
|
—
|
|
|
|
—
|
|
|
|
Prepaid licenses
|
|
|
4,900
|
|
|
|
—
|
|
|
|
4,900
|
|
|
|
4,900
|
|
|
|
Prepaid expenses
|
|
|
819
|
|
|
|
122
|
|
|
|
452
|
|
|
|
1,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
19,064
|
|
|
|
31,394
|
|
|
|
13,257
|
|
|
|
17,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation
|
|
|
1,842
|
|
|
|
3,500
|
|
|
|
1,347
|
|
|
|
1,935
|
|
|
|
Restricted cash
|
|
|
—
|
|
|
|
18
|
|
|
|
—
|
|
|
|
—
|
|
|
|
Other long-term assets
|
|
|
13
|
|
|
|
|
|
|
|
13
|
|
|
|
13
|
|
|
|
Prepaid licenses, net of current portion
|
|
|
5,629
|
|
|
|
—
|
|
|
|
1,954
|
|
|
|
6,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
26,548
|
|
|
$
|
34,912
|
|
|
$
|
16,571
|
|
|
$
|
25,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,150
|
|
|
$
|
281
|
|
|
$
|
2,521
|
|
|
$
|
1,098
|
|
|
|
Accrued liabilities
|
|
|
780
|
|
|
|
—
|
|
|
|
855
|
|
|
|
5,305
|
|
|
|
Settlement of class action and derivative lawsuits
|
|
|
—
|
|
|
|
2,275
|
|
|
|
—
|
|
|
|
—
|
|
|
|
Convertible notes payable
|
|
|
2,773
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,646
|
|
|
|
Short term debt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
Derivative liability
|
|
|
491
|
|
|
|
—
|
|
|
|
1,369
|
|
|
|
989
|
|
|
|
Deferred revenue
|
|
|
—
|
|
|
|
5,000
|
|
|
|
—
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
5,194
|
|
|
|
7,556
|
|
|
|
4,745
|
|
|
|
9,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royalty liability
|
|
|
1,175
|
|
|
|
—
|
|
|
|
700
|
|
|
|
1,403
|
|
|
|
Long term liabilities
|
|
|
645
|
|
|
|
—
|
|
|
|
432
|
|
|
|
—
|
|
|
|
Long term debt
|
|
|
450
|
|
|
|
—
|
|
|
|
—
|
|
|
|
461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
7,464
|
|
|
|
7,556
|
|
|
|
5,877
|
|
|
|
10,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value; 100,000,000 shares authorized, 45,043,730 shares issued and outstanding at September 30, 2016 and 32,170,778 shares issued and outstanding at December 31, 2015
|
|
|
32
|
|
|
|
12
|
|
|
|
45
|
|
|
|
19
|
|
|
|
Additional paid-in capital
|
|
|
168,243
|
|
|
|
139,512
|
|
|
|
181,954
|
|
|
|
158,640
|
|
|
|
Accumulated deficit
|
|
|
(149,191
|
)
|
|
|
(112,168
|
)
|
|
|
(171,305
|
)
|
|
|
(143,618
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity
|
|
|
19,084
|
|
|
|
27,356
|
|
|
|
10,694
|
|
|
|
15,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
26,548
|
|
|
$
|
34,912
|
|
|
$
|
16,571
|
|
|
$
|
25,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Prior to making a decision about investing in our Series A-1 Preferred
Stock, the accompanying Warrants and the Common Stock underlying each of them, you should carefully consider the specific factors
discussed below, the information under the heading “Risk Factors” in the accompanying prospectus, together with all
of the other information contained or incorporated by reference in this prospectus supplement or accompanying prospectus. You
should also consider the risks, uncertainties and assumptions discussed under “Item 1A — Risk Factors,” in our
Annual Report on Form 10-K for the year ended December 31, 2015, and in our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2016, all of which are incorporated herein by reference, and may be amended, supplemented or superseded from time
to time by other reports we file with the SEC in the future. The risks and uncertainties we have described are not the only ones
we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our
operations.
Our
business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading
price of our securities could decline due to any of these risks, and you may lose all or part of your investment. This prospectus
and the incorporated documents also contain forward-looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the
risks mentioned elsewhere in this prospectus.
Risks
Related to Our Business
Expansion
into new markets may increase the complexity of our business, cause us to increase our research and development expenses to develop
new products and technologies or cause our capital expenditures to increase, and if we are unable to successfully adapt our business
processes and product offerings as required by these new markets, our ability to grow will be adversely affected.
As
we expand our product lines to sell into new markets, such as automotive, the overall complexity of our business may increase
at an accelerated rate and we may become subject to different market dynamics. These dynamics may include, among other things,
different demand volume, seasonality, product requirements, sales channels, and warranty and return policies. In addition, expansion
into other markets may result in increases in research and development expenses and substantial investments in manufacturing capability
or technology enhancements. If we fail to successfully expand into new markets with products that we do not currently offer, we
may lose business to our competitors or new entrants who offer these products.
If
we fail to develop and introduce new or enhanced solutions on a timely basis, our ability to attract and retain customers could
be impaired, and our revenues and competitive position may be harmed.
The
markets for our products are characterized by rapid technological change, frequent new product introductions, changes in customer
requirements and evolving industry standards, all with an underlying pressure to reduce cost and meet stringent reliability and
qualification requirements. In order to compete effectively, we must continually introduce new products or enhance existing products
and accurately anticipate customer requirements for new and upgraded products. The introduction of new products by our competitors,
the market acceptance of solutions based on new or alternative technologies, or the emergence of new industry standards could
render our existing or future solutions obsolete. Our failure to anticipate or timely develop new or enhanced solutions or technologies
in response to technological shifts or changes in customer requirements could result in decreased revenues and an increase in
design wins by our competitors.
New
product development or the enhancement of existing products is subject to a number of risks and uncertainties. We may experience
difficulties with solution design, manufacturing or otherwise that could delay or prevent the introduction of new or enhanced
solutions. Alternatively, even if technical engineering hurdles can be overcome, we must successfully anticipate customer requirements
regarding features and performance, the new or enhanced products must be competitively priced, and they must become available
during the window of time when customers are ready to purchase our solutions.
Even
after new or enhanced products are developed, we must be able to successfully bring them to market. The success of new product
introductions depends on a number of factors including, but not limited to, timely and successful product development, market
acceptance, our ability to manage the risks associated with new product production ramp-up issues, the effective management of
purchase commitments and inventory levels in line with anticipated product demand, the availability of products in appropriate
quantities and costs to meet anticipated demand, and the risk that new products may have quality or other defects in the early
stages of introduction. Ramping of production capacity also entails risks of delays which can limit our ability to realize the
full benefit of new product introduction. We cannot assure you that we will be able to identify, develop, manufacture, market
or support new or enhanced products successfully, if at all, or on a timely basis. Accordingly, we cannot determine in advance
the ultimate effect of new product introductions and transitions, and any failure to manage new product introduction risks could
adversely affect our revenues and therefore our business.
We
are a company with a limited operating history, our future profitability is uncertain and we anticipate future losses and negative
cash flow, which may limit or delay our ability to become profitable.
We
are a company with a limited operating history and little revenues to date. We may never be able to produce material revenues
or operate on a profitable basis. As a result, we have incurred losses since our inception and expect to experience operating
losses and negative cash flow for the foreseeable future. As of September 30, 2016, we had an accumulated total deficit of $171,305,000.
We
anticipate our losses will continue to increase from current levels because we expect to incur additional costs and expenses related
to prototype development, consulting costs, laboratory development costs, marketing and other promotional activities, the addition
of engineering and manufacturing personnel, and the continued development of relationships with strategic business partners. Moreover,
planned products based upon our Performance Engineered Film™ technology may never become commercially viable and thus may
never generate any revenues. Even if we find commercially viable applications for our Performance Engineered Film™ technology
and materials, we may never recover our research and development expenses.
We
have had a history of losses and may require additional capital to fund our operations, which capital may not be available on
commercially attractive terms or at all.
We
have experienced substantial net losses in each fiscal period since our inception. These net losses resulted from a lack of substantial
revenues and the significant costs incurred in the development and acceptance of our technology. We may in the future require
sources of capital in addition to cash on hand to continue operations and to implement our business plan. We project that we have
sufficient liquid assets to continue operating for at least the next twelve months. However, if our operations do not become cash
flow positive, we may be forced to seek credit line facilities from financial institutions, equity investments, or debt arrangements.
No assurances can be given that we will be successful in obtaining such additional financing on reasonable terms, or at all. If
adequate funds are not available when needed on acceptable terms, or at all, we may be unable to adequately fund our business
plan, which could have a negative effect on our business, results of operations, and financial condition.
We
may not be able to successfully integrate the production of the XTouch Touch Sensors into our ongoing business operations, which
may result in our inability to fully realize the intended benefits of the asset acquisition and license transactions, or may disrupt
our current operations, which could have a material adverse effect on our business, financial position and/or results of operations.
We
are in the process of integrating the production of the XTouch Touch Sensors into our business, and this process may absorb significant
management attention, produce unforeseen operating difficulties and expenditures and may not produce the favorable business and
market opportunities the asset acquisition and license transactions were intended to provide. If we fail to successfully integrate
the XTouch business into our business, our business, financial position and results of operations could be materially adversely
affected.
We
are dependent on a limited number of customers.
We
have only recently begun generating revenues from a limited number of customers, and our customer concentration may change significantly
from period-to-period depending on a customer’s product cycle and changes in our industry. The loss of a customer, a reduction
in net revenues of a customer for any reason, or a failure of a customer to fulfill its financial or other obligations due to
us could have a material adverse effect on our business, financial condition, and future revenue stream.
Our
operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control.
As
a result of our limited operating history and the nature of the markets in which we compete, it is extremely difficult for us
to forecast accurately. We base our current and future expense levels largely on our investment plans and estimates of future
events, although certain of our expense levels are, to a large extent, fixed. We may be unable to adjust spending in a timely
manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues relative to our
planned expenditures would have an immediate adverse effect on our business, results of operations and financial condition.
In
addition, we are subject to the following factors, among others, that may negatively affect and cause fluctuations in our operating
results:
|
●
|
the
timing of programs to our customers;
|
|
|
|
|
●
|
the
announcement or introduction of new products or technologies by our competitors;
|
|
|
|
|
●
|
our
ability to upgrade and develop our infrastructure to accommodate growth;
|
|
|
|
|
●
|
our
ability to attract and retain key personnel in a timely and cost effective manner;
|
|
|
|
|
●
|
technical
difficulties;
|
|
|
|
|
●
|
the
amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations, and infrastructure;
and
|
|
|
|
|
●
|
general
economic conditions as well as economic conditions specific to the touchscreen industry.
|
Further,
as a strategic response to changes in the competitive environment, we may from time to time make certain pricing, service, or
marketing decisions that could have a material and adverse effect on our business, results of operations, and financial condition.
Due to the foregoing factors, our revenues and operating results are and will remain difficult to forecast.
We
are exposed to industry downturns and cyclicality in our target markets than may result in fluctuations in our operating results.
The
PC and electronics industries have experienced significant economic downturns at various times. These downturns are characterized
by diminished product demand, accelerated erosion of average selling prices, and production overcapacity. In addition, the PC
and electronics industries are cyclical in nature. We seek to reduce our exposure to industry downturns and cyclicality by providing
design and production services for leading companies in rapidly expanding industry segments. We may, however, experience substantial
period-to-period fluctuations in future operating results because of general industry conditions or events occurring in the general
economy.
If
we do not keep pace with technological innovations, our products may not remain competitive and our revenue and operating results
may suffer.
We
operate in rapidly changing highly competitive markets. Technological advances, the introduction of new products and new design
techniques could adversely affect our business unless we are able to adapt to changing conditions. Technological advances could
render our solutions less competitive or obsolete, and we may not be able to respond effectively to the technological requirements
of evolving markets. Therefore, we will be required to expend substantial funds for and commit significant resources to enhancing
and developing new technology which may include purchasing advanced design tools and test equipment, hiring additional highly
qualified engineering and other technical personnel, and continuing and expanding research and development activities on existing
and potential human interface solutions.
Our
research and development efforts with respect to new technologies may not result in customer or market acceptance. Some or all
of those technologies may not successfully make the transition from the research and development stage to cost-effective production
as a result of technology problems, competitive cost issues, yield problems, and other factors. Even if we successfully complete
a research and development effort with respect to a particular technology, our customers may decide not to introduce or may terminate
products utilizing the technology for a variety of reasons, including difficulties with other suppliers of components for the
products, superior technologies developed by our competitors and unfavorable comparisons of our solutions with these technologies,
price considerations and lack of anticipated or actual market demand for the products.
Our
business could be harmed if we are unable to develop and utilize new technologies that address the needs of our customers, or
our competitors or customers develop and utilize new technologies more effectively or more quickly than we can. Any investments
made to enhance or develop new technologies that are not successful could have an adverse effect on our net revenue and operating
results.
The
length of a customer’s product development and release cycle depends on many factors outside of our control and could cause
us to incur significant expenses without offsetting revenues, or revenues that vary significantly from quarter to quarter.
The
development and release cycle for customer products is lengthy and unpredictable. OEMS and other customers often undertake significant
evaluation and design in the qualification of our products, which contributes to a lengthy product release cycle. A customer’s
decision to purchase our technology often requires a lengthy approval process undertaken by several decision makers at the customer.
The process requires us to make significant investments of time and resources before we can be sure that we will generate any
significant sales to our customers or recover our investment. There is no assurance that a customer will adopt our technology
after the evaluation or design phase, and we face the risk that our technology will fail to meet our customer’s technical,
performance or cost requirements, or that our products will be replaced by competitive products or alternative technological solutions.
Even if our product is satisfactory to our customer, the customer may delay or terminate its product development efforts. The
occurrence of any of these events could cause sales to not materialize, be deferred, or be cancelled, which would adversely affect
our operating results. Furthermore, the lengthy and variable development and release cycle for products may also have a negative
impact on the timing of our revenues, causing our revenues and results of operations to vary significantly from quarter to quarter.
Provisions
in our Amended and Restated Bylaws provide for indemnification of officers and directors in certain circumstances, which could
require us to direct funds away from our business.
Our
Amended and Restated Bylaws contain provisions regarding indemnification and advancement of expenses actually and reasonably incurred
by any person who is or was a party to a threatened, pending, or completed civil, criminal, administrative or investigative matter
by reason of the fact that such person is or was a director, officer, employee, or agent of the Company, provided that such person
acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company,
and, with respect to any criminal action or proceeding, had no reason or cause to believe his or her conduct was unlawful. The
advancement of expenses is expressly conditioned upon receipt of an undertaking by the director, officer, employee, or agent to
repay all such amounts so advanced in the event that it shall ultimately be determined that he or she is not entitled to be indemnified
by the Company. Funds so advanced or paid in fulfillment of our indemnification obligations (including satisfaction of defense
costs, judgments, fines and expenses) may be funds we need for the operation and growth of our business.
If
third parties infringe upon our intellectual property, we may expend significant resources enforcing our rights or suffer competitive
injury.
Existing
laws, contractual provisions and remedies afford only limited protection for our intellectual property. We may be required to
spend significant resources to monitor and police our intellectual property rights. Effective policing of the unauthorized use
of our technology or intellectual property is difficult and litigation may be necessary in the future to enforce our intellectual
property rights. Intellectual property litigation is not only expensive, but time-consuming, regardless of the merits of any claim,
and could divert attention of our management from operating the business. Intellectual property lawsuits are subject to inherent
uncertainties due to, among other things, the complexity of the technical issues involved, and we cannot assure you that we will
be successful in asserting our intellectual property rights. Attempts may be made to copy or reverse engineer aspects of our technology
or to obtain and use information that we regard as proprietary. We may not be able to detect infringement and may lose competitive
position in the market before they do so. In addition, competitors may design around our technology or develop competing technologies.
We cannot assure you that we will be able to protect our proprietary rights against unauthorized third party copying or use. The
unauthorized use of our technology or of our proprietary information by competitors could have an adverse effect on our ability
to sell our technology.
The
laws of foreign countries may not provide protection of our intellectual property rights to the same extent as the laws of the
United States, which may make it more difficult for us to protect our intellectual property.
As
part of our business strategy, we target customers and relationships with suppliers and original equipment manufacturers in countries
with large populations and propensities for adopting new technologies. However, many of these countries do not address misappropriation
of intellectual property nor deter others from developing similar, competing technologies or intellectual property. Effective
protection of patents, copyrights, trademarks, trade secrets and other intellectual property may be unavailable or limited in
some foreign countries. In particular, the laws of some foreign countries in which we do business may not protect our intellectual
property rights to the same extent as the laws of the United States. As a result, we may not be able to effectively prevent competitors
in these regions from infringing our intellectual property rights, which could reduce our competitive advantage and ability to
compete in those regions and negatively impact our business.
Any
claims that our technologies infringe the intellectual property rights of third parties could result in significant costs and
have a material adverse effect on our business.
We
cannot be certain that our technologies and products do not and will not infringe issued patents or other third party proprietary
rights. Any claims, with or without merit, could result in significant litigation costs and diversion of resources, including
the attention of management, and could require us to enter into royalty or licensing agreements, any of which could have a material
adverse effect on our business. There can be no assurance that such licenses could be obtained on commercially reasonable terms,
if at all, or that the terms of any offered licenses would be acceptable to us. We may also have to pay substantial damages to
third parties, or indemnify customers or licensees for damages they suffer if the products they purchase from us or the technology
they license from us violates any third party intellectual property rights. An adverse determination in a judicial or administrative
proceeding, or a failure to obtain necessary licenses to use such third-party technology could prevent us from manufacturing,
using, or selling certain of our products, and there is no guarantee that we will able to develop or acquire alternate non-infringing
technology.
In
addition, we license certain technology used in and for our products from third parties. These third-party licenses are granted
with restrictions, and there can be no assurances that such third-party technology will remain available to us on commercially
acceptable terms.
If
third-party technology currently utilized in our products is no longer available to us on commercially acceptable terms, or if
any third party initiates litigation against us for alleged infringement of their proprietary rights, we may not be able to sell
certain of our products and we could incur significant costs in defending against litigation or attempting to develop or acquire
alternate non-infringing products, which would have an adverse effect on our operating results.
Risks
Related to Our Common Stock and this Offering
Our
Common Stock has experienced significant price and volume volatility, which substantially increases the risk of loss to persons
owning our common stock.
Our
Common Stock has traded on The NASDAQ Capital Market as low as $0.36 and as high at $38.70 during the period from January 1, 2012
through January 17, 2017. In addition, the markets for high technology stocks have experienced extreme volatility that
has often been unrelated to the operating performance of the particular companies. These broad market fluctuations may adversely
affect the trading price of shares our Common Stock.
The
value of an investment in our Common Stock or Series A-1 Preferred Stock could decline due to the impact of any of the following
factors upon the market price of our Common Stock:
|
●
|
Disappointing
results from our development efforts;
|
|
|
|
|
●
|
Failure
to meet our revenue or profit goals or operating budget;
|
|
|
|
|
●
|
Decline
in demand for our Common Stock;
|
|
|
|
|
●
|
Downward
revisions in securities analysts’ estimates or changes in general market conditions;
|
|
|
|
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●
|
Technological
innovations by competitors or in competing technologies;
|
|
|
|
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●
|
Investor
perception of our industry or our prospects;
|
|
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●
|
General
economic trends;
|
|
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|
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●
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Variations
in our quarterly operating results;
|
|
|
|
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●
|
Our
inability to increase revenues:
|
|
|
|
|
●
|
Announcement
of new customer relationships by our competitors;
|
|
|
|
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●
|
Departures
of our executive officers;
|
|
|
|
|
●
|
General
conditions in the economy, including fluctuations in interest rates;
|
|
|
|
|
●
|
Developments
in patents or other intellectual property rights and litigation;
|
|
|
|
|
●
|
Developments
in our relationships with our customers and suppliers;
|
|
|
|
|
●
|
Any
significant acts of terrorism against the United States; and
|
|
|
|
|
●
|
Our
currently limited public float.
|
The
market price of our Common Stock has been volatile, and the value of stockholders’ investments could decline significantly.
The
trading price for our Common Stock has been, and may continue to be, volatile. The price at which our Common Stock trades depends
upon a number of factors, many of which are beyond our control. These factors include our historical and anticipated operating
results, our financial situation, announcements of technological innovations or new products by us or our competitors, customer
and vendor relationships, our ability or inability to raise the additional capital we may need and the terms on which we raise
it, changes in earnings estimates by analysts and general market and economic conditions. Further, broad market fluctuations may
lower the market price of our Common Stock and affect our trading volume.
We
have a significant number of outstanding warrants and options, and future sales of the underlying shares of Common Stock could
adversely affect the market price of our Common Stock.
As of January 16,
2017, we had outstanding warrants and options exercisable for an aggregate of 11,675,251 shares of Common Stock at a weighted
average exercise price of $2.32 per share. Upon exercise of these warrants or options, we would issue additional shares of our
Common Stock. As a result, our current stockholders as a group would own a substantially smaller interest in us and may have less
influence on our management and policies than they now have. Furthermore, the holders may sell these shares in the public markets
from time to time, without limitations on the timing, amount or method of sale. As our stock price rises, the holders may exercise
more of their warrants and options and sell a large number of shares. This could cause the market price of our Common Stock to
decline.
In
addition, warrants covering 9,625,871 shares which were issued in November 2015 have an exercise price of $1.50 per share and
have a term of five (5) years from the date of issuance. The exercise price of the warrants and the number of shares for which
the warrants are exercisable are subject to certain adjustments if we issue or sell additional shares of Common Stock or Common
Stock equivalents at a price per share less than the exercise price then in effect, or without consideration. Notwithstanding
the foregoing, there will be no adjustment to the exercise price of these warrants or number of warrant shares issuable upon exercise
in connection with the issuance of Common Stock upon Board of Director-approved employee benefit plans or upon the conversion,
exercise or payment of certain outstanding, excluded securities.
We
may be required to raise additional financing by issuing new securities with terms or rights superior to those of our existing
stockholders, which could adversely affect the market price of our shares of Common Stock and our business.
We
may require additional financing to fund future operations, including expansion in current and new markets, development and acquisition,
capital costs and the costs of any necessary implementation of technological innovations or alternative technologies. We may not
be able to obtain financing on favorable terms, if at all. If we raise additional funds by issuing equity securities, the percentage
ownership of our current stockholders will be reduced, and the holders of the new equity securities may have rights superior to
those of the holders of shares of Common Stock or Series A-1 Preferred Stock, which could adversely affect the market price of
our Common Stock and the voting power of shares of our Common Stock or Series A-1 Preferred Stock. If we raise additional funds
by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders
of shares of Common Stock and Series A-1 Preferred Stock, and the terms of these debt securities could impose restrictions on
operations and create a significant interest expense for us which could have a materially adverse effect on our business.
We
have broad discretion in the use of the net proceeds from this Offering and may not use them effectively.
Our
management will have broad discretion in the application of the net proceeds from this Offering and could spend the proceeds in
ways with which you may not agree. Accordingly, you will be relying on the judgment of our management with regard to the use of
these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds
are being used appropriately. It is possible that the proceeds will be invested or otherwise used in a way that does not yield
a favorable, or any, return for our company.
Future
sales of our Common Stock or preferred stock by us could adversely affect the price of our Common Stock, and our future capital-raising
activities could involve the issuance of equity securities, which would dilute your investment and could result in a decline in
the trading price of our Common Stock.
Our
long-term success is dependent on us obtaining sufficient capital to fund our operations and to develop our technology, and bringing
our technology to the worldwide market to obtain sufficient sales volume to be profitable. We may sell securities in the public
or private equity markets if and when conditions are favorable, even if we do not have an immediate need for additional capital
at that time. Sales of substantial amounts of our Common Stock or preferred stock, or the perception that such sales could occur,
could adversely affect the prevailing market price of our Common Stock and our ability to raise capital. We may issue additional
Common Stock or preferred stock in future financing transactions or as incentive compensation for our executive management and
other key personnel, consultants and advisors. Issuing any equity securities would be dilutive to the equity interests represented
by our then-outstanding shares of Common Stock and Series A-1 Preferred Stock. The market price for our Common Stock could decrease
as the market takes into account the dilutive effect of any of these issuances. Furthermore, we may enter into financing transactions
at prices that represent a substantial discount to the market price of our Common Stock. A negative reaction by investors and
securities analysts to any discounted sale of our equity securities could result in a decline in the trading price our Common
Stock.
Our
Common Stock may be delisted from The Nasdaq Capital Market, or NASDAQ.
In order to maintain continued
inclusion of our Common Stock for trading on NASDAQ, we are required to maintain a minimum $1.00 per share bid price for our Common
Stock. On January 17, 2017, the last reported sale price of our Common Stock on NASDAQ was $1.26 per share. If the
bid price of our Common Stock is below $1.00 for an extended period, or we are unable to continue to meet NASDAQ’s listing
maintenance standards for any other reason, our common stock could be delisted from NASDAQ.
If
our Common Stock is delisted from NASDAQ, we will make every possible effort to have it listed on the OTCQX Market (the “
OTCQX
”).
If our Common Stock was to be traded on the OTCQX, the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”),
and related SEC rules would impose additional sales practice requirements on broker-dealers that sell our securities. These rules
may adversely affect the ability of stockholders to sell our common stock and otherwise negatively affect the liquidity, trading
market and price of our Common Stock.
If
our Common Stock would not be able to be traded on the OTCQX or on another over-the-counter market, the OTCQB, we expect that
our Common Stock would be eligible to be quoted on the OTC Markets Group’s OTC Pink platform (the “
OTC Pink
”).
The OTC Pink securities market consists of security firms who act as market makers in the stocks, usually, of very small companies.
The OTC Pink is a significantly more limited market than NASDAQ, and the quotation of our Common Stock on the OTC Pink may result
in a less liquid market available for existing and potential stockholders to trade our Common Stock and could further depress
the trading price of our Common Stock.
We
believe that the listing of our Common Stock on a recognized national trading market, such as NASDAQ, is an important part of
our business and strategy. Such a listing helps our stockholders by providing a readily available trading market with current
quotations. Without such a listing, the sale or purchase of our Common Stock would likely be made more difficult and the trading
volume and liquidity of our Common Stock would likely decline. Furthermore, a delisting from NASDAQ would result in negative publicity
and would negatively impact our ability to raise capital in the future.
There
is no public market for the Series A-1 Preferred Stock or the Warrants being offered in this Offering.
There
is no established public trading market for the Series A-1 Preferred Stock or the Warrants being offered in this Offering, and
we do not expect a market to develop. In addition, we do not intend to apply for listing of the Series A-1 Preferred Stock or
the Warrants on any national securities exchange or other nationally recognized trading system. Without an active market, the
liquidity of the warrants will be limited.
Holders
of our Series A-1 Preferred Stock and our Warrants will have no rights as a Common Stockholder until such holders convert their
Series A-1 Preferred Stock and exercise their Warrants, as applicable, and acquire our Common Stock.
Until
holders of Series A-1 Preferred Stock and Warrants acquire shares of our Common Stock upon conversion of the Series A-1 Preferred
Stock or exercise of the Warrants, as applicable, holders of Series A-1 Preferred Stock and Warrants will have no rights with
respect to the shares of our Common Stock underlying such Series A-1 Preferred Stock and Warrants. Upon conversion of Series A-1
Preferred Stock or exercise of the Warrants, as applicable, the holders thereof will be entitled to exercise the rights of a common
stockholder only as to matters for which the record date occurs after the exercise date.
The
Warrants included in this Offering may not have any value.
The
Warrants will expire on the Expiration Date. In the event our Common Stock price does not exceed the exercise price of the Warrants
during the period when the Warrants are exercisable, the Warrants may not have any value.
Risks
Related to Debt
Restrictive
covenants under our credit facility with Western Alliance Bank may adversely affect our operations.
If
we utilize our loan and security agreement with Western Alliance Bank, it contains a number of restrictive covenants that will
impose significant operating and financial restrictions on our ability to, without prior written consent from Western Alliance
Bank:
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●
|
Convey,
sell, lease, transfer or otherwise dispose of or permit any of the Company or its subsidiaries to transfer, all or any part
of any of their business or property, other than: (i) transfers of inventory in the ordinary course of business; (ii) transfers
of non-exclusive licenses and similar arrangements for the use of the property of the Company or its subsidiaries in the ordinary
course of business; or (iii) transfers of worn-out or obsolete equipment which was not financed by Western Alliance Bank;
|
|
|
|
|
●
|
Merge
or consolidate, or permit any of the Company or its subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of their subsidiaries to acquire, all or substantially all of the capital stock or
property of another person or suffer or permit a change in control;
|
|
|
|
|
●
|
Create,
incur, assume or be or remain liable with respect to any indebtedness, or permit any of their subsidiaries so to do, other
than indebtedness permitted under the loan and security agreement with Western Alliance Bank;
|
|
|
|
|
●
|
Create,
incur, assume or suffer to exist any lien with respect to any of the property of either of them (including without limitation,
their intellectual property), other than liens permitted under the loan and security agreement with Western Alliance Bank;
|
|
|
|
|
●
|
Pay
any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital
stock, or permit any of their subsidiaries to do so other than as permitted under the loan and security agreement with Western
Alliance Bank;
|
|
|
|
|
●
|
Directly
or indirectly acquire or own, or make any investment in or to any person, or permit any of their subsidiaries so to do, other
than investments permitted under the loan and security agreement with Western Alliance Bank;
|
|
|
|
|
●
|
Make
or contract to make, without Western Alliance Bank’s prior written consent, capital expenditures (including leasehold
improvements) or incur liability for rentals of property (including both real and personal property) in an aggregate amount
in any fiscal year in excess of $500,000; and
|
|
|
|
|
●
|
Make
any material changes to the Company’s organizational structure or identity.
|
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains statements that are not historical facts and are considered forward-looking within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements contain projections of our future
results of operations or of our financial position or state other forward-looking information. In some cases you can identify
these statements by forward-looking words such as “anticipate,” “believe,” “could,” “continue,”
“estimate,” “expect,” “intend,” “may,” “should,” “will,”
“would,” “plan,” “predict”, “projected” or the negative of such words or other
similar words or phrases.
Although
we believe that the expectations reflected in such forward-looking statements are reasonable, such expectations could prove to
have been incorrect. Important factors that could cause actual results to differ materially from our expectations (“cautionary
statements”) are disclosed under the section entitled “Risk Factors” and elsewhere in this prospectus supplement
and the accompanying prospectus and the information and documents incorporated by reference in this prospectus supplement. We
operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for
our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor,
or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking
statements. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances described in
this prospectus supplement, the accompanying prospectus, the information and documents incorporated by reference may not occur
and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements contained
or incorporated by reference in this prospectus supplement, the accompanying prospectus, the information and documents incorporated
by reference.
You
should read this prospectus supplement and the accompanying prospectus, together with the information incorporated herein and
therein by reference as described under the section entitled “Information Incorporated by Reference,” and the documents
that we reference in this prospectus supplement and the accompanying prospectus and have filed with the SEC as exhibits to the
registration statement on Form S-3, of which this prospectus supplement and the accompanying prospectus are a part, with the understanding
that our actual future results, levels of activity, performance and achievements may be materially different from what we expect.
We qualify all of our forward-looking statements by these cautionary statements.
All
subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified
in their entirety by these cautionary statements. These forward-looking statements should not be relied upon as representing our
views as of any subsequent date, and we undertake no obligation to update forward-looking statements to reflect events or circumstances
after the date they were made.
USE
OF PROCEEDS
Except
as described in any prospectus supplement or in any related free writing prospectus that we may authorize to be provided to you,
the net proceeds received by us from our sale of the securities described in this prospectus will be added to our general funds
and will be used for our general corporate purposes.
We estimate the net proceeds of Series A-1 Preferred Stock and Warrants by us in this offering, excluding
the proceeds, if any, from the exercise of the Warrants, after deducting the placement agent fees and estimated offering expenses
payable by us, will be approximately $2,780,000 at the Closing. We cannot predict when or if the Warrants will be exercised for
Common Stock, and it is possible that the Warrants may expire and never be exercised. These general corporate purposes may include
capital expenditures and additions to working capital. Notwithstanding the foregoing, we will not, directly or indirectly, use
the proceeds for the satisfaction of any of our indebtedness, (ii) the redemption or repurchase of any of our securities, or (iii)
the settlement of any outstanding litigation. Pending the application of the net proceeds, we may invest the proceeds in short-term,
interest-bearing instruments or other investment grade securities.
CAPITALIZATION
The
following table sets forth our cash and cash equivalents, long term liabilities and shareholders’ equity as of September
30, 2016:
|
●
|
On
an actual basis; and
|
|
|
|
|
●
|
On
an as adjusted basis to give effect to the sale of 3,000 shares of Series A-1 Preferred Stock and Warrants to purchase up
to 2,500,000 shares of Common Stock by us in this offering, excluding the proceeds, if any, from the exercise of the Warrants,
after deducting the placement agent fees and commissions and estimated offering expenses payable by us.
|
The
following table should be read in conjunction with “Summary Financial Data” included elsewhere in this prospectus
supplement and our consolidated financial statements and related notes which are incorporated by reference into this prospectus
supplement.
|
|
As of September 30, 2016
|
|
|
|
Actual
|
|
|
As Adjusted
|
|
|
|
(Dollars in thousands)
|
|
Cash and cash equivalents
|
|
$
|
6,461
|
|
|
$
|
9,241
|
|
|
|
|
|
|
|
|
|
|
Long term liabilities
|
|
$
|
432
|
|
|
|
432
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000 shares authorized; including 3,000 shares Series A-1 Convertible Preferred Stock authorized, as adjusted, issued and outstanding
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, $0.001 par value; 100,000,000 shares authorized; 45,043,730 shares (actual) issued and outstanding as of September 30, 2016 and 45,043,730 (adjusted) issued and outstanding as of September 30, 2016
|
|
$
|
45
|
|
|
|
45
|
|
Additional paid-in capital
|
|
|
181,954
|
|
|
|
184,954
|
|
Accumulated deficit
|
|
|
(171,305
|
)
|
|
|
(171,305
|
)
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity
|
|
$
|
10,694
|
|
|
$
|
13,694
|
|
The
outstanding share information in the table above is based on 45,043,730 shares outstanding as of September 30, 2016, and excludes
as of that date:
|
●
|
107,804
shares of treasury stock which the Company;
|
|
|
|
|
●
|
3,354,892
shares of our Common Stock issued as restricted stock to, or issuable upon the exercise of stock options by, our employees
and directors; the stock options have a weighted average exercise price of $5.37 per share;
|
|
|
|
|
●
|
1,155,001
shares of Common Stock issuable upon the vesting of restricted stock units outstanding;
|
|
|
|
|
●
|
9,475,360
shares of our Common Stock issuable upon the exercise of warrants outstanding with a weighted average exercise price of $1.61
per share; and
|
|
|
|
|
●
|
482,553
shares of our Common Stock available as of that date for future grant or issuance pursuant to our stock plans.
|
PRICE
RANGE OF COMMON STOCK
Our
Common Stock is listed on The Nasdaq Capital Market under the symbol “UNXL”. The quotations below reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
The
following table sets forth, for the periods indicated, the high and low closing sales prices of our Common Stock as reported on
The Nasdaq Capital Market:
|
|
High
|
|
|
Low
|
|
|
|
|
|
|
|
|
Fiscal Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
10.39
|
|
|
$
|
7.66
|
|
Second Quarter
|
|
$
|
9.22
|
|
|
$
|
4.90
|
|
Third Quarter
|
|
$
|
8.34
|
|
|
$
|
5.68
|
|
Fourth Quarter
|
|
$
|
6.39
|
|
|
$
|
4.50
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year ending December 31, 2015
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
7.12
|
|
|
$
|
5.00
|
|
Second Quarter
|
|
$
|
7.70
|
|
|
$
|
2.57
|
|
Third Quarter
|
|
$
|
2.66
|
|
|
$
|
0.92
|
|
Fourth Quarter
|
|
$
|
1.87
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year ending December 31, 2016
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
0.92
|
|
|
$
|
0.36
|
|
Second Quarter
|
|
$
|
2.58
|
|
|
$
|
0.92
|
|
Third Quarter
|
|
$
|
1.72
|
|
|
$
|
1.17
|
|
Fourth Quarter
|
|
$
|
1.65
|
|
|
$
|
0.85
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year ending December 31, 2017
|
|
|
|
|
|
|
|
|
First Quarter (through January 17, 2017
|
|
$
|
1.09
|
|
|
$
|
1.00
|
|
As of January 16,
2017, there were 1,008 holders of record of our Common Stock. On January 17, 2017, the last reported sale price
of our Common Stock on The Nasdaq Capital Market was $1.26 per share.
DIVIDEND
POLICY
We
have never declared or paid cash dividends on our capital stock. We do not anticipate paying any cash dividends on our Common
Stock for the foreseeable future. We currently intend to retain all available funds and future earnings, if any, to fund the development
and growth of our business. As a result, capital appreciation, if any, of our Common Stock will be our stockholders’ sole
source of potential gain for the foreseeable future.
As
of the date of this prospectus and for the past five (5) years, we have had no shares of preferred stock and therefore have not
declared or paid any dividends on preferred stock. Shares of Series A-1 Preferred Stock will not be entitled to receive any dividends,
unless and until specifically declared by our board of directors.
DILUTION
The
Company’s unaudited net tangible book value as of September 30, 2016 was $10.7 million, or $0.24 per share of Common Stock.
Net tangible book value per share of Common Stock represents the total amount of our tangible assets reduced by the total amount
of our liabilities and divided by the number of shares of Common Stock outstanding on September 30, 2016 of 45,043,730. Dilution
with respect to net tangible book value per share represents the difference between the amount per share paid by purchasers of
shares of Series A-1 Preferred Stock in this Offering and the net tangible book value per share of our Common Stock immediately
after this Offering.
After
giving effect to the sale of 3,000 shares of our Series A-1 Preferred Stock at the public offering price of $1,000 per share,
assuming the conversion of all of such 3,000 shares of the Series A-1 Preferred Stock into 2,000,000 shares of our Common Stock,
and after deducting placement agent fees and expenses and estimated offering expenses, our as adjusted net tangible book value
as of September 30, 2016 would have been approximately $13.6 million, or $0.29 per share. This represents an immediate increase
in net tangible book value of $0.05 per share to existing stockholders and immediate dilution of $1.21 per share to investors
purchasing our Series A-1 Preferred Stock in this Offering at the public offering price. The following table illustrates this
dilution on a per share basis:
Public offering price per share
|
|
$
|
1.50
|
|
Net tangible book value per share as of September 30, 2016
|
|
$
|
0.24
|
|
Increase in net tangible book value per share of Common Stock attributable to investors purchasing shares of Series A-1 Preferred Stock in this Offering
|
|
|
0.05
|
|
As adjusted net tangible book value per share of Common Stock after the Offering
|
|
|
0.29
|
|
Dilution per share of to investors purchasing our Series A-1 Preferred Stock in this Offering
|
|
$
|
1.21
|
|
The
outstanding share information in the table above is based on 45,043,730 shares of Common Stock issued and outstanding as of September
30, 2016, and excludes as of that date:
|
●
|
107,804
shares of treasury stock which the Company;
|
|
|
|
|
●
|
3,354,892
shares of our Common Stock issued as restricted stock to, or issuable upon the exercise of stock options by, our employees
and directors; the stock options have a weighted average exercise price of $5.37 per share;
|
|
|
|
|
●
|
1,155,001
shares of Common Stock issuable upon the vesting of restricted stock units outstanding;
|
|
|
|
|
●
|
9,475,360
shares of our Common Stock issuable upon the exercise of warrants outstanding with a weighted average exercise price of $1.61
per share; and
|
|
|
|
|
●
|
482,553
shares of our Common Stock available as of that date for future grant or issuance pursuant to our stock plans.
|
To
the extent that any outstanding options or warrants are exercised, new options are issued under our stock option plans or we otherwise
issue additional shares of Common Stock In the future at a price less than the public offering price, there may be further dilution
to purchasers of shares in this Offering.
DESCRIPTION
OF SECURITIES
In
this Offering, we are offering up to 3,000 shares of Series A-1 Preferred Stock and warrants to purchase up to 2,500,000 shares
of Common Stock as well as the shares of Common Stock that are issuable from time to time upon conversion of such Series A-1 Preferred
Stock and exercise of the Warrants. The maximum aggregate offering price is $3,000,000.
The
Closing of the Offering shall consist of the sale of 3,000 units at a sales price of $3,000,000, with each unit consisting of
one share of Series A-1 Preferred Stock sold together with a Warrant. This allows for the purchase of eight hundred thirty three
and one/third shares of Common Stock at an exercise price of $1.50 per share of Common Stock, subject to adjustment as provided
below. Each share of Series A-1 Preferred Stock shall be convertible into one share of Common Stock at a conversion ratio determined
by dividing the Stated Value of each share of Series A-1 Preferred Stock by the Conversion Price of $1.50 per share, subject to
adjustment as described below. Each Warrant shall be exercisable during the period commencing on the Initial Exercisability Date
and ending on the Expiration Date.
There
is no established public trading market for the Series A-1 Preferred Stock or the Warrants, and we do not expect any such market
to develop. In addition, we do not intend to apply for listing of the Series A-1 Preferred Stock or the Warrants on any national
securities exchange or other nationally recognized trading system.
Description
of Common Stock
The
material terms and provisions of our Common Stock are described under the caption “Description of the Securities that may
be Offered” starting on page 12 of the accompanying prospectus.
Description
of Series A-1 Preferred Stock
The
following is a summary of certain terms and provisions of the Series A-1 Certificate of Designations establishing the rights and
preferences of the Series A-1 Preferred Stock offered in this Offering. The description of the Series A-1 Preferred Stock contained
herein does not purport to be complete and is qualified in its entirety by reference to the Series A-1 Certificate of Designations
for the Series A-1 Preferred Stock, which will be filed as an exhibit to a Current Report on Form 8-K to be filed with the SEC
by us in connection with this offering.
General.
Our certificate of incorporation authorizes our board of directors to issue up to 10,000,000 shares of preferred stock, par
value $0.001 per share, of which no shares are issued and outstanding.
Subject
to the limitations prescribed by our certificate of incorporation, our board of directors is authorized to establish the number
of shares constituting each series of preferred stock and to fix the designations, powers, preferences and rights of the shares
of each of those series and the qualifications, limitations and restrictions of each of those series, all without any further
vote or action by our stockholders. Our board of directors has designated 3,000 of the 10,000,000 authorized shares of preferred
stock as Series A-1 Preferred Stock. When issued, the shares of Series A-1 Preferred Stock will be validly issued, fully paid
and non-assessable.
Rank.
The Series A-1 Preferred Stock will rank senior to:
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●
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3,354,892
shares of our Common Stock issued as restricted stock to, or issuable upon the exercise of stock options by, our employees
and directors; the stock options have a weighted average exercise price of $5.37 per share;
|
|
|
|
|
●
|
1,155,001
shares of Common Stock issuable upon the vesting of restricted stock units outstanding;
|
|
|
|
|
●
|
9,475,360
shares of our Common Stock issuable upon the exercise of warrants outstanding with a weighted average exercise price of $1.61
per share;
|
|
|
|
|
●
|
482,553
shares of our Common Stock available as of that date for future grant or issuance pursuant to our stock plans; and
|
|
|
|
|
●
|
all
of our issued and outstanding Common Stock, as well as all of our treasury shares;
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in
each case, as to distributions of assets upon our liquidation, dissolution or winding up whether voluntarily or involuntarily.
Voluntary
Conversions by Holders.
Each
holder of Series A-1 Preferred Stock (each, a “
Holder
”) may, at any time, elect to convert the Series A-1 Preferred
Stock into shares of our common stock at the Conversion Price (as defined below), subject to certain beneficial ownership limitations
described below. The Conversion Price is defined as $1.50 (subject to adjustment for stock splits, stock dividends, stock combinations,
recapitalizations or similar events).
Alternatively, at any time or times after the ninetieth calendar day after the initial issuance date of such
Series A-1 Preferred Stock (or such earlier date after such initial issuance date that the VWAP of our common stock is less than
or equal to $0.75 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or similar events)), each
Holder has the right to convert the Series A-1 Preferred Stock into shares of our common stock at the Alternate Conversion Price
(as defined below) instead of the Conversion Price, subject to certain beneficial ownership limitations. The “
Alternate
Conversion Price
” is defined as that price which is the lower of (i) the Conversion Price then in effect and (ii) the
greater of (A) $0.35 and (B) 93% of the volume weighted average price (“
VWAP
”) of our common stock on the trading
day immediately preceding the time of the delivery or deemed delivery of the applicable conversion notice.
Triggering
Event Redemption; Triggering Event Conversions.
The
Series A-1 Certificate of Designations contain certain triggering events including but not limited to: (i) the suspension from
trading or failure of our common stock to be trading or listed (as applicable) on The Nasdaq Capital Market, or one of the New
York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, or the Nasdaq Global Market, for a period of five consecutive
trading days, (ii) our failure to timely deliver shares of common stock upon conversion of the Series A-1 Preferred Stock; (iii)
our failure to make payments when due under the Series A-1 Certificate of Designations; and (iv) our bankruptcy or insolvency.
If
a triggering event occurs, each Holder may require us to redeem all or any number of the Series A-1 Preferred Stock, in cash,
at a redemption price equal to the greater of (i) 125% of the $1,000 stated value of each such share of Series A-1 Preferred Stock
being redeemed and (ii) the intrinsic value of the shares of our common stock then issuable upon conversion of such shares of
Series A-1 Preferred Stock being redeemed (without regard to any limitations on conversion in the Series A-1 Certificate of Designations).
At any time a triggering event has occurred through the earlier of (x) the date of the cure of such triggering
event and (y) the 20
th
trading day after we have delivered written notice to such Holder of such triggering event, each
Holder may also alternatively convert Series A-1 Preferred Stock into shares of our common stock at the Triggering Event Conversion
Price (as defined below) instead of the Conversion Price, subject to certain beneficial ownership limitations described below.
The “
Triggering Event Conversion Price
” is defined as that price which is defined as that price which is the
lower of (i) the Conversion Price then in effect and (ii) the greater of (A) $0.35 and (B) the higher of (I) 85% of the lowest
VWAP of our common stock on any trading day during the five consecutive trading day period ending and including the trading day
immediately preceding the delivery of the applicable conversion notice and (II) $0.35.
The
Company’s Mandatory Conversion Right
.
Subject
to the satisfaction of customary equity conditions and the beneficial ownership limitations described below, at any time the VWAP
of our common stock listed on The Nasdaq Capital Market is greater than or equal to the Conversion Price then in effect, we may,
by written notice, require each Holder to convert up to its pro rata share of 20% of the aggregate dollar trading volume
(as reported on Bloomberg, LP) of our common stock on the Nasdaq Capital Market over the ten consecutive trading day period immediately
prior to the date of notice of such mandatory conversion. The actual date of mandatory conversion will occur on the date we specify
in our mandatory conversion notice, which shall be no less than two (2) trading days and no more than ten (10) trading days following
the date of such mandatory conversion notice.
Fundamental
Transactions; Change of Control.
The
Series A-1 Certificate of Designations prohibits us from entering into specified transactions involving a change of control, unless
the successor entity assumes in writing all of our obligations under the Series A-1 Certificate of Designations under a written
agreement.
In
the event of transactions involving a change of control, each Holder will have the right to require us to redeem all or any number
of the Series A-1 Preferred Stock it holds at a price, in cash, equal to the greater of 125% of the stated value of the shares
of Series A-1 Preferred Stock being redeemed and the intrinsic value of the shares of our common stock then issuable upon conversion
of the shares of Series A-1 Preferred Stock being redeemed.
Redemption
at the Company’s Election
.
We
may redeem the Series A-1 Preferred Stock at any time, in cash, at a redemption price equal to the greater of 125% of the stated
value of the shares of Series A-1 Preferred Stock being redeemed and the intrinsic value of the shares of our common stock then
issuable upon conversion of the shares of Series A-1 Preferred Stock being redeemed.
Holder
Optional Redemption after January 20, 2018.
At
any time on or after January 20, 2018, we may be required, at the option of each Holder to redeem the Series A-1 Preferred
Stock, in cash, at a redemption price equal to the greater of 125% of the stated value of the shares of Series A-1 Preferred Stock
being redeemed and the intrinsic value of the shares of our common stock then issuable upon conversion of the shares of Series
A-1 Preferred Stock being redeemed.
Limitations
on Conversion and Issuance.
The
Series A-1 Preferred Stock may not be converted and shares of our common stock may not be issued under the Series A-1 Certificate
of Designations with respect to such Series A-1 Preferred Stock if, after giving effect to the conversion or issuance, a Holder
together with its affiliates would beneficially own in excess of 4.99% of our outstanding shares of common stock. At each Holder’s
option, the blocker may be raised or lowered to any other percentage not in excess of 9.99%.
Dividends.
Shares
of Series A-1 Preferred Stock will not be entitled to receive any dividends, unless and until specifically declared by our board
of directors.
Liquidation
Preference.
In
the event of our liquidation, dissolution or winding up, Holders of shares of Series A-1 Preferred Stock will receive a payment,
before any proceeds are distributed to the Holders of our common stock, of an amount per share of Series A-1 Preferred Stock equal
to the sum of (i) the Black-Scholes Value (as defined in the Warrants) with respect to the outstanding portion of all Warrants
held by such Holder (without regard to any limitations on the exercise thereof) as of the date of such event and (ii) the greater
of (A) 125% of the stated value of such Series A-1 Preferred Stock on the date of such payment and (B) the amount per share such
Holder would receive if such Holder converted such shares of Series A-1 Preferred Stock into our common stock immediately prior
to the date of such payment.
Voting
Rights.
Shares
of Series A-1 Preferred Stock will generally have no voting rights, except as required by law and except that the consent of the
holders of a majority of the then outstanding shares of Series A-1 Preferred Stock (the “
Required Holders
”),
will be required to:
(i)
permit the Company to authorize or issue any additional or other shares of capital stock other than Series A-1 Preferred Stock,
which shall rank
pari passu
with the Series A-1 Preferred Stock that is:
(a)
of senior rank to such Series A-1 Preferred Stock in respect of the preferences as to dividends, distributions and payments upon
the liquidation, dissolution and winding up of the Company (collectively, the “
Senior Preferred Stock
”),
(b)
of
pari passu
rank to such preferred shares in respect of the preferences as to dividends, distributions and payments upon
the liquidation, dissolution and winding up of the Company (collectively, the “
Parity Stock
”) or
(c)
any junior stock having a maturity date (or any other date requiring redemption or repayment of such shares of junior stock) that
is prior to the Maturity Date, or
(ii)
amend or repeal any provision of, or add any provision to, our certificate of incorporation or bylaws, or file any certificate
of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change
in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit of the Series A-1 Preferred
Stock;
(iii)
increase or decrease (other than by conversion) the authorized number of Series A-1 Preferred Stock;
(iv)
create or authorize (by reclassification or otherwise) any new class or series of Senior Preferred Stock or Parity Stock;
(v)
purchase, repurchase or redeem any shares of junior stock (other than pursuant to the terms of the Company’s equity incentive
plans and options and other equity awards granted under such plans);
(vi)
pay dividends or make any other distribution on any shares of any junior stock;
(vii)
issue additional shares of Series A-1 Preferred Stock; or
(viii)
circumvent a right of the Series A-1 Preferred Stock.
Consent
Rights.
(a)
Exchange Transactions
. For so long as any shares of Series A-1 Preferred Stock remain outstanding, we may not, directly or
indirectly, without the prior written consent of the Required Holders, solicit, initiate, encourage or accept any other inquiries,
proposals or offers from any person (other than a holder of then outstanding Series A-1 Preferred Stock) relating to any exchange
(i) of any security of the Company or any of our subsidiaries for any other security of the Company or any of our subsidiaries,
except to the extent (x) consummated pursuant to an exchange registered under a registration statement of the Company filed pursuant
to the Securities Act of 1933, as amended (the “
Securities Act
”), and declared effective by the SEC or (y)
an exchange that is exempt from registration pursuant to an exemption provided under the Securities Act (other than Section 3(a)(10)
of the Securities Act) or (ii) of any indebtedness or other securities of, or claim against, the Company or any of our subsidiaries
relying on the exemption provided by Section 3(a)(10) of the Securities Act (any such transaction described in clauses (i) or
(ii), an “
Exchange Transaction
”), and the Company shall not enter into any such Exchange Transactions with
any person other than a holder of then-outstanding Series A-1 Preferred Stock.
(b)
Third Party Exchange Transfers
. For so long as any Series A-1 Preferred Stock remain outstanding, we may not, directly or
indirectly, without the prior written consent of the Required Holders, cooperate in any way, assist or participate in, facilitate
or encourage any effort or attempt by any person (other than a holder of then-outstanding Series A-1 Preferred Stock) to effect
any acquisition of securities or indebtedness of, or claim against, the Company by such person from an existing holder of such
securities, indebtedness or claim in connection with a proposed exchange of such securities or indebtedness of, or claim against,
the Company (whether pursuant to Section 3(a)(9) or 3(a)(10) of the Securities Act or otherwise) (a “
Third Party Exchange
Transfer
”).
(c)
No Variable Rate Transactions
. For so long as at least three hundred Series A-1 Preferred Stock remain outstanding, neither
the Company nor any of its subsidiaries may effect or enter into an agreement to effect any Subsequent Placement involving a variable
rate transaction without the prior written consent of the Required Holders. “
Subsequent Placement
” means the
sale, grant of any option to purchase, or other disposition of by the Company, directly or indirectly, of any of the Company’s
or our subsidiaries’ equity or equity equivalent securities, including, without limitation, any convertible securities,
preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible
into or exchangeable or exercisable for Common Stock or convertible securities.
(d)
Additional Series A-1 Preferred Stock; Default Issuances
. We may not, directly or indirectly, without the prior
written consent of the Required Holders of the Series A-1 Preferred Stock then outstanding, (i) issue any Series A-1 Preferred
Stock, subject to limited exceptions, or (ii) issue any other securities that would cause a breach or default under the Certificate
of Designations, Preferences and Rights of the Series A-1 Preferred Stock, as then in effect, or the Warrants.
Transfer
of Series A-1 Preferred Stock.
A Holder may transfer some or all of its shares of Series A-1 Preferred Stock without the consent
of the Company.
No
Exchange Listing of Preferred Shares.
We do not plan on making an application to list the Series A-1 Preferred Stock on The
Nasdaq Capital Market, any national securities exchange or other nationally recognized trading system. Our common stock issuable
upon conversion of shares of Series A-1 Preferred Stock is listed on The Nasdaq Capital Market.
Description
of Warrants to Purchase Common Stock
The
following summary of certain material terms and provisions of the Warrants offered in this Offering is subject to changes based
on the final terms of the Offering. It summarizes only those aspects of the Warrants that we believe will be most important to
your decision to invest in the Warrants. You should keep in mind, however, that it is the terms in the Warrants, and not this
summary that define your rights as a holder of the Warrants. There may be other provisions in the Warrants that are also important
to you. You should read the forms of the Warrants for a full description of the terms of the warrants. Further, the following
summary is subject to, and qualified in its entirety by, the form of Warrant, which will be filed as an exhibit to a Current Report
on Form 8-K to be filed by us with the SEC in connection with this Offering. You should review a copy of the form of Warrant for
a complete description of the terms and conditions applicable to the Warrants.
Shares
of our Common Stock Issuable upon Exercise of Warrants.
The Warrants entitle the
holders of the Warrants to purchase, commencing on July 20, 2017, in the aggregate, up to 2,500,000 shares of our common
stock (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or similar events).
Expiration
Date.
The warrants will expire
on July 20, 2022.
Exercise
Price; July 20, 2017 Adjustment.
The
initial exercise price of the Warrants is $1.50 (subject to adjustment for stock splits, stock dividends, stock combinations,
recapitalizations or similar events). If as of July 20, 2017, the exercise price then in effect is greater than the greater
of (x) $1.26 and (y) 93% of the lowest VWAP of our common stock during the period commencing on January 20, 2017
through July 19, 2017 (the “
July 20, 2017 Adjustment Price
”), the exercise price shall be lowered to
such July 20, 2017 Adjustment Price.
The
warrants may be exercised for cash, provided that, if there is no effective registration statement available registering the exercise
of the warrants, the warrants may be exercised on a cashless basis.
Limitations
on Exercise.
The
warrants may not be exercised if, after giving effect to the exercise, the holder of the warrant together with its affiliates
would beneficially own in excess of 4.99% of our outstanding shares of common stock. At each holder’s option, the warrant
blocker applicable to the exercise of the warrants may be raised or lowered to any other percentage not in excess of 9.99%.
Fundamental
Transactions.
The
warrants prohibit us from entering into specified transactions involving a fundamental transaction, unless the successor entity
assumes all of our obligations under the Warrants under a written agreement before the transaction is completed.
In
the event of a fundamental transaction, each holder of Warrants will have the right to require us to redeem all or any number
of the Warrants at the Black-Scholes value of such Warrants.
Transferability.
Subject
to applicable laws, the Warrants may be transferred at the option of the holders upon surrender of the Warrants to us together
with the appropriate instruments of transfer.
No
Exchange Listing of Warrants.
There
is no established public trading market for the Warrants. We do not plan on making an application to list the Warrants on any
national securities exchange or other nationally recognized trading system.
Rights
as a Stockholder.
Except
as otherwise provided in the Warrants or by virtue of such holder’s ownership of shares of our common stock, the holder
of a Warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder
exercises the Warrant.
PLAN OF DISTRIBUTION
We have entered into a
securities purchase agreement (the “
Securities Purchase Agreement
”) with investors for the purchase of units,
with each unit consisting of one share of Series A-1 Preferred Stock and a Warrant to purchase eight hundred thirty three and one/third
shares of Common Stock. The Securities Purchase Agreement contemplates the Closing occurring upon the sale of an aggregate of 3,000
units to the investors, subject to the satisfaction of the closing conditions set forth therein. This prospectus supplement relates
solely to the securities being offered and sold in connection with the Closing. In connection with this Offering, we have engaged
The Benchmark Company, LLC as our sole placement agent (the “
Placement Agent
”) subject to the terms and conditions
of an engagement agreement dated December 21, 2016. The Placement Agent is not purchasing or selling any of our shares of Preferred
Stock or any Warrants offered by this prospectus supplement, nor is it required to arrange the purchase or sale of any specific
number or dollar amount of units, Preferred Stock or Warrants, but has agreed to use its best efforts to arrange for the sale of
all of our shares of Preferred Stock, and the accompanying Warrants, offered hereby. We or the Placement Agent may distribute this
prospectus supplement and the accompanying prospectus electronically.
In connection with the
Offering, we shall pay the Placement Agent a cash payment (the “
Agent Fee
”) equal to 4.5% of the gross proceeds
received or aggregate purchase price paid for the shares of Series A-1 Preferred Stock and the accompanying Warrants sold during
the Offering. The Placement Agent shall be paid at Closing, from the gross proceeds of the securities sold.
In addition to the Agent Fee, we have agreed to pay the Placement Agent for all reasonable travel and other
out-of-pocket expenses incurred in connection with the Placement Agent’s engagement, including the reasonable fees and expenses
of the Placement Agent’s counsel. We have also agreed to reimburse the reasonable expenses of counsel to the investors, not
to exceed $25,000. We estimate that expenses payable by us in connection with this Offering in addition to the Agent Fee will be
approximately $85,000. After deducting certain fees due to the Placement Agent and our estimated Offering expenses, we expect the
net proceeds from this Offering will be approximately $2,780,000.
We have agreed to indemnify
the Placement Agent against liabilities arising out of or relating to the Placement Agent’s activities on our behalf in connection
with this Offering, except to the extent that such liabilities arise out of the Placement Agent’s gross negligence or willful
misconduct. We have agreed to contribute to payments the Placement Agent may be required to make in respect of such liabilities.
The Placement Agent and
its affiliates have provided and may in the future provide certain commercial banking, financial advisory or investment banking
services for us for which they have received and may in the future receive fees, but there are no current arrangements between
us. The Placement Agent and its affiliates may also from time to time in the future engage in transactions with us and perform
services for us in the ordinary course of their business, but there are no current arrangements between us. The Placement Agent
shall retain the right for a period of twelve (12) months following the date of the Placement Agent Agreement, to participate in
our next underwritten public offering of securities in an amount equal to or greater than its participation in our June 2016 underwritten
public offering.
The Placement Agent may
be deemed to be an “underwriter” within the meaning of the Securities Act.
The transfer agent and
registrar for our Series A-1 Preferred Stock and Common Stock is Securities Transfer Corporation, whose address is 2591 Dallas
Parkway, Suite 102. Frisco, TX 75034 469-633-0101.
For the complete terms
of the Securities Purchase Agreement, you should refer to the form Securities Purchase Agreement which is filed as an exhibit to
a Current Report on Form 8-K filed with the SEC in connection with this Offering and is incorporated by reference into the Registration
Statement of which this prospectus supplement is part.
LEGAL MATTERS
The validity of the Series
A-1 Preferred Stock, the accompanying Warrants and the Common Stock underlying each of them offered by this prospectus supplement
and the accompanying prospectus will be passed upon for us by Crowell & Moring LLP, San Francisco, California.
EXPERTS
The consolidated financial
statements of UniPixel as of December 31, 2015 and 2014 and for each of the two years in the period ended December 31, 2015, incorporated
in this prospectus supplement by reference to the UniPixel Annual Report on Form 10-K for the year ended December 31, 2015, have
been so incorporated in reliance on the report of PMB Helin Donovan, LLP, an independent registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
Such consolidated financial
statements are incorporated herein by reference in reliance upon such reports given on the authority of such firms as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus supplement and the accompanying
prospectus are part of the registration statement on Form S-3 we filed with the SEC under the Securities Act and do not contain
all the information set forth in the registration statement. Certain information in the registration statement has been omitted
from this prospectus in accordance with the rules of the SEC. Whenever a reference is made in this prospectus supplement or the
accompanying prospectus to any of our contracts, agreements or other documents, the reference may not be complete and you should
refer to the exhibits that are a part of the registration statement or the exhibits to the reports or other documents incorporated
by reference in this prospectus supplement and the accompanying prospectus for a copy of such contract, agreement or other document.
Because we are subject to the information and reporting requirements of the Exchange Act we file annual, quarterly and current
reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at
the SEC’s website at
http://www.sec.gov
. The website, and, except as expressly incorporated herein, the information
contained therein, is not a part of this prospectus supplement. 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 further information
on the operation of the Public Reference Room.
INFORMATION INCORPORATED BY REFERENCE
The SEC and applicable
law permits us to “incorporate by reference” into this prospectus information that we have or may in the future file
with or furnish to the SEC. This means that we can disclose important information by referring you to those documents. You should
read carefully the information incorporated herein by reference because it is an important part of this prospectus. We hereby incorporate
by reference the following documents into this prospectus:
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed with the SEC on March 30, 2016;
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Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, as filed with the SEC on May 5, 2016;
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Our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2016, as filed with the SEC on August 11, 2016;
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Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, as filed with the SEC on November 10, 2016;
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Our Current Reports
on Form 8-K filed with the SEC on January 4, 2016, January 14, 2016, March 18, 2016, April 6, 2016, April 21, 2016, May 5,
2016, May 26, 2016 (as amended on May 27, 2016), May 27, 2016, June 2, 2016, June 10, 2016 (Items 5.02, 5.07, and 9.01
only), October 28, 2016, December 28, 2016, January 18, 2017 and January 18, 2017; and
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The description of our Common Stock included in our Registration Statement on Form 8-A/A, as filed with the SEC on December 9, 2010 pursuant to Section 12(b) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.
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We also incorporate by
reference all documents that we file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after
the effective date of this registration statement and prior to the sale of all shares of Series A-1 Preferred Stock, the accompanying
Warrants and the Common Stock underlying each of them, to which this prospectus relates or the termination of the registration
statement. Nothing in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC.
Any statement contained
in a document incorporated by reference into this prospectus shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this prospectus, any prospectus supplement or in any other subsequently
filed document which is also incorporated in this prospectus modifies or replaces such statement. Any statements so modified or
superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You may request a copy
of these documents, which will be provided to you at no cost, by writing or telephoning us at:
4699 Old Ironsides Drive
Santa Clara, California 95054 USA
(281) 825-4500
You should rely only on
the information contained in this prospectus, including information incorporated by reference as described above, or any prospectus
supplement or that we have specifically referred you to. We have not authorized anyone else to provide you with different information.
You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents or that any document incorporated by reference is accurate as of any date other than its
filing date. You should not consider this prospectus to be an offer or solicitation relating to the securities in any jurisdiction
in which such an offer or solicitation relating to the securities is not authorized. Furthermore, you should not consider this
prospectus to be an offer or solicitation relating to the securities if the person making the offer or solicitation is not qualified
to do so, or if it is unlawful for you to receive such an offer or solicitation.
PROSPECTUS
$75,000,000
Common Stock, Preferred Stock, Warrants and
Units
and
4,159,891 Shares of Common Stock Offered
by Selling Stockholders
By this prospectus and
an accompanying prospectus supplement, we may from time to time offer and sell, in one or more offerings, up to $75,000,000 in
any combination of common stock, preferred stock, warrants, and units. We will provide you with more specific terms of these securities
in one or more supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement carefully
before you invest.
Also, the selling stockholders
identified in this prospectus may, from time to time, offer and sell up to an aggregate of 4,159,891 shares of our common stock,
which includes (i) 1,867,252 shares that the selling stockholders have the right to receive upon the conversion of $15,000,000
principal amount and interest on 9% Senior Secured Convertible Notes due April 16, 2016, which were issued to selling stockholders
in a private placement that closed on April 16, 2015 (the “Notes”); and (ii) 425,387 shares (out of a total of 1,151,121
shares) issuable upon exercise of warrants we issued in conjunction with the sale of the Notes, which we refer to as the “Warrants”.
In addition, the aggregate shares being registered for the selling stockholders includes 1,867,252 shares of our common stock required
to be registered under the terms of the securities purchase agreement and registration rights agreement executed in connection
with the sale of the Notes and Warrants. To the extent the shares offered by this prospectus are not issued pursuant to the terms
of the Notes and the Warrants, we will deregister them. See the section of this prospectus titled “Selling Stockholders”.
We or any selling stockholder
may offer these securities from time to time in amounts, at prices and on other terms to be determined at the time of offering.
We or any selling stockholder may offer and sell these securities to or through underwriters, dealers or agents, or directly to
investors, on a continuous or delayed basis. The supplements to this prospectus will provide the specific terms of the plan of
distribution for any sales we make. The price to the public of such securities and the net proceeds we expect to receive from such
sale will also be set forth in a prospectus supplement. We will not receive any proceeds from the sale of our common stock by the
selling stockholders.
We have agreed to pay certain
expenses in connection with the registration of the shares. The selling stockholders will pay all underwriting discounts and selling
commissions, if any, in connection with the sale of the shares.
Our common stock is traded
on the NASDAQ Capital Market under the symbol “UNXL.” On July 2, 2015, the last reported sale price of our common stock
on the NASDAQ Capital Market was $ 2.55 per share.
An investment in our
common stock involves a high degree of risk. See “Risk Factors” on page 8 of this prospectus for more information on
these risks.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is July 10, 2015.
Table of Contents
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part
of a registration statement filed with the Securities and Exchange Commission (the “SEC”) using a “shelf”
registration process. Under this shelf process, we or any selling stockholder may sell the securities described in this prospectus
in one or more offerings. This prospectus provides you with a general description of the securities which may be offered. Each
time we offer securities for sale, we will provide a prospectus supplement that contains specific information about the terms of
that offering. If required for the particular sale, we will also provide a prospectus supplement when a selling stockholder offers
securities for sale hereunder that contains specific information about the terms of that offering. Any prospectus supplement may
also add or update information contained in this prospectus. You should read both this prospectus and any prospectus supplement
together with additional information described below under “Where You Can Find More Information” and “Information
Incorporated by Reference.”
The registration statement
that contains this prospectus (including the exhibits thereto) contains additional important information about us and the selling
stockholders and the securities we or any selling stockholder may offer under this prospectus. Specifically, we have filed certain
legal documents that establish the terms of the securities offered by this prospectus as exhibits to the registration statement.
We will file certain other legal documents that establish the terms of the securities offered by this prospectus as exhibits to
reports we file with the SEC. You may obtain copies of that registration statement and the other reports and documents referenced
herein as described below under the heading “Where You Can Find More Information.”
You should rely only on
the information contained or incorporated by reference in this prospectus and in any prospectus supplement. We have not authorized
any other person to provide you with different information. If anyone provides you with different or inconsistent information,
you should not rely on it. We are not making offers to sell or solicitations to buy the securities in any jurisdiction in which
an offer or solicitation is not authorized or in which the person making that offer or solicitation is not qualified to do so or
to anyone to whom it is unlawful to make an offer or solicitation. You should not assume that the information in this prospectus
or any prospectus supplement, as well as the information we file or previously filed with the SEC that we incorporate by reference
in this prospectus or any prospectus supplement, is accurate as of any date other than its respective date. Our business, financial
condition, results of operations and prospects may have changed since those dates.
In this prospectus, unless
the context otherwise requires, references to “we,” “us,” “our,” “the Company”
or “Uni-Pixel” refer to Uni-Pixel, Inc. and its subsidiaries.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and any
accompanying prospectus supplement, including the documents that we incorporate by reference, may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking statements
in this prospectus and any accompanying prospectus supplement include, without limitation, statements related to our plans, strategies,
objectives, expectations, intentions and adequacy of resources. Investors are cautioned that such forward-looking statements involve
risks and uncertainties including, without limitation, the following: (i) our plans, strategies, objectives, expectations and intentions
are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to
manage growth and competition; and (iii) other risks and uncertainties indicated from time to time in our filings with the SEC.
Important factors that could cause actual results to differ materially from those indicated in the forward-looking statements include,
but are not limited to, the rate and degree of market acceptance of our products, our ability to develop and market new and enhanced
products, our ability to obtain financing as and when we need it, competition from existing and new products and our ability to
effectively react to other risks and uncertainties described from time to time in our SEC filings, such as fluctuation of quarterly
financial results, reliance on third party manufacturers and suppliers, litigation or other proceedings, government regulation
and stock price volatility.
In some cases, you can
identify forward-looking statements by terminology such as “may,’‘ “will,’‘ “should,’‘
“could,’‘ “expects,’‘ “plans,’‘ “intends,’‘ “anticipates,’‘
“believes,’‘ “estimates,’‘ “predicts,’‘ “potential,’‘ or
“continue’‘ or the negative of such terms or other comparable terminology. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of
the date hereof. We do not undertake any obligation to publicly update or review any forward-looking statement.
OUR BUSINESS
This is only a summary
and may not contain all the information that is important to you. You should carefully read both this prospectus and any accompanying
prospectus supplement and any other offering materials, together with the additional information described under the heading “Where
You Can Find More Information.”
About Uni-Pixel, Inc.
We believe we are one of
the technology leaders in the optical design and manufacturing of large area microstructured polymer film materials and related
technologies for the display, flexible electronics, energy, transportation and entertainment industries. Our microstructured polymer
films, which we refer to as Performance Engineered Films (PEFs), are designed to lower the cost and improve functionality and performance
of devices in the markets they address. We make transparent conductive films and flexible electronic films based on our proprietary
manufacturing process for high volume, roll to roll printing of flexible thin-film conductor patterns. The process offers precision
micro-electronic circuit patterning and modification of surface characteristics over a large area on an ultra-thin, clear, flexible,
plastic substrate. These films may be incorporated into touch sensors, capacitive switches, general lighting, automotive, antenna,
display and shielding applications. We intend to sell the touch screen films, under the brand, as sub-components of a touch sensor
module.
In addition to the flexible
electronic films described above, we are developing a hard coat resin that can be applied using film, spray or inkjet coating methods
for applications as protective cover films, a cover lens replacement or a conformal hard coat for plastic components. We plan to
sell our hard coat resin and optical films under the Diamond Guard™ brand.
Recent Developments
Atmel Corporation Asset Acquisition and
License Agreements
On April 16, 2015 (the
“Closing Date”), the Company’s wholly-owned subsidiary, Uni-Pixel Displays, Inc. (“Displays”), acquired
from Atmel Corporation (“Atmel”), pursuant to the terms of a Purchase and Sale Agreement, a Patent License Agreement,
an IP License Agreement, a Bill of Sale and Assignment and Assumption Agreement and two leases for real property, certain assets
used for the production of capacitive touch sensors comprised of fine lines of copper metal photo lithographically patterned and
plated on flexible plastic film (the “Touch Sensors”). $450,000 was paid for the machinery, parts and equipment needed
to manufacture the Touch Sensors and the existing inventory on hand. Displays paid this amount with a secured promissory note due
on or before the earlier of (i) the second anniversary of the Closing Date or (ii) the sale of equity and/or debt securities after
the Closing Date pursuant to which Displays or any affiliate of ours receives gross proceeds of no less than $5 million. While
the promissory note is secured, the security interest will be subordinate to the security interest held by the Investors, as discussed
below. Interest accrues on the unpaid principal amount at a rate equal to 2% per annum compounded semi-annually and is to be paid
in arrears semi-annually, commencing with the six-month anniversary of the Closing Date. Displays has granted to Atmel a security
interest in the purchased assets and all accounts receivable subsequently arising from Display’s manufacture and sale of
Touch Sensors and all proceeds therefrom. Pursuant to the Purchase and Sale Agreement, Displays assumed certain liabilities of
Atmel, including open purchase and supply orders, related to the Touch Sensor business.
Through the Patent License
Agreement, Atmel licensed to Displays a non-sublicensable, worldwide, royalty-bearing license under its Touch Sensors patents to
make or have made, use, offer for sale, sell, and import the Touch Sensors. In consideration for this license, Displays agreed
to pay an annual royalty fee during the initial five year term of the license (the “Initial Term”) of the greater of
$3.25 million or 3.33% of the total net sales (as defined in the Patent License Agreement) of the Touch Sensors during the Initial
Term. Displays has the right to renew the license for a term of 10 years. If Displays exercises this right, the annual royalty
fee will consist of 2.5% of the total net sales of the Touch Sensors until it reaches a total of $16.75 million, at which time
no further annual royalty fees will be due. Upon execution of the Patent License Agreement, Displays paid a non-refundable, non-returnable
prepayment of minimum annual royalty fees of $9.33 million (the “Royalty Prepayment”). The Royalty Prepayment will
be applied to the annual royalty fees Displays owes under the Patent License Agreement. If, during the Initial Term, Displays’
cash balances as of the quarter end immediately prior to the date of the royalty period to which an unpaid annual royalty relates
is less than $30 million, it may pay the annual royalty fee with a secured promissory note. If Displays decides to pay the annual
royalty fee with a secured promissory note, the security interest will be subordinate to the security interest held by the Investors,
as discussed below. Atmel has agreed that it will not enter into a license agreement for the licensed patents that is effective
prior to the second anniversary of the Closing Date.
Through the IP License
Agreement, Atmel licensed to Displays a non-sublicensable, worldwide, royalty-free license to the intellectual property necessary
to make or have made, use, offer for sale, sell, and import the Touch Sensors. The term of the IP License Agreement is co-extensive
with the term of the Patent License Agreement. Atmel has agreed that it will not enter into a license agreement for the licensed
intellectual property that is effective prior to the second anniversary of the Closing Date.
As part of the asset acquisition,
Displays also entered into leases with Atmel Corporation for Building 2 and Building 4, both of which are located at 1150 E. Cheyenne
Mountain Boulevard, Colorado Springs, Colorado. The term of each lease is 18 months (the “Primary Lease Term”). The
term of each lease may be extended for two additional six month periods. During the Primary Lease Term, the initial base rent for
each of Building 2 and Building 4 will be $100. During the first renewal term, the monthly base rent for Building 2 will be $5,625
and during the second renewal term the monthly base rent will be $8,437.50. During the first renewal term, the monthly base rent
for Building 4 will be $39,375 and during the second renewal term the monthly base rent will be $59,062.50. Aside from the base
rent, Displays is responsible for the payment of its share of operating expenses attributable to the buildings, real estate taxes
attributable to the buildings, sales and personal property taxes, utilities and additional services provided by Atmel (as defined
in the leases). We believe that Building 2 and Building 4 are currently suitable for the operations related to the manufacture
and distribution of the Touch Sensors.
Displays also acquired
from CIT Technology Limited, an FLT (Fine Line Technology) Patent License Agreement and an FLT (Fine Line Technology) Intellectual
Property License Agreement and entered into an agreement for the provision of manufacturing and technology transfer services.
The Financing
Concurrent with the consummation
of the transactions described above, on the Closing Date and pursuant to a Securities Purchase Agreement, we sold $15 million in
Senior Secured Convertible Notes (the “Notes”), together with warrants for the purchase of 1,151,121 shares of our
common stock (the “Warrants”), to two accredited investors (the “Investors”). The number of shares of common
stock subject to the Warrants equaled 65% of the number of shares of common stock the Investors would receive if the Notes were
converted at the Conversion Price (as defined below) on the trading day immediately prior to the Closing Date.
The Notes accrue simple
interest at the rate of 9% per year (“Interest”). The Notes together with all accrued and unpaid Interest are due and
payable on April 16, 2016 (the “Maturity Date”). The Investors may, at any time, elect to convert the Notes into shares
of our common stock at the conversion price, subject to certain beneficial ownership limitations. The conversion price will be
$8.47 per share (the “Conversion Price”), subject to adjustment as set forth in the Notes for stock splits, dividends,
recapitalizations and similar events, which equaled 110% of the last closing price of our common stock prior to the execution and
delivery of the Securities Purchase Agreement. The Conversion Price may also be adjusted in the event that the Investors accelerate
the payment of any installment amount or if an event of default, as defined in the Notes, occurs. On April 29, 2015 and May 14,
2015, one of the Investors exercised its right to accelerate the payment of $2,250,000 in principal amount and $50,625 in interest
and $1,300,000 in principal amount and $42,187.50 in interest, respectively. We issued 773,320 and 450,459 shares of common stock,
respectively, to pay these amounts. Please see the discussion titled “Private Placement of Convertible Notes and Warrants
– Redemption of the Notes” beginning on page 17 of this prospectus.
Each of the Notes is subject
to voluntary conversion, in whole or in part, into shares of our common stock at the option of the Investors.
Provided there has been
no Equity Conditions Failure, as defined in the Notes, we will pay the Installment Amount, as defined in the Notes, by converting
all or some of the Installment Amount into common stock. However, we may also, at our option, provided there has been no Equity
Conditions Failure, pay the Installment Amount by redeeming the Installment Amount in cash or by any combination of cash and common
stock.
In conjunction with the
issuance of the Notes and the Warrants, we agreed to (i) file a registration statement covering 200% of the maximum number of shares
underlying the Notes and the maximum number of shares underlying the Warrants and (ii) seek stockholder approval for the issuance
of all shares underlying the Notes and the Warrants within 60 days of closing.
We are to use commercially
reasonable efforts to have the registration statement declared effective within 90 days after the Closing Date. Delays in the effective
date of the registration statement, as well as the unavailability of the registration statement after the Closing Date or a failure
to keep our public information current (each, a “Registration Default”), will result in the Company paying an amount
of 1% of the purchase price on the occurrence of each such Registration Default and 1% per month (or a portion thereof pro rata)
that such Registration Default continues to exist. We are not required to pay Registration Delay Payments at times when the Investors
can freely sell our common stock pursuant to Rule 144 without restriction or limitation.
Investors in the offering
have the right to participate for no less than 35% of any future offering of our securities until the second anniversary of the
Closing Date.
So
long as we have satisfied, or the Investors have waived, certain conditions set forth in the Securities Purchase Agreement,
the
Investors have committed to investing an additional $5 million that will be funded on our request within ten trading days of (a)
our receipt of stockholder approval of the financing and (b) the day the registration statement is declared effective. For additional
information regarding the issuance and terms of those Notes and Warrants, see “Private Placement of Convertible Notes and
Warrants” below. The registration statement of which this prospectus is a part does not register any securities that the
Investors could receive if the additional $5 million is invested.
For a more complete discussion
of this transaction, please see the discussion titled “Private Placement of Convertible Notes and Warrants” beginning
on page 17 of this prospectus.
Our Proprietary Technologies
We focus our research and
development on projects that will generate short term revenue that will lead to long term high volume product purchases. In addition
to research and development, we may work on related projects if they are customer funded. Of our 35 employees, the majority have
degrees or advanced degrees in physics, mathematics, chemistry, materials science, or optics. Historically our development efforts
have yielded numerous patents, as well as trade secrets and manufacturing know how that we believe gives us a competitive advantage
with respect to our current intellectual properties. In May 2010, we sold 20 U.S. patents, 104 patent applications, and 23 foreign
patents. As of February 26, 2015, we have 6 U.S. patents issued, 1 Japanese patent issued, 1 Korean patent issued and 230 patent
applications filed. This includes 120 Paris Convention Treaty (PCT) patent applications which can still be individually filed in
up to 172 different countries, including the U.S. There are 52 applications filed already in the U.S. We have also filed 58 patent
applications in Taiwan, which is not a member of the PCT. All of the patent applications, barring unforeseen problems, are expected
to provide patent protection in many additional countries including China, Japan, South Korea, India and Europe.
Our patent-pending Copperhead
process uses a high-fidelity manufacturing process to create complex micro-electronic patterns that enable revolutionary new electronic
printed circuits, such as projected capacitive touch sensors. Uni-Pixel believes that the Copperhead process can dramatically simplify
and reduce the complexity, cost and risk of manufacturing touch sensors and other electronic circuit applications. We are targeting
films made by a combination of the Atmel XSense, the FLT and the Copperhead process as an alternative to traditional indium tin
oxide (“ITO”) coated transparent materials used in a variety of electronic products. By replacing the ITO in a display
device we can lower the device production cost, reduce the product thickness and weight, and improve the overall efficiency and
performance. Furthermore, this process is adaptive with polymer substrates and as a result may enable the production flexible displays.
Additionally, during the
development of our PEF technology we were able to produce an ultra-hard coat that we apply to base films and substrates to produce
our Diamond Guard® Film technology and product line. We believe our in house design and prototyping capabilities along with
our toll manufacturing partners allows us to be one of the low cost producers for micro-structured and hard coated films for our
markets of interest.
Our Target Markets
We are currently focusing
our efforts on applications of our PEFs in the following areas:
Transparent Electrically
Conductive Films
Our recent combination
of the Atmel XSense, the FLT and the Copperhead process enables us to enter a large and growing market for transparent touch screens.
We believe this technology is a superior replacement to ITO as the transparent conducting layer in a touch screen device. Based
upon calculations derived from DisplaySearch forecasts of the worldwide touch panel market, we believe that the worldwide film
market for touch sensors could be $3 billion-$5 billion dollars per year over the next five years. Our transparent electronically
conductive films can be produced based on the combination of the Atmel XSense, the FLT and the Copperhead process at low cost and
on large flexible polymer substrates. We believe this enables manufacturers to effectively produce large area touch screens at
commercially viable costs with enhanced performance and functionality. In addition, we believe that the insertion of this technology
into smaller devices will lead to thinner, lighter, lower cost and higher efficiency products. We intend to sell the touch screen
films as sub-components of a touch sensor module.
We are currently working
with touch screen manufacturers and end users to design products based on our technological achievements or know-how.
Diamond Guard Cover
Glass replacement and Protective Cover Films
We have designed, developed
and demonstrated large scale production of micro-structured and hard coated films for use as cover glass replacement and protective
cover films for touch and multi touch electronic computing devices. We are currently shipping our Diamond Guard hard coat to end
users both domestically and internationally. We believe that our Diamond Guard hard coat films are unique in the market as compared
to other similar products because our hard coat and surface treatments offer better functional specifications as compared to competitive
films. In addition to better features, our roll-to-roll production capabilities result in low production costs which allow us to
competitively price our product at or below the price of other products in the market today. We sell our films under the Diamond
Guard hard coat brand as well as private labels. We are currently in discussions with various original equipment manufacturers,
touch panel module manufacturers and consumer product manufacturers for incorporation of our product into their product lines,
although we cannot guarantee that any of these manufacturers will purchase our product.
Corporate Information
Our facilities and executive
offices are located at 8708 Technology Forest Place, Suite 100, The Woodlands, Texas, 77381, and our telephone number is (281)
825-4500. We were incorporated in Delaware on May 24, 2001. Additional information about us is available on our website at www.unipixel.com.
The information contained on or that may be obtained from our website is not, and shall not be deemed to be, a part of this prospectus.
Our common stock, par value $0.001 per share, is currently traded on The NASDAQ Capital Market under the ticker symbol “UNXL.”
For a description of our
business, financial condition, results of operations and other important information regarding us, we refer you to our filings
with the SEC incorporated by reference in this prospectus. For instructions on how to find copies of these documents, see “
Where
You Can Find More Information
.”
THE SELLING STOCKHOLDERS’ OFFERING
Common stock offered by the selling stockholders
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Up to 4,159,891(1) shares consisting of:
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1,770,956 shares issuable upon conversion of the Notes;
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96,296 shares issuable if all interest is paid in shares;
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425,387 shares (out of 1,151,121 shares) issuable upon exercise of the Warrants;
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1,867,252 additional shares contractually required to be registered and included in this prospectus as a 100% share reserve for the Notes.
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Common stock outstanding(1)
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14,230,757 shares as of June 30 , 2015; 18,294,352 shares after the offering, assuming full conversion of the Notes at the initial conversion price of $8.47 and full exercise of the Warrant shares being offered at the initial exercise price of $9.63 but excluding any shares potentially issuable as interest payments.(2)(3)
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Terms of the offering
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The selling stockholders will determine when and how they sell the common stock offered in this prospectus, as described in “Plan of Distribution.”
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Use of proceeds
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We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders listed in this prospectus under “selling stockholders.” To the extent proceeds are received upon exercise of the Warrants by the selling stockholders, we intend to use any such proceeds for general corporate and working capital purposes. See “Use of Proceeds.”
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Risk factors
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See “Risk Factors” beginning on page 8, for a discussion of factors you should carefully consider before deciding to invest in our common stock.
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NASDAQ Capital Market symbol
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UNXL
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(1) Of the 4,159,891 shares that could be resold
pursuant to this prospectus, 1,770,956 shares are issuable upon conversion of the Notes; 96,296 shares are issuable if all interest
is paid in shares; 425,387 shares are issuable upon exercise of the Warrant shares being offered; and 1,867,252 additional shares
are contractually required to be registered and included in this prospectus as a 100% share reserve. See “Risk Factors -
Risks Relating to the Private Placement of Notes and Warrants.” No one selling stockholder or group of affiliated stockholders
would hold more than 4.99% or 9.99%, as applicable, of our stock in this situation, and there are 2 selling stockholders.
(2) Does not include the following amounts
as of June 30 , 2015: (i) additional shares of common stock that could be issuable upon conversion of the Notes in the event that
shares of common stock are used to service interest on indebtedness; (ii) 725,734 additional Warrant shares that could be issued
if the selling stockholders exercised the Warrants; (iii) 1,860,077 shares of common stock issuable upon exercise of outstanding
options; (iv) 290,459 shares issuable upon exercise of outstanding warrants other than the Warrants and (v) 142,900 shares of common
stock underlying restricted stock awards that have not yet vested.
(3) The number of shares of common stock outstanding
on June 30 , 2015 includes a total of 1,311,692 shares of common stock issued to Hudson Bay Master Fund Ltd. for the payment of
$3,700,000 in principal amount and $167,437.50 in interest in accordance with the terms of the Notes. (See “Recent Developments
– The Financing” beginning at page 4 of this prospectus.) The number of shares of common stock after the offering is
based on the unpaid principal amount of the Notes, as of June 30 , 2015, of $11,300,000.
RISK FACTORS
Investing in our common
stock involves a high degree of risk. Please see the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K
and other filings we make with the SEC, which are incorporated by reference in this prospectus. Additional risk factors may be
included in a prospectus supplement relating to a particular offering of securities. Before making an investment decision, you
should carefully consider these risks as well as other information we include or incorporate by reference in this prospectus. The
risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also affect our business operations. These risks could materially affect our business,
results of operations or financial condition and cause the value of our securities to decline.
Risks Relating to the
Private Placement of Notes and Warrants
Our stockholders
will have a reduced ownership and voting interest after issuance of the shares issuable upon conversion of the Notes and exercise
of the Warrants and may exercise less influence over management.
In the event the holders
of the Notes and Warrants elect to exercise their conversion and/or exercise rights pursuant to these securities in full, and,
without taking into account any adjustment to the conversion price or exercise price of the Notes and Warrants, respectively, an
aggregate of 2,485,242 shares of our common stock could be issued upon conversion and exercise of the securities, based on $11,300,000,
the current principal amount of the Notes, without including shares issuable upon conversion of interest. To date, 1,311,692 shares
of common stock have been issued to one of the Noteholders for the accelerated payment of principal in the aggregate amount of
$3,700,000 and interest in the aggregate amount of $167,437.50 (the “Accelerated Payment Shares”). Based on 14,230,757
shares outstanding as of June 30 , 2015 (which includes the Accelerated Payment Shares) together with the 2,485,242 shares of common
stock that could be issued in the future, the number of shares owned by the holders of the Notes and Warrants would represent approximately
23% of the shares outstanding. In addition, to the extent we issue shares to service the debt, the ownership percentages of the
Noteholders would increase incrementally. As a result, our current stockholders as a group would own a substantially smaller interest
in us and may have less influence on our management and policies than they now have.
We could be required
to make substantial cash payments upon an event of default or change of control under the Notes described below.
The Notes provide for events
of default including, among others, payment defaults, cross defaults, material breaches of any representations or warranties, breaches
of covenants that are not cured within the applicable time period, failure to perform certain required activities in a timely manner,
failure to comply with the requirements under the Registration Rights Agreement described below, suspension from trading or failure
of our common stock to be listed on an eligible market for certain periods and certain bankruptcy-type events involving us or a
subsidiary.
Upon an event of default,
a holder of the Notes may require us to redeem all or any portion of the Notes (including all accrued and unpaid interest and all
interest that would have accrued), in cash, at a price equal to the greater of: (x) up to 115% of the amount being redeemed, and
(y) the product of (A) the amount being redeemed and (B) the quotient determined by dividing (I) the greatest closing sale price
of the shares of common stock from the event of default and ending on the date the holder delivers the redemption notice, by (II)
the lowest conversion price in effect during such period. Under the terms of the Notes, in the event of transactions involving
a change of control, the holder of a Note will have the right to require us to redeem all or any portion of the Note it holds in
cash, at a price with a redemption premium of 125% calculated by the formula specified in the Notes.
If either an event of default
or change of control occurs, our available cash could be seriously depleted and our ability to fund operations could be materially
harmed.
If the anti-dilution
provisions of the Warrants are triggered, there would be a decrease in the exercise price.
Although the initial exercise
price of the Warrants is $9.63, which was a premium to the price prior to the closing of $7.70, the Warrants contain provisions
that could adjust the exercise price downward. The Warrants contain a weighted average price protection provision that is operable
for the first year following issuance of the Warrants, and full ratchet protection for the remaining four years.
Our repayment obligations
to our selling stockholders under the Notes are secured by a perfected first priority security interest on all of our assets.
Our obligations to the
selling stockholders under the Notes are secured by a lien on all of our assets pursuant to a pledge and security agreement, which
was entered into with respect to the issuance of the Notes. If we default under the terms of the Notes, the selling stockholders
may exercise various remedies against us, including acceleration of the entire remaining principal amount of the Notes and all
accrued and unpaid interest thereon, and remedies against our collateral. An acceleration of the Notes or an exercise of remedies
against our assets as collateral could have a material adverse effect on our ability to conduct our business or could force us
to invoke legal measures to protect our business, including, but not limited to, for filing for protection under the U.S. Bankruptcy
Code.
Risks Relating to our Business
We may not be able to successfully integrate
the production of the Touch Sensors into our ongoing business operations, which may result in our inability to fully realize the
intended benefits of the asset acquisition and license transactions, or may disrupt our current operations, which could have a
material adverse effect on our business, financial position and/or results of operations.
We are in the process of
integrating the production of the Touch Sensors into our business, and this process may absorb significant management attention,
produce unforeseen operating difficulties and expenditures and may not produce the favorable business and market opportunities
the asset acquisition and license transactions were intended to provide. If we are presented with appropriate opportunities, we
may acquire other businesses or technologies. We may not be able to identify, negotiate, or finance any future acquisition successfully.
If we engage in an acquisition transaction, the process of integration may produce unforeseen operating difficulties and expenditures
and may absorb significant attention of our management that would otherwise be available for the ongoing development of our business.
If we make future acquisitions, we may issue shares of stock that dilute other stockholders, incur debt, assume contingent liabilities,
or create additional expenses related to amortizing intangible assets, any of which might harm our financial results and cause
our stock price to decline. Any financing that we might need for future acquisitions may only be available to us on terms that
restrict our business or that impose on us costs that reduce our net income.
We may face increased
competition when we lose the exclusivity of our Atmel and CIT licenses.
Under the terms of our
Patent License Agreements with Atmel and CIT, we only have exclusive licenses for two years. After such period, our licenses become
non-exclusive. Accordingly, we may face increased competition from third parties that may obtain similar non-exclusive access to
the related intellectual property, which could delay or terminate our product development efforts, lead to higher costs and significant
affect our financial results.
CONSOLIDATED RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets
forth our consolidated ratio of earnings to combined fixed charges and preferred stock dividends for each of the periods indicated.
You should read this table in conjunction with the consolidated financial statements and notes incorporated by reference in this
prospectus.
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Three
Months Ended
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Fiscal
Year Ended
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March
31, 2015
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March
31, 2014
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December 31, 2014
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December 31, 2013
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December 31, 2012
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December 31, 2011
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December 31, 2010
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Consolidated ratios of earnings to combined fixed
charges and preferred stock dividends
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N/A
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N/A
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N/A
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N/A
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N/A
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N/A
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N/A
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For purposes of calculating
the ratios above, earnings consist of net income from continuing operations plus provision for income taxes, (earnings) loss of
equity investees, distributions of income from equity investees and fixed charges. Fixed charges include interest expense and the
interest portion of rent expense which is deemed to be representative of the interest factor.
As of the date of this
prospectus, we have no shares of preferred stock outstanding and have not declared or paid any dividends on preferred stock for
the periods set forth above.
We did not record earnings
for the three months ended March 31, 2015 and 2014. Additionally, we did not record earnings for any of the fiscal years ended
December 31, 2014, 2013, 2012, 2011 and 2010. Accordingly, our earnings were insufficient to cover fixed charges for such periods
and we are unable to disclose a ratio of combined fixed charges and preference dividends to earnings for such periods. The dollar
amount of the deficiency in earnings available for fixed charges and preference dividends for the three months ended March 31,
2015 and 2014 was approximately $5.7 million and $6.2 million, respectively. The dollar amount of the deficiency in earnings available
for fixed charges and preference dividends for the fiscal years ended December 31, 2014, 2013, 2012, 2011 and 2010 was approximately
$25.7 million, $15.2 million, $9.0 million, $8.6 million and $3.8 million, respectively.
USE OF PROCEEDS
Unless we state otherwise
in an accompanying prospectus supplement, we intend to use the net proceeds from the sale of the securities offered by us under
this prospectus and any related prospectus supplement for general corporate purposes. These purposes may include capital expenditures
and additions to working capital. When a particular series of securities is offered, the prospectus supplement relating to that
series will set forth our intended use for the net proceeds we receive from the sale of the securities. Pending the application
of the net proceeds, we may invest the proceeds in short-term, interest-bearing instruments or other investment-grade securities.
The selling stockholders
will receive all of the proceeds from the sale of such stockholders’ shares of common stock under this prospectus. We will
not receive any proceeds from these sales. To the extent proceeds are received upon exercise of the Warrants for which we are registering
the underlying shares on the registration statement of which this prospectus is a part, we intend to use any such proceeds for
general corporate and working capital purposes. The selling stockholders will pay any underwriting discounts and agent’s
commissions and expenses they incur for brokerage, accounting, tax or legal services or any other expenses they incur in disposing
of the shares. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares covered by
this prospectus. These may include, without limitation, all registration and filing fees, SEC filing fees and expenses of compliance
with state securities or “blue sky” laws.
DILUTION
We will set forth in a
prospectus supplement the following information regarding any material dilution of the equity interests of investors purchasing
securities sold by Uni-Pixel in an offering under this prospectus:
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the net tangible book value per share of our equity securities before and after the offering;
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the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchases in the offering; and
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the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.
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DESCRIPTION OF THE SECURITIES THAT MAY BE
OFFERED
Description of Common Stock
The following summary of
the rights of our common stock is not complete and is subject to and qualified in its entirety by reference to our certificate
of incorporation and bylaws, copies of which are filed as exhibits to our registration statement on Form S-3, of which this prospectus
forms a part. See “Where You Can Find More Information.”
We have 110,000,000 shares
of capital stock authorized under our certificate of incorporation, consisting of 100,000,000 shares of common stock, $0.001 par
value, and 10,000,000 shares of preferred stock, $0.001 par value.
As of June 30 , 2015 we
had 14,230,757 shares of common stock outstanding. Our authorized but unissued shares of common stock are available for issuance
without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange
or automated quotation system on which our securities may be listed or traded. If the approval of our stockholders is not so required,
our board of directors may determine not to seek stockholder approval.
Holders of our common stock
are entitled to such dividends as may be declared by our board of directors out of funds legally available for such purpose, subject
to any preferential dividend rights of any then outstanding preferred stock. The shares of common stock are neither redeemable
or convertible. Holders of common stock have no preemptive or subscription rights to purchase any of our securities.
Each holder of our common
stock is entitled to one vote for each such share outstanding in the holder’s name. No holder of common stock is entitled
to cumulate votes in voting for directors.
In the event of our liquidation,
dissolution or winding up, the holders of our common stock are entitled to receive pro rata our assets which are legally available
for distribution, after payments of all debts and other liabilities and subject to the prior rights of any holders of preferred
stock then outstanding. All of the outstanding shares of our common stock are fully paid and non-assessable. The shares of common
stock offered by this prospectus will also be fully paid and non-assessable.
Our common stock is listed
on the NASDAQ Capital Market under the symbol “UNXL”. On July 2 , 2015, the last sale price of our common stock was
$2. 5 5 per share. The transfer agent and registrar for our common stock is Securities Transfer Corporation. Its address is 2591
Dallas Parkway, Suite 102, Frisco, TX 75034, and its telephone number is (469) 633-0101.
Description of Preferred Stock
Our certificate of incorporation
permits us to issue up to 10,000,000 shares of preferred stock in one or more series and with rights and preferences that may be
fixed or designated by our board of directors without any further action by our stockholders. We currently have no shares of preferred
stock outstanding.
Subject to the limitations
prescribed in our certificate of incorporation and under Delaware law, our certificate of incorporation authorizes the board of
directors, from time to time by resolution and without further stockholder action, to provide for the issuance of shares of preferred
stock, in one or more series, and to fix the designation, powers, preferences and other rights of the shares and to fix the qualifications,
limitations and restrictions thereof.
Description of Warrants
Warrants to Purchase Common Stock or Preferred
Stock
We may issue warrants for
the purchase of our preferred stock or common stock, which we refer to in this prospectus as “equity warrants”. As
explained below, each equity warrant will entitle its holder to purchase our equity securities at an exercise price set forth in,
or to be determined as set forth in, the related prospectus supplement. Equity warrants may be issued separately or together with
equity securities. The equity warrants are to be issued under equity warrant agreements.
The particular terms of
each issue of equity warrants and the equity warrant agreement relating to the equity warrants will be described in the applicable
prospectus supplement, including, as applicable:
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the title of the equity warrants;
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the initial offering price;
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the aggregate number of equity warrants and the aggregate number of shares of the equity security purchasable upon exercise of the equity warrants;
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if applicable, the designation and terms of the equity securities with which the equity warrants are issued, and the number of equity warrants issued with each equity security;
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the date on which the right to exercise the equity warrants will commence and the date on which the right will expire;
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if applicable, the minimum or maximum number of the equity warrants that may be exercised at any one time;
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anti-dilution provisions of the equity warrants, if any;
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redemption or call provisions, if any, applicable to the equity warrants;
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any additional terms of the equity warrants, including terms, procedures and limitations relating to the exchange and exercise of the equity warrants; and
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the exercise price.
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Holders of equity warrants
will not be entitled, solely by virtue of being holders, to vote, to consent, to receive dividends, to receive notice as stockholders
with respect to any meeting of stockholders for the election of directors or any other matter, or to exercise any rights whatsoever
as a holder of the equity securities purchasable upon exercise of the equity warrants.
Description of Units
We may, from time to time,
issue units comprised of one or more of the other securities described in this prospectus in any combination. A prospectus supplement
will describe the specific terms of the units offered under that prospectus supplement, and any special considerations applicable
to investing in those units. You must look at the applicable prospectus supplement and any applicable unit agreement for a full
understanding of the specific terms of any units. We will incorporate by reference into the registration statement of which this
prospectus is a part the form of unit agreement, including a form of unit certificate, if any, that describes the terms of the
series of units we are offering before the issuance of the related series of units. While the terms we have summarized below will
generally apply to any future units that we may offer under this prospectus, we will describe the particular terms of any series
of units that we may offer in more detail in the applicable prospectus supplement and incorporated documents. The terms of any
units offered under a prospectus supplement may differ from the terms described below.
General
We may issue units consisting
of common stock, preferred stock, warrants or any combination thereof. Each unit will be issued so that the holder of the unit
is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a
holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the
unit may not be held or transferred separately, at any time, or at any time before a specified date.
We will describe in the
applicable prospectus supplement and any incorporated documents the terms of the series of units, including the following:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any unit agreement under which the units will be issued; and
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any provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities comprising the units.
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The provisions described
in this section, as well as those described under “Description of Common Stock,” “Description of Preferred Stock,”
and “Description of Warrants” will apply to each unit and to any common stock, preferred stock, or warrant included
in each unit, respectively.
Issuance in Series
We may issue units in such amounts and in such
numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent
under the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any
unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or
responsibility in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility to
initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit, without the consent of the related
unit agent or the holder of any other unit, may enforce by appropriate legal action its rights as holder under any security included
in the unit.
Title
We, the unit agent, and any of their agents
may treat the registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any
purposes and as the person entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary.
Anti-Takeover Effects of Certain Provisions
of Delaware Law and Our Charter Documents
The following is a summary
of certain provisions of Delaware law, our certificate of incorporation and our bylaws. This summary does not purport to be complete
and is qualified in its entirety by reference to the corporate law of Delaware and our certificate of incorporation and bylaws.
Effect of Delaware Anti-Takeover
Statute.
We are subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203
prohibits a Delaware corporation from engaging in any business combination (as defined below) with any interested stockholder (as
defined below) for a period of three years following the date that the stockholder became an interested stockholder, unless:
● prior to that date, the board of directors
of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested
stockholder;
● upon consummation of the transaction
that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of
shares of voting stock outstanding (but not the voting stock owned by the interested stockholder) those shares owned by persons
who are directors and officers and by excluding employee stock plans in which employee participants do not have the right to determine
whether shares held subject to the plan will be tendered in a tender or exchange offer; or
● on or subsequent to that date, the
business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not
owned by the interested stockholder.
Section 203 defines “business combination”
to include the following:
● any merger or consolidation involving
the corporation and the interested stockholder;
● any sale, transfer, pledge or other
disposition of 10% or more of the assets of the corporation involving the interested stockholder;
● subject to certain exceptions, any
transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
● subject to limited exceptions, any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series
of the corporation beneficially owned by the interested stockholder; or
● the receipt by the interested stockholder
of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
In general, Section 203
defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the
corporation, or who beneficially owns 15% or more of the outstanding voting stock of the corporation at anytime within a three-year
period immediately prior to the date of determining whether such person is an interested stockholder, and any entity or person
affiliated with or controlling or controlled by any of these entities or persons.
Our Charter Documents.
Our charter documents include provisions that may have the effect of discouraging, delaying or preventing a change in control or
an unsolicited acquisition proposal that a stockholder might consider favorable, including a proposal that might result in the
payment of a premium over the market price for the shares held by our stockholders. Certain of these provisions are summarized
in the following paragraphs.
Effects of authorized
but unissued common stock and blank check preferred stock.
One of the effects of the existence of authorized but unissued common
stock and undesignated preferred stock may be to enable our board of directors to make more difficult or to discourage an attempt
to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise, and thereby to protect the continuity
of management. If, in the due exercise of its fiduciary obligations, the board of directors were to determine that a takeover proposal
was not in our best interest, such shares could be issued by the board of directors without stockholder approval in one or more
transactions that might prevent or render more difficult or costly the completion of the takeover transaction by diluting the voting
or other rights of the proposed acquirer or insurgent stockholder group, by putting a substantial voting block in institutional
or other hands that might undertake to support the position of the incumbent board of directors, by effecting an acquisition that
might complicate or preclude the takeover, or otherwise.
In addition, our certificate
of incorporation grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares
of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution
to holders of shares of common stock. The issuance also may adversely affect the rights and powers, including voting rights, of
those holders and may have the effect of delaying, deterring or preventing a change in control of our company.
Cumulative Voting.
Our amended and restated certificate of incorporation does not provide for cumulative voting in the election of directors which
would allow holders of less than a majority of the stock to elect some directors.
Vacancies.
Our amended
and restated bylaws provide that all vacancies, including newly created directorships, may, except as otherwise required by law,
be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.
Special Meeting of Stockholders.
A special meeting of stockholders may only be called by our chairman of the board, the president or the board of directors.
Advance Notice.
Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of
candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee
of the board of directors.
PRIVATE PLACEMENT OF CONVERTIBLE NOTES AND
WARRANTS
On April 16, 2015, we entered
into a securities purchase agreement (the “Securities Purchase Agreement”) with two accredited investors (the “Investors”)
pursuant to which we agreed to issue and sell in a private placement to the Investors: (i) Notes in an aggregate principal amount
of $15,000,000, and (ii) Warrants to purchase shares of our common stock equal to 65% of the number of shares into which the Notes
were initially convertible. Pursuant to the terms of the Securities Purchase Agreement, we agreed to seek stockholder approval
within 60 days of closing for the issuance of all shares underlying the Notes and the Warrants, as required by NASDAQ Listing Rules
5635(a) and (d). So long as stockholder approval is obtained within 60 days of closing and so long as we have satisfied, or the
Investors have waived, certain conditions set forth in the Securities Purchase Agreement, the Investors have committed to investing
an additional $5 million of Notes that will be funded on our request within 10 trading days of (a) our receipt stockholder approval
and (b) this registration statement being declared effective. If such additional Notes are purchased, the number of shares of common
stock issuable pursuant to the Warrants will be automatically increased pursuant to their terms. The registration statement of
which this prospectus is a part does not register any securities that the Investors could receive if the additional $5 million
is invested.
The following is intended
to provide a summary of the terms of the agreements and securities described above. This summary is qualified in its entirety by
reference to the full text of the agreements, each of which is attached as an exhibit to our Current Report on Form 8-K filed with
the SEC on April 17, 2015 with these transactions.
Notes and Warrant Securities
Purchase Agreement
The Notes and Warrants
were issued pursuant to the terms of the Securities Purchase Agreement, among us and the investors listed therein. The Securities
Purchase Agreement provided for the sale of the Notes and Warrants for gross proceeds of $15,000,000 to us with the potential to
receive an additional $5 million as set forth above.
Notes
Ranking and Security Interest
Pursuant to a Pledge and
Security Agreement (the “Security Agreement”) we entered into in favor of Hudson Bay Fund LP as Collateral Agent, the
Notes are secured by a perfected first priority security interest in all of our assets and are senior in right of payment to all
of our existing and future indebtedness, subject to Permitted Liens, as defined in the Notes. With the exception of Permitted Liens,
we have agreed that we will not grant a security interest in our assets so long as the Notes remain outstanding and that we will
not incur any new debt except for Permitted Indebtedness, as that term is defined in the Notes.
Maturity Date
Unless earlier converted
or redeemed, the Notes mature on April 16, 2016.
Interest and Payment of Interest
The Notes bear interest
at a rate of 9% per annum, subject to increase to 18% per annum upon the occurrence and continuance of an event of default (as
described below). Interest will be payable monthly in arrears commencing on June 1, 2015 and, so long as certain equity conditions
have been satisfied, may be paid in shares of common stock at our option. We may also elect to pay interest in whole or in part
in cash. Interest on the Notes is computed on the basis of a 360-day year and twelve 30-day months. The number of shares of common
stock issued for the payment of interest is computed at a price that is the lower of (i) the Conversion Price then in effect and
(ii) the Market Price as of the applicable interest date. The Market Price is defined as 85% of the lower of (i) the arithmetic
average of the 4 lowest daily weighted average prices of our common stock during the 12 consecutive trading days immediately preceding
the applicable date of determination and (ii) the closing sale price on the date prior to the date of determination.
Conversion of the Notes
The holders of the Notes
may, at any time, elect to convert the Notes into shares of our common stock at the conversion price, subject to certain beneficial
ownership limitations. The conversion price will be $8.47 per share (the “Conversion Price”), subject to adjustment
as set forth in the Notes for stock splits, dividends, recapitalizations and similar events, which equaled 110% of the last closing
price of our common stock prior to the execution and delivery of the Securities Purchase Agreement.
Redemption of the Notes
Provided there has been
no Equity Conditions Failure, as defined in the Notes, we will pay the Installment Amount, as defined in the Notes, by converting
all or some of the Installment Amount into common stock (a “Company Conversion”). However, we may also, at our option,
pay the Installment Amount by redeeming the Installment Amount in cash (a “Company Redemption”) or by any combination
of a Company Conversion and a Company Redemption.
The Investors have the
right to accelerate payment on each monthly redemption date of up to two monthly Installment Amounts upon written notice to us.
The Investors also have the right to defer payment of a monthly Installment Amount. If an Installment Amount is accelerated, we
are required (so long as certain conditions are met) to pay the accelerated Installment Amount in shares of our common stock at
the Company Conversion Price, which is the lower of (i) the Conversion Price then in effect and (ii) the Market Price.
Following an Event of Default,
as defined in the Notes, the Investors may require us to redeem all or any portion of the Notes. The redemption amount may be paid
in cash or with shares of our common stock, at the election of the Investor, at a price equal to the Event of Default Redemption
Price. The Event of Default Redemption Price is a price equal to the greater of (x) 115% of the amount the Investor seeks to have
paid (the “Default Conversion Amount”) and (y) the product of (A) the Default Conversion Amount and (B) the quotient
determined by dividing (I) the greatest closing sale price of the shares of common stock during the period beginning on the date
immediately preceding the Event of Default and ending on the date the Investor delivers an Event of Default Redemption Notice,
by (II) the lowest conversion price in effect during such period, which, in the case of an Event of Default, equals 85% of the
lowest closing sale price of the Common Stock during the 30 trading days immediately prior to the conversion date.
Events of Default
The Notes contain standard
and customary events of default including but not limited to: (i) failure to register our common stock within certain time periods;
(ii) failure to make payments when due under the Notes; (iii) breaches of covenants and (iv) bankruptcy or insolvency.
Following an event of default,
the Investors may require us to redeem all or any portion of the Notes. The redemption amount may be paid in cash or with shares
of our common stock, at the election of the Investor, at a price equal to the Event of Default Redemption Price, as defined in
the Notes.
Fundamental Transactions
The Notes prohibit us from
entering into specified transactions involving a change of control, unless the successor entity assumes in writing all of our obligations
under the Notes under a written agreement and we obtain the prior consent of the holders of the Notes. A change of control that
is consummated without prior consent is an event of default under the Notes. If we complete a permitted fundamental transaction,
such as a merger in which we are not the surviving entity, the holders are entitled to receive the consideration they would have
received had they fully converted their Notes and exercised their warrants without regarding to any contractual ownership limits.
Limitations on Conversion and Issuance
The Notes may not be converted
and shares of common stock may not be issued under the Notes if, after giving effect to the conversion or issuance, the Investor
together with its affiliates would beneficially own in excess of 4.99% or 9.99%, as applicable, of our outstanding shares of common
stock. At each Investor’s option, the Notes ownership limitation blocker may be raised or lowered to any other percentage
not in excess of 9.99%, as applicable, except that any raise will only be effective upon 61-days’ prior notice to us.
Until such time we have
obtained stockholder approval required by The NASDAQ Stock Market for the issuance of shares greater than 19.99% of its outstanding
and outstanding shares of common stock on the Closing Date, we may not issue, upon conversion of the Notes, a number of shares
of common stock which, when aggregated with any shares of common stock issued on or after the original issue date and prior to
such conversion date (i) in connection with the conversion of any Notes issued pursuant to the Securities Purchase Agreement or
as interest pursuant to the Notes and (ii) in connection with the exercise of any Warrants, would exceed that threshold of shares
of common stock (subject to adjustment for forward and reverse stock splits, recapitalizations and the like occurring after April
16, 2015). On May 8, 2015 we noticed a special meeting of our stockholders for June 15, 2015, for the purpose of obtaining stockholder
approval. Due to our inability to meet the quorum requirement set forth in our bylaws by that date, we adjourned the special meeting
to July 13, 2015.
Common Stock Purchase Warrants
Concurrently with the issuance
of the Notes, we issued to each of the purchasers a Warrant to acquire shares of our common stock, or the Warrant Shares, equal
to 65% of the shares issuable to each such purchaser upon conversion of the applicable Note. The Warrants are immediately exercisable
ending at the close of business on April 16, 2020.
The initial exercise price
for the purchase of the Warrant Shares equals $9.63, subject to adjustment as set forth in the Warrant. If, after the Closing Date,
we issue or sell, or are deemed to have issued or sold, any shares of common stock (with the exception of certain Excluded Securities,
as those are defined in the Warrants) for a consideration per share less than a price equal to the exercise price of the Warrants
in effect immediately prior to such issue or sale (or deemed issuance or sale) (a “Dilutive Issuance”), then immediately
after the Dilutive Issuance, (x) if the Dilutive Issuance occurs prior to the one year anniversary of the issuance date, then the
exercise price then in effect will be reduced to an amount equal to the product of (A) the exercise price in effect immediately
prior to the Dilutive Issuance and (B) the quotient determined by dividing (1) the sum of (I) the product derived by multiplying
the exercise price in effect immediately prior to the Dilutive Issuance and the number of Common Shares Deemed Outstanding (as
defined in the Warrants) immediately prior to the Dilutive Issuance plus (II) the consideration, if any, received by us on such
Dilutive Issuance, by (2) the product derived by multiplying (I) the exercise price in effect immediately prior to the Dilutive
Issuance by (II) the number of Common Shares Deemed Outstanding immediately after the Dilutive Issuance and (y) if the Dilutive
Issuance occurs after the one year anniversary of the issuance date but within five years of the issuance date, the exercise price
then in effect will be reduced to an amount equal to the price of the shares of common stock issued in the Dilutive Issuance. The
Warrants will be exercisable for cash, but if a prospectus covering the shares of common stock underlying the Warrants is not available,
the holders may exercise the Warrants using a cashless exercise provision. The Warrants may not be exercised if, after giving effect
to the exercise, the Investor would beneficially own in excess of 4.99% or 9.99% of the outstanding shares of common stock, depending
on the holder. At the holder’s option, the cap applicable to the exercise of the Warrants may be raised or lowered to any
other percentage not in excess of 9.99%, except that any increase will only be effective upon 61-days’ prior notice to us.
If at any time after the initial exercise date, there is no registration statement registering, or no current prospectus available
for, the resale of the Warrant Shares by the holder thereof, then the Warrant may also be exercised, in whole or in part, at such
time by means of a “cashless exercise” as set forth in the Warrant.
Other Information Related to the Notes and
Warrant Private Placement
Registration Rights
Under the terms of a registration
rights agreement that we entered into in connection with the private placement of the Notes, Warrants and shares of common stock
described above, we are required to register for resale the shares of common stock that are issuable upon conversion of the Notes
and additional shares that could be used as payment of monthly interest and exercise of the Warrants (plus an additional 100% in
excess of the number of shares issuable upon conversion of the Notes) as well as the common stock sold in the private placement.
The registration statement of which this prospectus forms a part was filed to satisfy this obligation under the registration rights
agreement. The registration rights agreement contains deadlines we must meet to ensure that we are using our reasonable best efforts
to cause the registration statement to be declared effective as soon as possible. The registration rights agreement provides for
the payment of partial liquidated damages of one percent of the principal amount of the Notes per month in the event we fail to
meet certain specified deadlines, including initial filing, responding to comments of the Staff within a specified period of time
and requesting acceleration within a specified time after being advised by the Staff of the ability to do so; however, the registration
rights agreement does not contain an absolute deadline for effectiveness of the registration statement.
SELLING STOCKHOLDERS
The shares of common stock
being offered by the selling stockholders are those issuable to the selling stockholders pursuant to the terms of the Notes and
upon exercise of the Warrants. For additional information regarding the issuance of those Notes and Warrants, see “Private
Placement of Convertible Notes and Warrants” above. We are registering the shares of common stock in order to permit the
selling stockholders to offer the shares for resale from time to time. Except for the ownership of the Notes and the Warrants issued
and to be issued pursuant to the Securities Purchase Agreement, the selling stockholders have not had any material relationship
with us within the past three years.
The table below lists the
selling stockholders and other information regarding the beneficial ownership of the shares of common stock by each of the selling
stockholders. The second column lists the number of shares of common stock beneficially owned by each selling stockholder, based
on its ownership of the Notes and Warrants, as of June 30, 2015, assuming conversion of all Notes and exercise of all Warrants
held by the selling stockholders on that date, without regard to any limitations on conversion, amortization, redemption or exercise.
The third column lists
the shares of common stock being offered by this prospectus by the selling stockholders.
In accordance with the
terms of a registration rights agreement with the selling stockholders, this prospectus covers the resale of the sum of (i) 200%
of the maximum number of shares of common stock issued and issuable pursuant to the Notes issued and issuable pursuant to the Securities
Purchase Agreement as of the Trading Day, as defined in the Securities Purchase Agreement, immediately preceding the date the registration
statement was initially filed with the SEC, and (ii) 425,387 shares of common stock (out of a total 1,151,121 shares) issued and
issuable upon exercise of the Warrants issued and issuable pursuant to the Securities Purchase Agreement. Because the conversion
price of the Notes and the exercise price of the Warrants may be adjusted, the number of shares that will actually be issued may
be more or less than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares
offered by the selling stockholders pursuant to this prospectus.
Under the terms of the
Notes and the Warrants, a selling stockholder may not convert the Notes or exercise the Warrants to the extent such conversion
or exercise would cause such selling stockholder, together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 4.99% or 9.99%, depending on the specific terms applicable to such stockholder, of our then outstanding
shares of common stock following such conversion or exercise, excluding for purposes of such determination shares of common stock
issuable upon conversion of the Notes which have not been converted and upon exercise of the Warrants which have not been exercised.
The number of shares in the second column does not reflect this limitation. The selling stockholders may sell all, some or none
of their shares in this offering. See “Plan of Distribution.”
Name of Selling Stockholder
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Number of Shares of Common Stock Owned Prior to Offering(1)
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Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus(2)
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Number of Shares of Common Stock Owned After Offering
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Hudson Bay Master Fund Ltd. (3)
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3,504,726
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(4)
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3,743,902
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0
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Capital Ventures International (5)
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292,207
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(6)
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415,989
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0
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(1)
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Does not include any shares potentially issuable in payment of interest because the determination of whether to pay interest shares is in our discretion.
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(2)
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Represents (i) 200% of the shares of common stock issuable pursuant to the terms of the Notes, including shares issuable as payment of interest, and (ii) 425,387 shares issuable upon exercise of the Warrants (out of a total 1,151,121 warrants) without regard to any restrictions or limitations on the number of shares of common stock issuable pursuant to the terms of the Notes.
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(3)
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Hudson Bay Capital Management, L.P., the investment manager of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management, L.P. Each of Hudson Bay Master Fund Ltd. and Sander Gerber disclaims beneficial ownership over these securities.
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(4)
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Amount includes 1,036,009 shares of common stock underlying a Warrant , of which 382,848 shares have been registered pursuant to this prospectus and a total of 1,311,692 shares of common stock issued to the selling stockholder for the payment of principal in the aggregate amount of $3,700,000 and interest in the aggregate amount of $167,437.50.
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(5)
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Heights Capital Management, Inc., the authorized agent of Capital Ventures International (“CVI”), has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the beneficial owner of these shares. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have investment discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any such beneficial ownership of the shares. CVI is affiliated with one or more registered broker-dealers. CVI purchased the shares being registered hereunder in the ordinary course of business and at the time of purchase, had no agreements or understandings, directly or indirectly, with any other person to distribute such shares.
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(6)
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Amount includes 115,112 shares of common stock underlying a Warrant , of which 42,539 shares have been registered pursuant to this prospectus .
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PLAN OF DISTRIBUTION
Company Distributions
We may offer and sell the
securities in any one or more of the following ways:
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to or through underwriters, brokers or dealers;
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directly to one or more other purchasers;
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through a block trade in which the broker or dealer engaged to handle the block trade will attempt to sell the securities as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
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through agents on a best-efforts basis;
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in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on the NASDAQ Capital Market or sales made through a market maker other than on an exchange or other similar offerings through sales agents; or
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otherwise through any other method permitted by applicable law or a combination of any of the above methods of sale.
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In addition, we may enter
into option, share lending or other types of transactions that require us to deliver shares of common stock to an underwriter,
broker or dealer, who will then resell or transfer the shares of common stock under this prospectus. We may also enter into hedging
transactions with respect to our securities. For example, we may:
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enter into transactions involving short sales of the shares of common stock by underwriters, brokers or dealers;
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sell shares of common stock short and deliver the shares to close out short positions;
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enter into option or other types of transactions that require the delivery of shares of common stock to an underwriter, broker or dealer, who will then resell or transfer the shares of common stock under this prospectus; or
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loan or pledge the shares of common stock to an underwriter, broker or dealer, who may sell the loaned shares or, in the event of default, sell the pledged shares.
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We may enter into derivative
transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities
covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party
may use securities pledged by or borrowed from us or others to settle those sales or to close out any related open borrowings of
stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock.
The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be identified
in the applicable prospectus supplement (or a post-effective amendment). In addition, we may otherwise loan or pledge securities
to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial
institution or other third party may transfer its economic short position to investors in our securities or in connection with
a concurrent offering of other securities.
Each time we sell securities,
we will provide a prospectus supplement that will name any underwriter, dealer or agent involved in the offer and sale of the securities.
Any prospectus supplement will also set forth the terms of the offering, including:
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the purchase price of the securities and the proceeds we will receive from the sale of the securities;
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any underwriting discounts and other items constituting underwriters’ compensation;
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any public offering or purchase price and any discounts or commissions allowed or re-allowed or paid to dealers;
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any commissions allowed or paid to agents;
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any other offering expenses;
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any securities exchanges on which the securities may be listed;
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the method of distribution of the securities;
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the terms of any agreement, arrangement or understanding entered into with the underwriters, brokers or dealers; and
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any other information we think is important.
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in transactions on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale
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in transactions in the over-the-counter market;
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in block transactions in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction, or in crosses, in which the same broker acts as an agent on both sides of the trade
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through the writing of options; or
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through other types of transactions
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If underwriters or dealers
are used in the sale, the securities will be acquired by the underwriters or dealers for their own account. The securities may
be sold from time to time by us in one or more transactions:
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at a fixed price or prices, which may be changed;
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at market prices prevailing at the time of sale;
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at prices related to such prevailing market prices;
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at varying prices determined at the time of sale; or
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at negotiated prices.
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Such sales may be effected:
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in transactions on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
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in transactions in the over-the-counter market;
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in block transactions in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction, or in crosses, in which the same broker acts as an agent on both sides of the trade;
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through the writing of options; or
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through other types of transactions
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The securities may be offered
to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more
of such firms. Unless otherwise set forth in the prospectus supplement, the obligations of underwriters or dealers to purchase
the securities offered will be subject to certain conditions precedent and the underwriters or dealers will be obligated to purchase
all the offered securities if any are purchased. Any public offering price and any discount or concession allowed or reallowed
or paid by underwriters or dealers to other dealers may be changed from time to time.
The securities may be sold
directly by us or through agents designated by us from time to time. Any agent involved in the offer or sale of the securities
in respect of which this prospectus is delivered will be named, and any commissions payable to such agent will be set forth in,
the prospectus supplement. Unless otherwise indicated in the prospectus supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
Offers to purchase the
securities offered by this prospectus may be solicited, and sales of the securities may be made by us directly to institutional
investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale of
the securities. The terms of any offer made in this manner will be included in the prospectus supplement relating to the offer.
Some of the underwriters,
dealers or agents used by us in any offering of securities under this prospectus may be customers of, engage in transactions with,
and perform services for us or affiliates of ours in the ordinary course of business. Underwriters, dealers, agents and other persons
may be entitled to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities
Act, and to be reimbursed for certain expenses.
Subject to any restrictions
relating to debt securities in bearer form, any securities initially sold outside the United States may be resold in the United
States through underwriters, dealers or otherwise.
Any underwriters to which
offered securities are sold by us for public offering and sale may engage in transactions that stabilize, maintain or otherwise
affect the price of the common shares during and after this offering, but those underwriters will not be obligated to do so and
may discontinue any market making at any time. Specifically, the underwriters may over-allot or otherwise create a short position
in the common shares for their own accounts by selling more common stock than have been sold to them by us. The underwriters may
elect to cover any such short position by purchasing common stock in the open market or by exercising the over-allotment option
granted to the underwriters. In addition, the underwriters may stabilize or maintain the price of the common stock by bidding for
or purchasing common stock in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed
to syndicate members or other broker-dealers participating in the offering are reclaimed if common stock previously distributed
in the offering are repurchased, whether in connection with stabilization transactions or otherwise. The effect of these transactions
may be to stabilize or maintain the market price of the common stock at a level above that which might otherwise prevail in the
open market. The imposition of a penalty bid may also affect the price of the common stock to the extent that it discourages resales
of the common stock. The magnitude or effect of any stabilization or other transactions is uncertain. These transactions may be
effected on the NASDAQ Capital Market or otherwise and, if commenced, may be discontinued at any time.
In connection with this
offering, the underwriters and selling group members may also engage in passive market making transactions in our common stock.
Passive market making consists of displaying bids on the NASDAQ Capital Market limited by the prices of independent market makers
and effecting purchases limited by those prices in response to order flow. Rule 103 of Regulation M promulgated by the SEC limits
the amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may
stabilize the market price of the common shares at a level above that which might otherwise prevail in the open market and, if
commenced, may be discontinued at any time.
We are subject to the applicable
provisions of the Exchange Act and the rules and regulations under the Exchange Act, including Regulation M. This regulation may
limit the timing of purchases and sales of any of the shares of common stock offered in this prospectus by any person. The anti-manipulation
rules under the Exchange Act may apply to sales of shares in the market and to the activities of us.
The anticipated date of
delivery of the securities offered by this prospectus will be described in the applicable prospectus supplement relating to the
offering.
Any broker-dealer participating
in the distribution of the shares of common stock may be deemed to be an “underwriter” within the meaning of the Securities
Act with respect to any securities such entity sells pursuant to this prospectus.
To comply with the securities
laws of some states, if applicable, the securities may be sold in these jurisdictions only through registered or licensed brokers
or dealers. In addition, in some states the securities may not be sold unless they have been registered or qualified for sale or
an exemption from registration or qualification requirements is available and is complied with.
The Selling Stockholders’ Distributions
We are registering the
shares of common stock issuable pursuant to the terms of the Notes and upon exercise of the Warrants to permit the resale of these
shares of common stock by the holders of the Notes and Warrants from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling stockholders of the shares of common stock. We will bear all fees and
expenses incident to our obligation to register the shares of common stock.
The selling stockholders
may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares
of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions,
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on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
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in the over-the-counter market;
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in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
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through the writing of options, whether such options are listed on an options exchange or otherwise;
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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short sales;
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sales pursuant to Rule 144;
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broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
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a combination of any such methods of sale; and
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any other method permitted pursuant to applicable law.
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If the selling stockholders
effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders
or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal
(which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of
common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short
and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may
sell such shares.
The selling stockholders
may pledge or grant a security interest in some or all of the convertible notes, warrants or shares of common stock owned by them
and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares
of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include
the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees
or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders
and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer
may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares
of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of
shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents,
any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions
or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws
of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale
in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance
that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part.
The selling stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act,
which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other
participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability
of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the
shares of common stock.
We will pay all expenses
of the registration of the shares of common stock pursuant to the registration rights agreement including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify
the selling stockholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration
rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders
against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished
to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreement,
or we may be entitled to contribution.
Once sold under the registration
statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other
than our affiliates.
LEGAL MATTERS
The validity of the issuance
of the securities offered hereby will be passed upon for us by Mitchell Silberberg & Knupp, LLP.
EXPERTS
PMB Helin Donovan, LLP,
independent registered public accounting firm, has audited our consolidated financial statements included in our Annual Report
on Form 10-K for the year ended December 31, 2014, as set forth in their report, which is incorporated by reference in the prospectus
and elsewhere in this registration statement. Our consolidated financial statements are incorporated by reference in reliance on
PMB Helin Donovan, LLP’s report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the
SEC a registration statement on Form S-3 under the Securities Act, with respect to the securities covered by this prospectus. This
prospectus, which is a part of the registration statement, does not contain all of the information set forth in the registration
statement or the exhibits and schedules filed therewith. For further information with respect to us and the securities covered
by this prospectus, please see the registration statement and the exhibits filed with the registration statement. A copy of the
registration statement and the exhibits filed with the registration statement may be inspected without charge at the Public Reference
Room maintained by the SEC, located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information about the operation of the Public Reference Room. The SEC also maintains an Internet website that contains reports,
proxy and information statements and other information regarding registrants that file electronically with the SEC. The address
of the website is http://www.sec.gov.
We are subject to the information
and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic reports, proxy statements
and other information with the SEC. Such periodic reports, proxy statements and other information are available for inspection
and copying at the Public Reference Room and website of the SEC referred to above. We maintain a website at http://www.unipixel.com.
You may access our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those
reports filed pursuant to Sections 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably
practicable after such material is electronically filed with, or furnished to, the SEC. Our website and the information contained
on that site, or connected to that site, are not incorporated into and are not a part of this prospectus.
INFORMATION INCORPORATED BY REFERENCE
The SEC and applicable
law permits us to “incorporate by reference” into this prospectus information that we have or may in the future file
with or furnish to the SEC. This means that we can disclose important information by referring you to those documents. You should
read carefully the information incorporated herein by reference because it is an important part of this prospectus. We hereby incorporate
by reference the following documents into this prospectus:
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as filed with the SEC on February 26, 2015;
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Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the SEC on January 27, 2015;
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Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, as filed with the SEC on May 11, 2015;
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Our Current Reports on Form 8-K filed with the SEC on February 12, 2015, February 20, 2015, February 26, 2015, April 17, 2015 (as amended on June 19, 2015) , April 23, 2015, April 27, 2015, May 1, 2015, May 12, 2015, May 15, 2015, May 28, 2015, June 1, 2015 and June 15, 2015; and
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The description of our common stock included in our Registration Statement on Form 8-A/A, as filed with the SEC on December 9, 2010 pursuant to Section 12(b) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.
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Additionally, all documents
filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than any portions of filings that
are furnished rather than filed pursuant to Items 2.02 and 7.01 of a Current Report on Form 8-K), after the date of this prospectus
and before the termination or completion of this offering ( including all such documents filed with the SEC after the date of the
initial registration statement and prior to the effectiveness of the registration statement) shall be deemed to be incorporated
by reference into this prospectus from the respective dates of filing of such documents. Any information that we subsequently file
with the SEC that is incorporated by reference as described above will automatically update and supersede any previous information
that is part of this prospectus.
Upon written or oral request,
we will provide you without charge, a copy of any or all of the documents incorporated by reference, other than exhibits to those
documents unless the exhibits are specifically incorporated by reference in the documents. Please send requests to Uni-Pixel, Inc.,
8708 Technology Forest Place, Suite 100, The Woodlands, Texas 77381 Attn: Chief Financial Officer, (281) 825-4500.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the company,
we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is therefore unenforceable.
3,000 Shares of Series A-1 Convertible Preferred
Stock
Series A-1 Warrants to Purchase 2,500,000 Shares
of Common Stock
PROSPECTUS SUPPLEMENT
Sole Placement Agent
The Benchmark Company, LLC
January 17, 2017
Uni-Pixel, Inc. (NASDAQ:UNXL)
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