Item 1.01.
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Entry into a Material Definitive Agreement.
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On May 17, 2018, we entered into separate amendments (each, an “Amendment,” and collectively, the “Amendments”) to the equity distribution agreements dated January 11, 2018 (each, a “Prior Sales Agreement” and collectively, the “Prior Sales Agreements”), with each of Compass Point Research and Trading, LLC, B. Riley FBR, Inc. and BTIG, LLC (each, a “Sales Agent” and collectively, the “Sales Agents”). Pursuant to the Prior Sales Agreements, each Sales Agent agreed to act as a sales agent in connection with the sale of shares of our common stock, par value $.01 per share (the “Shares”), from time-to-time, through an “at the market” equity offering program. The Prior Sales Agreements provided for the sale of Shares with an aggregate sales price of $20 million and such agreements, as amended by the Amendments (as so amended, each, a “Sales Agreement,” and collectively, “the Sales Agreements”) (i) increased the aggregate sales price of Shares that may be sold to $30 million. Since the commencement of our at-the-market equity offering program through May 17, 2018, we sold $3,083,834 in aggregate sales price of Shares and therefore, as of May 17, 2018, after giving effect to the Amendment, we may offer and sell up to an additional $ 26,916,166 in aggregate sales price of Shares.
The sales, if any, of the Shares made under the Sales Agreements will be made by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended.
The Sales Agreements provide that each Sales Agent will receive from us a commission for its services in acting as sales agent of up to 3.0% of the gross sales price per share of all Shares sold through it as Sales Agent under the applicable Sales Agreement. The Sales Agents are also entitled to reimbursement of their reasonable expenses in an aggregate amount not to exceed $35,000. We are not obligated to sell any of the Shares under the Sales Agreement, and may at any time suspend solicitation and offers thereunder. The offering of Shares pursuant to any of the Sales Agreements will terminate on the earlier of (1) after giving effect to the Amendment, the sale, pursuant to the Sales Agreements, of Shares having an aggregate offering price of $30 million and (2) the termination of the applicable Sales Agreement by either us or the Sales Agents as permitted therein.
The Shares will be issued pursuant to our shelf registration statement on Post-Effective Amendment No. 1 to Form S-3 (File No. 333-213162). Concurrently herewith, we are filing a prospectus supplement (the “Prospectus Supplement”), dated May 17, 2018, with the Securities and Exchange Commission in connection with the offer and sale of the Shares.
In the ordinary course of their business, the Sales Agents and/or their respective affiliates have in the past provided, and may continue to provide, certain commercial banking, financial advisory, investment banking and other services for us for which the Sales Agents and/or their respective affiliates have received and may continue to receive customary fees and commissions. In addition, the Sales Agents have advised that from time to time, such agents and/or their respective affiliates have in the past effected, and may continue to effect, transactions for their own account or the account of customers, and have held, and may continue to hold, on behalf of themselves or their customers, long or short positions in our equity securities or loans.
This Current Report shall not constitute an offer to sell or the solicitation of an offer to buy any security nor there any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The foregoing description is qualified in its entirety by reference to the full text of the Prior Sales Agreements, the form of which was filed as Exhibit 1.1 to the Current Report on Form 8-K filed on January 11, 2018, and the Amendment, the form of which is attached as Exhibit 1.2 to this Current Report. Each of such exhibits is incorporated by reference herein.
Also attached hereto as Exhibit 5.1, and incorporated by reference to the Prospectus Supplement, is the opinion of Dentons US LLP relating to the legality of the Shares.