Item 3.02 Unregistered Sales of Equity Securities.
On October 16, 2018, we entered into agreements
with accredited investors for the sale and purchase of 1,600,000 shares of our common stock, $0.01 par value at a purchase price
of $1.25 per share. We received $2,000,000 in gross proceeds from the offering. We intend to use the net proceeds from this placement
for general working capital purposes.
In conjunction with the placement, we also
entered into a registration rights agreement with the investors, whereby we are obligated to file a registration statement with
the Securities Exchange Commission on or before 90 calendar days after October 16, 2018 to register the resale by the investors
of 1,600,000 shares of our common stock purchased in the placement.
The description of the private placement
does not purport to be complete and is qualified in its entirety by reference to the complete text of the Form of the Securities
Purchase Agreement by and among us and the investors, dated October 16, 2018, and the Form of Registration Rights Agreement by
and among us and the investors, dated October 16, 2018, which are filed as Exhibits 10.1 and 10.2, respectively, to this
Current Report on Form 8-K and are incorporated herein by reference.
The issuance of the shares of common stock
was exempt from registration pursuant to the exemption contained in Section 4(a)(2) of the Securities Act of 1933, as amended,
and Rule 506 of Regulation D, inasmuch as it was not a public offering since no general solicitation or advertising of any kind
was used in connection with the issuance and there was only a limited number of recipients or the recipients were knowledgeable
accredited investors who understand the investment risks. Accordingly, the shares issued as part of the private placement have
not been registered under the Securities Act of 1933, as amended, and until so registered, the securities may not be offered or
sold in the United States absent registration or availability of an applicable exemption from registration.
This report does not constitute an offer
to sell or the solicitation of an offer to buy, and these securities cannot be sold in any state or jurisdiction in which this
offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any state or
jurisdiction. Any offer will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective
registration statement.
This report contains forward-looking
statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs,
expectations, strategies, predictions or any other statements related to our future activities or future events or
conditions. These statements are based on current expectations, estimates and projections about our business based, in part,
on assumptions made by our management. These statements are not guarantees of future performances and involve risks,
uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those
risks discussed in our Annual Report on Form 10-K and in other documents that we file from time to time with the
SEC. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any
obligation to update any forward-looking statement to reflect events or circumstances after the date of this report, except
as required by law.