Item 1.01 Entry into a Material Definitive Agreement.
Registration Rights Agreement
On April 20, 2011, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Michael F. Rosinus R/O IRA (“Rosinus”), in connection with the closing of the transactions contemplated by the Securities Purchase Agreement (the “Securities Purchase Agreement”) dated as of November 16, 2010, as amended, between the Company and Rosinus. Under the Registration Rights Agreement, the Company is required to use its reasonable best efforts to promptly file with, and cause to be declared effective by, the Securities and Exchange Commission, not later than 30 days after the date thereof, a shelf registration statement providing for the resale by Rosinus of the shares of common stock of the Company (“Common Stock”) issued by the Company to Rosinus in connection with closing of the transactions under the Securities Purchase Agreement. The Registration Rights Agreement also provides Rosinus with customary piggyback registration rights. The Company has already filed a shelf registration statement to which Mr. Rosinus will be added. The shelf registration statement was filed on March 23, 2011, as required by a registration rights agreement between the company and the other investors party to the SPAs. The foregoing summary of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
On April 20, 2011, the Company sold 50,000 shares of Common Stock at a price of $4.00 per share, for total gross proceeds of $200,000. The shares were sold to Rosinus subject to the Securities Purchase Agreement, the terms of which were disclosed pursuant to a Form 8-K filed on November 19, 2010. The Securities Purchase Agreement is one of several securities purchase agreements dated November 16, 2010 among the Company and nine investors (including Rosinus) (collectively, the “SPAs”). The closing of the sale of Common Stock to Rosinus was delayed pending receipt of regulatory approval by Mr. Rosinus. The closing of the sale to Mr. Rosinus concludes the Company’s sale of Common stock pursuant to the SPAs.
The shares of Common Stock sold pursuant to the Securities Purchase Agreement were sold pursuant to the exemption from registration afforded by Section 4(2) of the Securities Act of 1933 and Regulation D promulgated thereunder.