Item 1.01 Entry into a Material Definitive Agreement.
On September 18, 2020, Ocean Power Technologies, Inc. (the "Company"), entered
into a common stock purchase agreement (the "Purchase Agreement") with Aspire
Capital Fund, LLC ("Aspire Capital"), which provides that, upon the terms and
subject to the conditions and limitations set forth therein, Aspire Capital is
committed to purchase up to an aggregate of $12,500,000 of shares of the
Company's common stock over the 30-month term of the Purchase Agreement.
Concurrently with entering into the Purchase Agreement, the Company also entered
into a registration rights agreement with Aspire Capital (the "Registration
Rights Agreement"), in which the Company agreed to file one or more registration
statements, as permissible and necessary to register sales under the Securities
Act of 1933, as amended (the "Securities Act"), of the shares of the Company's
common stock that have been and may be issued to Aspire Capital pursuant to the
Under the Purchase Agreement, after the Securities and Exchange Commission (the
"SEC") has declared effective the registration statement referred to above, on
any trading day selected by the Company, the Company has the right, in its sole
discretion, to present Aspire Capital with a purchase notice (each, a "Purchase
Notice"), directing Aspire Capital (as principal) to purchase up to 250,000
shares of the Company's common stock per business day at a per share price (the
"Purchase Price") equal to the lesser of:
? the lowest sale price of the Company's common stock on the purchase date;
? the arithmetic average of the three (3) lowest closing sale prices for the
Company's common stock during the ten (10) consecutive trading days ending
on the trading day immediately preceding the purchase date.
In addition, on any date on which the Company submits a Purchase Notice to
Aspire Capital in an amount of 250,000 shares, the Company also has the right,
in its sole discretion, to present Aspire Capital with a volume-weighted average
price purchase notice (each, a "VWAP Purchase Notice") directing Aspire Capital
to purchase an amount of stock equal to up to 30% of the aggregate shares of the
Company's common stock traded on its principal market on the next trading day
(the "VWAP Purchase Date"), subject to a maximum number of shares the Company
may determine. The purchase price per share pursuant to such VWAP Purchase
Notice is generally 97% of the volume-weighted average price for the Company's
common stock traded on its principal market on the VWAP Purchase Date.
The Purchase Price will be adjusted for any reorganization, recapitalization,
non-cash dividend, stock split, or other similar transaction occurring during
the period(s) used to compute the Purchase Price. The Company may deliver
multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time
to time during the term of the Purchase Agreement, so long as the most recent
purchase has been completed.
The Purchase Agreement provides that the Company and Aspire Capital shall not
effect any sales under the Purchase Agreement on any purchase date where the
closing sale price of the Company's common stock is less than $0.10. There are
no trading volume requirements or restrictions under the Purchase Agreement, and
the Company will control the timing and amount of sales of the Company's common
stock to Aspire Capital. Aspire Capital has no right to require any sales by the
Company, but is obligated to make purchases from the Company as directed by the
Company in accordance with the Purchase Agreement. There are no limitations on
use of proceeds, financial or business covenants, restrictions on future
fundings, rights of first refusal, participation rights, penalties or liquidated
damages in the Purchase Agreement. The Purchase Agreement may be terminated by
the Company at any time, at its discretion, without any cost to the Company.
Aspire Capital has agreed that neither it nor any of its agents, representatives
and affiliates shall engage in any direct or indirect short-selling or hedging
of the Company's common stock during any time prior to the termination of the
Purchase Agreement. Any proceeds the Company receives under the Purchase
Agreement are expected to be used for working capital and general corporate
The foregoing is a summary description of certain terms of the Purchase
Agreement and the Registration Rights Agreement and, by its nature, is
incomplete. Copies of the Purchase Agreement and Registration Rights Agreement
are filed herewith as Exhibits 10.1 and 4.1, respectively, to this Current
Report on Form 8-K and are incorporated herein by reference. All readers are
encouraged to read the entire text of the Purchase Agreement and the
Registration Rights Agreement.
The issuance of the shares of common stock that may be issued from time to time
to Aspire Capital under the Purchase Agreement is exempt from registration under
the Securities Act, pursuant to the exemption for transactions by an issuer not
involving any public offering under Section 4(a)(2) of the Securities Act.
Item 1.02 Termination of a Material Definitive Agreement.
Pursuant to the Purchase Agreement, the Company and Aspire Capital terminated
the prior Common Stock Purchase Agreement, dated October 24, 2019, between the
Item 3.02 Unregistered Sales of Equity Securities.
The information contained above in Item 1.01 is hereby incorporated by reference
into this Item 3.02 in its entirety.
Item 7.01 Regulation FD Disclosure.
On September 18, 2020, the Company issued a press release announcing that it has
entered into the Purchase Agreement with Aspire Capital. A copy of the press
release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated by reference into this Item 7.01.
In accordance with General Instruction B.2 of Form 8-K, the information set
forth in this Item 7.01 and in the attached Exhibit 99.1 shall be deemed to be
"furnished" and shall not be deemed to be "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended.
This Current Report on Form 8-K shall not constitute an offer to sell or the
solicitation of an offer to buy shares of the Company's common stock, nor shall
there be any sale of shares of the Company's common stock in any jurisdiction in
which such an offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such jurisdiction.
This Current Report on Form 8-K contains "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements related to the potential
future sale of shares of the Company's common stock and price for such sales
under the Purchase Agreement. The words "may," "will," "could," "would,"
"should," "expect," "intend," "plan," "anticipate," "believe," "estimate,"
"predict," "project," "potential," "continue," "ongoing" and similar expressions
are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. While the Company
believes its plans, intentions and expectations reflected in those
forward-looking statements are reasonable, these plans, intentions or
expectations may not be achieved. The Company's actual results, performance or
achievements could differ materially from those contemplated, expressed or
implied by the forward-looking statements. For information about the factors
that could cause such differences, please refer to the Company's Annual Report
on Form 10-K for the year ended April 30, 2020, including the information
discussed under the captions "Item 1 Business," "Item 1A. Risk Factors" and
"Item 7 Management's Discussion and Analysis of Financial Condition and Results
of Operations," as well as the Company's various other filings with the SEC.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. The Company assumes no obligation to update any
Item 9.01 Financial Statements and Exhibits.
*4.1 Registration Rights Agreement, dated September 18, 2020 between Ocean
Power Technologies, Inc. and Aspire Capital Fund, LLC.
*10.1 Common Stock Purchase Agreement, dated September 18, 2020, between
Ocean Power Technologies, Inc. and Aspire Capital Fund, LLC.
**99.1 Press release dated September 18, 2020 announcing the Aspire Capital
* Filed herewith.
** Furnished herewith.
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