eMagin Corp. has entered into an early warrant exercise transaction with certain of the Company’s warrant holders through a letter agreement between such warrant holders and the Company to raise approximately US$4.5 million in gross proceeds.
A portion of the proceeds from the transaction will be utilised to fund the Company’s growth initiatives with consumer AR/VR partnerships and for the Company’s consumer product launch in Q4 2016. As an incentive for the warrant holders exercising their warrants in full, the warrant holders will be issued new warrants to purchase up to 2,947,949 unregistered shares of the Company’s common stock, in the aggregate, at an exercise price of US$2.60 per share, through a private placement.
Approximately US$4.5 million of the Company’s warrants have been exercised during the exercise period representing 2,216,500 of the total warrants outstanding. The remaining warrants continue to be exercisable at a price of US$2.05 at any time prior to June 23, 2021.
Craig-Hallum Capital Group LLC is acting as the exclusive placement agent for this transaction. The warrants to be issued in this transaction have not been registered under the Securities Act of 1933, as amended (the Securities Act), or state securities laws.
The issuance of the warrants is exempt from the registration requirements of 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 and Rule 506 of Regulation D promulgated under the Securities Act. The Company made this determination based on the representations that each party is an “accredited investor” within the meaning of Rule 501 of Regulation D.