Business Context and Reporting Period
This Form 8-K Current Report was filed by Akers Biosciences, Inc. on April 5, 2017, covering events that occurred on March 30, 2017. The filing details the completion of a private placement offering of common stock and warrants.
Key Financial Metrics
The filing reports the following specific financial data related to the capital raise:
- Gross Proceeds: $2,027,760 raised from the sale of Common Stock and Purchaser Warrants.
- Offering Price: $1.40 per share of Common Stock.
- Placement Agent Compensation:
- Cash fee: 7% of gross proceeds.
- Warrants: 72,420 Placement Agent Warrants.
- Expense Reimbursement: $50,000.
- Warrant Terms: Both Purchaser Warrants and Placement Agent Warrants have a strike price of $1.96. Purchaser Warrants are exercisable from September 30, 2017, through March 30, 2022. Placement Agent Warrants are exercisable from September 30, 2017, through January 9, 2022.
The filing text does not provide clear values for revenue, profit, cash flow, margins, debt, or liquidity metrics outside of the transaction details.
Material Changes
The primary material change is the entry into definitive agreements for a private placement offering completed on March 30, 2017. The Company entered into a Placement Agency Agreement with Joseph Gunnar & Co., LLC, a Securities Purchase Agreement with four purchasers, and a Registration Rights Agreement. The securities were issued pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933 (Regulation D, Rule 506(b)).
Outlook, Risks, and Contingencies
Registration Rights: The Company is obligated to file a Registration Statement with the SEC covering the resale of the SPA Securities. The Company must use its best efforts to have the statement declared effective by April 19, 2017, or May 19, 2017, in the event of a full SEC review.
Future Participation: The Purchasers have the right to participate in a subsequent offering of the Company's securities in an aggregate amount of up to 35% of that subsequent offering.
Risks: The filing notes that the description of the agreements is qualified by the complete text of the attached exhibits. No specific operational risks or contingencies beyond the standard terms of the agreements are detailed in the summary text.
Investor Verification Checklist
- Verify the final net proceeds after deducting the 7% cash fee and $50,000 expense reimbursement.
- Confirm the dilution impact of the 72,420 Placement Agent Warrants and the Purchaser Warrants (50% of shares sold).
- Monitor the status of the Registration Statement filing to ensure it meets the April 19, 2017, or May 19, 2017, effectiveness deadlines.
- Review the full text of Exhibits 10.1, 10.2, and 10.3 for customary representations, warranties, and indemnification obligations.