Item
3.02 Unregistered Sales of Equity
Securities.
On
October 31, 2009, SpectraScience, Inc. (the “Company”) closed a private
placement offering with certain accredited investors pursuant to which the
Company sold an aggregate of 433,000 units at a price of $10.00 per unit for
aggregate gross proceeds of $4,330,000. The units were sold
between May 2009 and October 2009. The Company had previously
announced that from May, 2009 to June, 2009, pursuant to this same private
placement offering it had sold to accredited investors 53,000 units at a
price of $10.00 per unit for aggregate gross proceeds of $530,000.
Each unit
consists of 50 shares of the Company’s Series B Preferred Stock (“Preferred
Stock”) and 25 warrants to purchase one share of the Company’s common stock at
an exercise price of $0.30 per share. The warrants have a term of
five years. Each share of Preferred Stock is convertible into one
share of common stock, subject to certain adjustment in the event of merger,
stock splits and other customary events, and provides an 8% cumulative dividend
until conversion. Generally, the Preferred Stock may be converted at
any time into shares of common stock and shall automatically be converted into
common stock generally in the event that (i) the Company completes a Qualified
Offering, or (ii) the underlying common stock may be sold pursuant to an
effective registration statement or otherwise may be sold pursuant to exemption
from registration and (iii) the average market price of the common stock is at
least $0.20 for a period of 10 days prior to conversion and certain volume
conditions are met. The Company will prepare and file with the
Securities and Exchange Commission a registration statement covering the resale
of the shares of common stock issuable upon conversion of the Preferred Stock
and exercise of the warrants issued in the offering.
The
Company retained certain SEC registered broker/dealers and, members of the
National Association of Securities Dealers (NASD), as selling agents in
connection with certain of the subscriptions in the private placement
offering. Pursuant to the terms of the Private Placement Memorandum,
the Company paid the selling agents cash commissions of approximately $413,000
and an expense reimbursements of $82,600, and the Company has also agreed to
issue selling agent warrants to purchase 2,095,000 shares of common stock at an
exercise price of $.35 per share. The warrants to be issued to the
various selling agents contain substantially the same terms as the warrants
issued to the investors in the private placement offering.
The
foregoing description of the private placement is qualified in its entirety by
reference to the full text to the form of Subscription Agreement, Certificate of
Designation of the Preferred Stock and the form of warrant, a copy of each of
which is attached hereto as Exhibit 4.4, 4.5, and 4.6 respectively, and each of
which is incorporated herein in its entirety by reference.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
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4.4
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Form
of Subscription Agreement.
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4.5
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Form
of Warrant.
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4.6
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Certificate
of Designation of Rights and Preferences of Series B Preferred Stock of
SpectraScience, Inc.
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