Identive Group announced today that it has entered into a $20 million common stock purchase agreement with Lincoln Park Capital Fund (LPC), a Chicago-based institutional investor. Following its execution of the agreement, LPC will purchase $2 million in common stock from Identive at a purchase price of $1.14 per share, the closing price on April 15, 2013. Over the next three years, Identive has the right to sell up to an additional $18 million of its common stock to LPC under terms set forth in the agreement. Proceeds from LPC's funding will be used to support working capital requirements and for general corporate purposes, including ongoing investment in products and technologies to support the Company's growth strategy.
Identive Group announced today that it has entered into a $20 million common stock purchase agreement with Lincoln Park Capital Fund (LPC), a Chicago-based institutional investor. Following its execution of the agreement, LPC will purchase $2 million in common stock from Identive at a purchase price of $1.14 per share, the closing price on April 15, 2013. Over the next three years, Identive has the right to sell up to an additional $18 million of its common stock to LPC under terms set forth in the agreement. Proceeds from LPC's funding will be used to support working capital requirements and for general corporate purposes, including ongoing investment in products and technologies to support the Company's growth strategy.
Commenting on the new financing, Identive's chief executive officer, Ayman S. Ashour said, “The technology and market investments we have made over the past three years are now driving strong growth in emerging areas of our business, including NFC, mobility and cloud solutions, and fueling renewed momentum for our ID products, including both readers and transponders. This additional source of financing strengthens our balance sheet and allows us to maintain adequate levels of investment to continue to build on the progress we have made. To minimize dilution for our current investors, we have opted for an approach that allows us to access capital incrementally and as needed over a long period.”
Under the terms of the agreement, there are no upper limits to the price that LPC may pay to purchase Identive's common stock. Following the initial sale of its shares, Identive will control the timing of any future sales and the amount of shares to be sold. LPC has no right to require any sales and is obligated to purchase common stock as directed by Identive. Under the terms of the agreement, LPC has agreed not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of Identive's shares of common stock. In consideration for entering into the agreement, Identive will issue shares of common stock to LPC as a commitment fee. The shares covered under the agreement are the subject of a prospectus supplement pursuant to Identive's effective shelf registration statement and base prospectus contained therein. The closing of the sale of the shares is subject to the satisfaction of certain customary closing conditions contained in the purchase agreement.
Jonathan Cope, a founder and managing member of LPC, said, “We are very pleased to be entering into this agreement with Identive. We at Lincoln Park are impressed by the Company's technology portfolio and its strong presence across the secure identification industry.”
Bayridge Securities, a registered broker-dealer and FINRA member, acted as placement agent in connection with this transaction. Additional details regarding the financing are included in a Current Report on Form 8-K filed today by Identive with the Securities and Exchange Commission. This press release does not and shall not constitute an offer to sell or the solicitation of any offer to buy any of the securities, nor shall there be any sale of the securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.