NOTE:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See §240.13d-7 for other parties to whom copies are to be sent.

 

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

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CUSIP No. 315721100

Page 2 of 5

 

 

On March 7, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”), included as Exhibit 1, with certain of its existing investors pursuant to which the Company agreed to sell a total of 8,000 units (the “Units”) for a purchase price of $1,000 per Unit, with each Unit consisting of (i) one share of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”), with an initial stated value of $1,000 and convertible into 1,289 shares of Common Stock, with a conversion price of $0.7757 (the “Conversion Shares”), and (ii) warrants to purchase 1,289 shares of Common Stock (the “Warrant”) (collectively, the “Offering”).  Each Warrant has an exercise price of $0.84591 per share, is exercisable six months after the date of issuance (the “Initial Exercise Date”) and expires five years from the date of issuance.  NRM VII purchased 1,746 Units, comprised of (i) 1,746 shares of Series A Preferred Stock convertible into 2,250,594 shares of Common Stock and (ii) warrants to purchase 2,250,594 shares of Common Stock.  Kapital Joe purchased 106 Units, comprised of (i) 106 shares of Series A Preferred Stock convertible into 136,634 shares of Common Stock and (ii) warrants to purchase 136,634 shares of Common Stock.  Mascara Kaboom purchased 3 Units, comprised of (i) 3 shares of Series A Preferred Stock convertible into 3,867 shares of Common Stock and (ii) warrants to purchase 3,867 shares of Common Stock. Intrexon purchased 1,161 Units, comprised of (i) 1,161 shares of Series A Preferred Stock convertible into 1,496,529 shares of Common Stock and (ii) warrants to purchase 1,496,529 shares of Common Stock. The Offering closed on March 8, 2017.

While the Series A Preferred Stock and Warrants were sold together as a Unit, the Series A Preferred Stock and Warrants were issued separately.  There is no established public trading market for the Series A Preferred Stock or the Warrants, and the Company does not expect any such market to develop.  In addition, the Company does not intend to apply for listing of the Series A Preferred Stock or the Warrants on any national securities exchange or other nationally recognized trading system.

The form of Purchase Agreement contains customary representations, warranties, and agreements by the Company. The Purchase Agreement also contains customary prohibitions on certain Company payments, the incurrence of certain senior and pari passu debt, certain affiliate transactions and the incurrence of certain liens.

The rights, preferences and privileges of the Series A Preferred Stock are set forth in a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, included as Exhibit 3 (the “Certificate of Designation”). Each share of Series A Preferred Stock has an initial stated value of $1,000 and is convertible into 1,289 shares of Common Stock at a conversion price of $0.7757 per share of Common Stock, subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or similar events.  Holders of the Series A Preferred Stock are entitled to receive cumulative dividends at a rate per share of 4% per annum (with such dividend rate increasing to 8% per annum on the five-year anniversary of the original issuance of the Series A Preferred Stock), with such dividends compounded quarterly by increasing the stated value of the Series A Preferred Stock in accordance with the terms of the Certificate of Designation.  The shares of Series A Preferred Stock contain an ownership limitation requiring the Investors to provide 61-days’ advance written notice prior to conversion.

Shares of Series A Preferred Stock generally have no voting rights, except as required by law; provided, however, that without the prior written consent of the holders of at least 70% of the then outstanding shares of Series A Preferred Stock, the Company may not: (i) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation; (ii) amend the Company’s certificate of incorporation or other charter documents in any manner that adversely affects any rights of a holder of the Series A Preferred Stock; (iii) authorize or create any class of stock ranking as to redemption, distribution of assets upon liquidation or dividends senior to, or otherwise pari passu with, the Series A Preferred Stock; (iv) declare or make any dividends other than dividend payments or other distributions payable solely in the Common Stock; or (v) enter into any agreement with respect to any of the foregoing.

Upon a liquidation, dissolution or winding up of the Company, the holders of the Series A Preferred Stock are entitled to receive out of the Company’s assets, whether capital or surplus, an amount equal to such holder’s then stated value for each share of Series A Preferred Stock before any distribution to the holders of the Common Stock, any class or series of preferred stock and all other Common Stock equivalents other than those securities which are explicitly senior or pari passu to the Series A Preferred Stock in redemption, distribution of assets upon a liquidation or dividends.  If there are insufficient assets to pay in full such amounts, then the available assets will be ratably distributed to the holders of the Series A Preferred Stock in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

CUSIP No. 315721100

Page 4 of 5

 

Each Warrant, included as Exhibit 2, is exercisable during the period commencing after the Initial Exercise Date and ending on the fifth anniversary of the date of issuance. The exercise price of the Warrants is subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or similar events.  The Warrants contain an ownership limitation requiring the Investors to provide 61-days’ advance written notice prior to exercise.

The foregoing descriptions of the Purchase Agreement, the Warrants, and the Certificate of Designation, do not purport to be complete, and are qualified in their entirety by reference to the form of each such document, which are filed as Exhibit 1, Exhibit 2 and Exhibit 3, respectively.