ClearSign Technologies Corporation (CLIR) recently announced that clirSPV LLC fully exercised its purchase right option. ClearSign is an emerging leader in industrial combustion and sensing technologies that improve safety, operational efficiency and energy while significantly reducing emissions. The company previously granted the clirSPV LLC with the Purchase Right option as per terms of the waiver entered into by the Company and clirSPV LLC on August 19, 2020.
In fully exercising the Purchase Right option, clirSPV came purchasing a total of 654,425 unregistered shares of common stock of ClearSign at a price of $2.00 per share. On the other hand, ClearSign received proceeds of approximately $1,309,000 from the exercise of that Purchase Right. The company is intending utilizing the proceeds for working capital, general corporate as well other purposes including marketing and sales; and research and development.
The company has to go through a private placement of its common stock related to a previous Stock Purchase Agreement it has entered into on July 12, 2018. Pursuant to that agreement, ClearSign granted clirSPV LLC a right to purchase certain new equity securities that the Company sells for the purpose of raising capital. The grant was to make clirSPV able to maintain a 19.99 percentage in the company and was on similar terms and conditions offered to other purchasers (the “Participation Right”).
As certain elements of the Participation Right including the notice provisions were not compatible with raising capital in a public offering, the company entered into a written waiver with clirSPV. In that waiver granted on August 18, 2020 and fully executed on August 19, 2020, clirSPV not exercised its Participation Right in a public offering completed by the ClearSign on August 24, 2020. The company then to allow clirSPV to maintain its Percentage Ownership in the company granted it with Purchase Right. That allowed clirSPV to directly purchase unregistered shares of ClearSign’s common stock at the price sold to investors in the offering.