XNPT » Topics » Recent Sales of Unregistered Securities

This excerpt taken from the XNPT 10-K filed Mar 17, 2006.
Recent Sales of Unregistered Securities
 
From January 1, 2005 to December 31, 2005, we issued and sold the following unregistered securities:
 
(1) On January 4, 2005, we granted stock options to employees, consultants and directors under our 1999 stock option plan covering an aggregate of 361,103 shares of our common stock, at a weighted-average exercise price of $6.00 per share and an aggregate price of approximately $2,166,618.
 
(2) On January 21, 2005, we granted stock options to employees, consultants and directors under our 1999 stock option plan covering an aggregate of 16,000 shares of our common stock, at a weighted-average exercise price of $7.50 per share and an aggregate price of approximately $120,000.
 
(3) In March 2005, pursuant to the exercise of a warrant, we issued 10,208 shares of our Series A convertible preferred stock, convertible into the same number of shares of our common stock, to Comdisco Ventures Fund A, LLC.
 
(4) In March 2005, pursuant to the exercise of a warrant, we issued 2,041 shares of our Series A convertible preferred stock, convertible into the same number of shares of our common stock, to CNC Holdings I LLC.
 
(5) On June 7, 2005, immediately prior to the closing of our initial public offering, we issued 71,080 shares of our Series D convertible preferred stock payable as in-kind dividends on the outstanding Series D convertible preferred stock pursuant to the terms of our Restated Certificate of Incorporation in effect prior to our initial public offering. Concurrently with the closing of our initial public offering, this Series D convertible preferred stock automatically converted into 71,080 shares of common stock.
 
The issuances described in paragraphs (1) and (2) above were deemed exempt from registration under the Securities Act in reliance on either (i) Rule 701 promulgated under the Securities Act as offers and sale of securities pursuant to certain compensatory benefit plans and contracts relating to compensation in compliance with Rule 701 or (ii) Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering.
 
The sales and issuances of securities in the transactions described in paragraphs (3), (4) and (5) were exempt from registration pursuant to the Securities Act by virtue of Section 4(2) and/or Regulation D promulgated thereunder as transactions not involving any public offering. The purchasers of securities for which the registrant relied on Regulation D represented that they were accredited investors as defined under the Securities Act. We believe that the issuances are exempt from the registration requirements of the Securities Act on the basis that: (a) the purchasers of the securities represented that they were accredited investors as defined under the Securities


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Act; (b) there was no general solicitation; and (c) the purchasers of the securities represented that they were purchasing such shares for their own account and not with a view towards distribution. The shares of our common stock will carry a legend stating that the shares are not registered under the Securities Act and therefore cannot be resold unless they are registered under the Securities Act or unless an exemption to registration is available.
 
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