As filed with the Securities and Exchange Commission on January 12, 2022April 25, 2023

Registration No. 333-_______333-           

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-3

 

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

 

Crown Electrokinetics Corp.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware 47-5423944
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S.IRS Employer
Identification Number)

 

1110 NE Circle Blvd.,

Corvallis, Oregon 97330

(800) 674-3612

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

DougDouglas Croxall

Chief Executive Officer

1110 NE Circle Blvd.

Corvallis, Oregon 97330

(800) 674-3612


(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

 

CopiesPlease send copies of all communications to:

 

M. Ali Panjwani, Esq.

Pryor Cashman LLP

7 Times Square

New York, New York 10036

(212) 326-0820421-4100

 

Approximate date of commencement of proposed sale to the public: From time to timeAs soon as practicable after the effective date of this registration statement.Registration Statement. 

 

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.

 

If any of the securities being registered on this formForm are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. box:

 

If this formForm is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

 

If this formForm is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

 

If this formForm is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.

 

If this formForm is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to ruleRule 413(b) under the Securities Act, check the following box.

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,”filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:Act. 

 

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

 

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities To Be Registered Amount
To Be  
Registered
  Proposed
Maximum
Offering
Price
Per Share
  Proposed
Maximum
Aggregate
Offering
Price
  Amount Of
Registration
Fee
 
Primary Offering(1):            $100,000,000(2) $9,270.00 
Common Stock, par value $0.001 per share   (1)   (2)   (2)    
Preferred Stock, par value $0.001 per share   (1)   (2)   (2)    
Debt Securities   (1)   (2)   (2)    
Warrants   (1)   (2)   (2)    
Rights   (1)   (2)   (2)    
Units   (1)   (2)   (2)    
Secondary Offering:                
Common Stock, par value $0.001 per share  2,000,000(3) $3.22(4) $6,440,000(4) $596.99 
TOTAL         $106,440,000  $9,866.99 

(1)There are being registered under this Registration Statement such indeterminate number of shares of common stock and preferred stock, such indeterminate principal amount of debt securities, such indeterminate number of warrants to purchase common stock, preferred stock and/or debt securities, such indeterminate number of rights to purchase common stock or preferred stock and such indeterminate number of units as may be sold by the Registrant from time to time, which together shall have an aggregate initial offering price not to exceed $100,000,000. If the Registrant issues any debt securities at an original issue discount, then the offering price of such debt securities shall be in such greater principal amount at maturity as shall result in an aggregate offering price not to exceed $100,000,000, less the aggregate dollar amount of all securities previously issued hereunder. The Registrant may sell any securities it is registering under this Registration Statement separately or as units with the other securities it is registering under this Registration Statement. The Registrant will determine, from time to time, the proposed maximum offering price per unit in connection with its issuance of the securities it is registering under this Registration Statement. The securities it is registering under this Registration Statement also include such indeterminate number of shares of common stock and preferred stock and such indeterminate principal amount of debt securities as the Registrant may issue upon conversion of or exchange for preferred stock or debt securities that provide for conversion or exchange, upon exercise of warrants or rights or pursuant to the anti-dilution provisions of any of such securities. In addition, pursuant to Rule 416 under the Securities Act of 1933 (the “Securities Act”), the shares the Registrant is registering under this Registration Statement include such indeterminate number of shares of common stock and preferred stock as may be issuable with respect to the shares the Registrant is registering as a result of stock splits, stock dividends or similar transactions.
(2)The Registrant will determine the proposed maximum aggregate offering price per class of security from time to time in connection with its issuance of the securities the Registrant is registering under this Registration Statement and the Registrant is not specifying such price as to each class of security pursuant to General Instruction II.D. of Form S-3 under the Securities Act.
(3)The shares being registered in connection with the secondary offering relate to the resale by the selling stockholder named herein of up to 2,000,000 shares of common stock of the Registrant that were acquired by the selling stockholder in connection with Registrant’s formation and through the selling stockholder’s service as Registrant’s Chairman and Chief Executive Officer, and an indeterminate number of shares of common stock of the Registrant as may be issuable from time to time as a result of a stock split, stock dividend, capitalization or similar event. The Registrant will not receive any proceeds from the sale of its common stock by the selling stockholder.
(4)

The estimated price of $3.22 per share, which is the average of the high and low prices of the Registrant’s common stock as reported on the Nasdaq Capital Market on January 10, 2022 is set forth solely for the purpose of calculating the fee pursuant to Rule 457(c) under the Securities Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a), may determine.

 

 

 

 

 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED JANUARY 12, 2022

PRELIMINARY PROSPECTUSSUBJECT TO COMPLETION DATED APRIL 25, 2023

64,719,258 Shares

 

Crown Electrokinetics Corp.

 

$100,000,000

Common Stock
Preferred Stock

Debt Securities

 Warrants

Rights

Units

UpThis prospectus relates to 2,000,000 Shares of Common Stock Offering by the Selling Stockholder

We may offerresale, from time to time, by the selling stockholders named herein (the “Selling Stockholders”) of (i) an aggregate of 5,000,000 shares of our common stock, preferredpar value $0.0001 per share (“common stock”), issuable upon the conversion of shares of our Series E Preferred Stock (the “Series E Preferred Stock”), (ii) an aggregate of 45,000,000 shares of common stock senior debtissuable upon the conversion of shares of our Series E Preferred Stock issuable upon exercise of certain outstanding warrants to purchase Series E Preferred Stock (the “Series E Warrants”), and (iii) an aggregate of 14,719,258 shares of common stock issuable upon exercise of certain outstanding warrants (the “Common Warrants” and, together with the Series E Warrants, the “Warrants”).

We are not selling any securities (whichunder this prospectus and we will not receive proceeds from the sale of the shares of our common stock by the Selling Stockholders. However, we may be convertible into or exchangeable forreceive proceeds from the cash exercise of the Warrants, which, if exercised in cash at the current applicable exercise price, with respect to all of the 59,719,258 shares of common stock), subordinated debt securities (which may be convertible into or exchangeable for common stock), warrants, rights and units that include anystock, would result in gross proceeds to us of these securities. approximately $27,235,185.

We will offerpay the securities in amounts, at pricesexpenses of registering the shares of common stock offered by this prospectus, but all selling and other expenses incurred by the Selling Stockholders will be paid by the Selling Stockholders. The Selling Stockholders may sell our shares of common stock offered by this prospectus from time to time on terms to be determined at the time of the offering.

The selling stockholder namedsale through ordinary brokerage transactions or through any other means described in this prospectus under “Plan of Distribution.” The prices at which the Selling Stockholders may also offer up to 2,000,000sell shares ofwill be determined by the prevailing market price for our common stock from time to timeor in connection with one or more offerings, at prices and on terms that will be determined in such offerings. We will not receive any proceeds from the sale of any securities by the selling stockholder.negotiated transactions.

 

Each time we sell securities hereunder, we will attach a supplement to this prospectus that contains specific information about the terms of the offering, including the price at which we are offering the securities to the public. In the case of an offering by the selling stockholder, information about the selling stockholder, including the relationship between the selling stockholder and us, will also be included in the applicable prospectus supplement. The prospectus supplement may also add, update or change information contained or incorporated in this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. You should read this prospectus, the information incorporated by reference in this prospectus, the applicable prospectus supplement and any applicable free writing prospectus carefully before you invest in our securities.

The securities hereunder may be offered directly by us, through agents designated from time to time by us or to or through underwriters or dealers. If any agents, dealers or underwriters are involved in the sale of any securities, their names, and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement. See the section entitled “About This Prospectus” for more information.

The aggregate market value of our outstandingOur common stock held by non-affiliates is $ 49,066,408 basedquoted on 14,530,126 shares of outstanding common stock, of which 2,232,781 are held by affiliates, and a per share price of $3.99 based onThe Nasdaq Capital Market, or Nasdaq, under the closingsymbol “CRKN.” On April 24, 2023, the last reported sale price offor our common stock on December 31, 2021. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell our common stock in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75,000,000. We have not offered any securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus.

Nasdaq was $0.09.

 

Investing in our securities involves certain risks.a high degree of risk. See “Risk Factors” beginning on page 1217 of this prospectus andfor a discussion of information that should be considered in the applicable prospectus supplement, as updatedconnection with an investment in our future filings made with the Securities and Exchange Commission that are incorporated by reference into this prospectus. You should carefully read and consider these risk factors before you invest in our securities.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacydetermined if this prospectus is truthful or accuracy of this prospectus.complete. Any representation to the contrary is a criminal offense.

 

The date of this prospectus is                        , 20222023.

 

 

 

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUSii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSiii
THE COMPANYPROSPECTUS SUMMARY1
RISK FACTORS1217
PRIVATE PLACEMENTS21
USE OF PROCEEDS1323
SELLING STOCKHOLDER13
DESCRIPTION OF CAPITAL STOCKSECURITIES1323
DESCRIPTION OF COMMON STOCKSELLING STOCKHOLDERS1429
DESCRIPTION OF PREFERRED STOCK15
DESCRIPTION OF DEBT SECURITIES17
DESCRIPTION OF WARRANTS19
DESCRIPTION OF RIGHTS21
DESCRIPTION OF UNITS22
PLAN OF DISTRIBUTION2335
LEGAL MATTERS2537
EXPERTS2537
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE26
WHERE YOU CAN FIND MOREADDITIONAL INFORMATION2737
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE38

The distribution of this prospectus may be restricted by law in certain jurisdictions. You should inform yourself about and observe any of these restrictions. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this document are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this prospectus does not extend to you.

We have not authorized anyone to give any information or make any representation about us that is different from, or in addition to, that contained in this prospectus, including in any of the materials that we have incorporated by reference into this prospectus, any accompanying prospectus supplement, and any free writing prospectus prepared or authorized by us. Therefore, if anyone does give you information of this sort, you should not rely on it as authorized by us. You should rely only on the information contained or incorporated by reference in this prospectus and any accompanying prospectus supplement.

You should not assume that the information contained in this prospectus and any accompanying supplement to this prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus and any accompanying supplement to this prospectus is delivered or securities are sold on a later date. Neither the delivery of this prospectus, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date hereof or that the information incorporated by reference herein is correct as of any time subsequent to the date of such information.

 

i

 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement on Form S-3 that we filed with the U.S. Securities and Exchange Commission (the “SEC”). You should read this prospectus and the information and documents incorporated herein by reference carefully. Such documents contain important information you should consider when making your investment decision. See “Where You Can Find Additional Information” and “Incorporation of Certain Documents by Reference” in this prospectus.

You should rely only on the information contained in or the SEC, using a “shelf” registration process. Underincorporated by reference into this shelf registration process,prospectus. Neither we and/ornor the selling stockholderstockholders named herein (the “Selling Stockholders”) have authorized anyone to be namedprovide you with information different from, or in aaddition to, that contained in or incorporated by reference into this prospectus. This prospectus supplementis an offer to sell only the securities offered hereby but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in or incorporated by reference into this prospectus is current only as of their respective dates or on the date or dates that are specified in those documents. Our business, financial condition, results of operations and prospects may from timehave changed since those dates.

The Selling Stockholders are not offering to time,sell or seeking offers to purchase these securities in any jurisdiction where the offer and sell sharesor sale is not permitted. Neither we nor the Selling Stockholders have done anything that would permit this offering or possession or distribution of our common stock; and we may, from time to time, offer and sell any combination of the securities described in this prospectus in one or more offerings.any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the jurisdiction of the United States who come into possession of this prospectus are required to inform themselves about and to observe any restrictions relating to this Offering and the distribution of this prospectus applicable to that jurisdiction.

 

This prospectus provides certain general information aboutIf required, each time the securities that we and/or the selling stockholder maySelling Stockholders offer hereunder. Each time we and/or the selling stockholder sell securities,shares of common stock, we will provide you with, in addition to this prospectus, a prospectus supplement that will contain specific information about the terms of the offering and the offered securities.that offering. We may also authorize the Selling Stockholders to use one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. In eachthat offering. We may also use a prospectus supplement we will include the following information:

the number and type of securities that we propose to sell;

the public offering price;

the names of any underwriters, agents or dealers through or to which the securities will be sold;

any compensation of those underwriters, agents or dealers;

any additional risk factors applicable to the securities or our business and operations; and

any other material information about the offering and sale of the securities.

In addition, the prospectus supplement orand any related free writing prospectus may alsoto add, update or change any of the information contained in this prospectus or in documents we have incorporated by reference. This prospectus, together with any applicable prospectus supplements, any related free writing prospectuses and the documents incorporated by reference into this prospectus, includes all material information relating to this offering. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus. Theprospectus, the statements made in this prospectus will be deemed modified or superseded by those made in a prospectus supplement. Please carefully read both this prospectus and any prospectus supplement or free writing prospectus will supersede this prospectustogether with the additional information described below under the section entitled “Incorporation of Certain Documents by Reference” before buying any of the securities offered.

Unless the context otherwise requires, the terms “Crown,” “the Company,” “we,” “us” and “our” refer to the extent it contains information that is different from, or that conflicts with, theCrown Electrokinetics Corp.

Unless otherwise indicated, information contained in this prospectus or incorporated by reference herein concerning our industry and the markets in this prospectus. You should readwhich we operate is based on information from independent industry and consider allresearch organizations, other third-party sources (including industry publications, surveys and forecasts), and management estimates. Management estimates are derived from publicly available information contained in this prospectus, any accompanying prospectus supplementreleased by independent industry analysts and any free writing prospectus thatthird-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets, which we believe to be reasonable. Although we believe the data from these third-party sources is reliable, we have authorized for usenot independently verified any third-party information. In addition, projections, assumptions and estimates of the future performance of the industry in connection withwhich we operate and our future performance are necessarily subject to uncertainty and risk due to a specific offering,variety of factors, including those described in making your investment decision. You should also read“Risk Factors” and consider the information contained“Cautionary Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the documents identified underestimates made by the heading “Incorporation of Certain Documentsindependent parties and by Reference” and “Where You Can Find More Information” in this prospectus.

Unless the context otherwise requires, the terms “the Company,” “Crown,” “we,” “us,” and “our” in this prospectus each refer to Crown Electrokinetics Corp.us.

 

ii

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Some ofWhen used in this prospectus, including the statements contained ordocuments that we have incorporated by reference, in this prospectus may befuture filings with the SEC or in press releases or other written or oral communications, statements which are not historical in nature, including those containing words such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters, are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). In particular, statements pertaining to our trends, liquidity and may involve material risks, assumptions and uncertainties. Forward-looking statements typically are identified by the use of terms such as “may,” “will,” “should,” “believe,” “might,” “expect,” “anticipate,” “intend,” “plan,” “estimate” and similar words, although somecapital resources, among others, contain forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Examples of forward-looking statements include, but are expressed differently.not limited to, statements about the following:

 

our prospects, including our future business, revenues, expenses, net income, earnings per share, gross margins, profitability, cash flows, cash position, liquidity, financial condition and results of operations, backlog of orders and revenue, our targeted growth rate, our goals for future revenues and earnings, and our expectations about realizing the revenues in our backlog and in our sales pipeline;

Although we believe that the expectations reflected in such forward-looking

the potential impact of COVID-19 on our business and results of operations;

the effects on our business, financial condition and results of operations of current and future economic, business, market and regulatory conditions, including the current economic and market conditions and their effects on our customers and their capital spending and ability to finance purchases of our products, services, technologies and systems;

��

the effects of fluctuations in sales on our business, revenues, expenses, net income, earnings per share, margins, profitability, cash flows, capital expenditures, liquidity, financial condition and results of operations;

our products, services, technologies and systems, including their quality and performance in absolute terms and as compared to competitive alternatives, their benefits to our customers and their ability to meet our customers’ requirements, and our ability to successfully develop and market new products, services, technologies and systems;

our markets, including our market position and our market share;

our ability to successfully develop, operate, grow and diversify our operations and businesses;

our business plans, strategies, goals and objectives, and our ability to successfully achieve them;

the sufficiency of our capital resources, including our cash and cash equivalents, funds generated from operations and other capital resources, to meet our future working capital, capital expenditure and business growth needs;

the value of our assets and businesses, including the revenues, profits and cash flows they are capable of delivering in the future;

the effects on our business operations, financial results, and prospects of business acquisitions, combinations, sales, alliances, ventures and other similar business transactions and relationships;

industry trends and customer preferences and the demand for our products, services, technologies and systems; and

the nature and intensity of our competition, and our ability to successfully compete in our markets.

These statements are reasonable, these statementsnecessarily subjective, are not guarantees of future performancebased upon our current plans, intentions, objectives, goals, strategies, beliefs, projections and expectations, and involve certainknown and unknown risks, uncertainties and uncertaintiesother important factors that are difficult to predict, and which maycould cause our actual outcomes andresults, performance or achievements, or industry results, to differ materially from what is expressedany future results, performance or forecastedachievements described in or implied by such forward-looking statements. TheseActual results may differ materially from expected results described in our forward-looking statements, speak only asincluding with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of the datepublicly-available information with respect to the factors upon which our business strategy is based, or the success of our business.

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Forward-looking statements are based on which theyinformation available at the time those statements are made and exceptmanagement’s belief as required by law, we undertake no obligation to publicly release the results of any revision or update of these forward-looking statements, whether as a result of new information, future events or otherwise. If we do update or correct one or more forward-looking statements, you should not conclude that we will make additional updates or corrections with respect thereto ortime with respect to other forward-looking statements. A detailed discussion offuture events and are subject to risks and uncertainties that could cause actual performance or results and events to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that may cause actual results, our performance or achievements, or industry results to differ materially from those contemplated by such forward-looking statements is includedinclude, without limitation, those discussed under the caption “Risk Factors” in this prospectus as well as other risks and factors identified from time to time in our periodic reports filed with the SEC and in the “Risk Factors” section of this prospectus.filings.

 

iii

 

 

THE COMPANYPROSPECTUS SUPPLEMENT SUMMARY

 

OverviewThis summary highlights information contained elsewhere or incorporated by reference in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. We urge you to read this entire prospectus and the documents incorporated by reference herein carefully, including the financial statements and notes to those financial statements incorporated by reference herein and therein. Please read the section of this prospectus entitled “Risk Factors” for more information about important risks that you should consider before investing in our common stock.

 

Crown Electrokinetics Corp. (“Crown” or the “Company”) developsOur Company

Business Overview

We develop and sellssell optical switching film that can be embedded between sheets of glass or applied to the surface of glass, or other rigid substrates such as acrylic, to electronically control opacity (“DynamicTint™”). Originally developed by Hewlett-Packard (“HP”), our technology allows a transition between clear and dark in seconds and can be applied to a wide array of windows, including commercial buildings, automotive sunroofs, and residential skylights and windows. At the core of Crown’sour proprietary and patent-protected technology is a thin film that is powered by electrically charged pigment which can reduce heat gain replacing common window tints but also providing a more sustainable alternative to blinds and other traditional window treatments. We partner with leading glass and film manufacturers for mass production and distribution of DynamicTint.

 

Electrokinetic Film Technology

 

Crown’sOur electrokinetic (EK) technology was derived from proprietary ink and microfluidic technology developed at HP. Electrokinetic refers to the movement of particles within a fluid under the influence of an electric field. Our EK film technology utilizes nanometer-sized pigment particles that are electrically charged and suspended in a liquid that is sandwiched between two clear substrates that are coated with a transparent conductor oxide (TCO) film. Figure 1. In a non-energized state, the suspended pigment particles are distributed uniformly between the plastic films, and will absorb, transmit, or reflect light depending on the properties of the suspended pigment (dark state). When the proper electrical signal is applied to the conductive TCO layers, an electrical field is created, and the charged pigment particles collect in micro-embossed holes in a layer of polymer resin covering the transparent conductor surface. As the charged pigment particles are collected, the fluid becomes highly transparent (clear state). By applying a different electrical signal, the pigment can be dispersed back into the fluid to achieve the desired color density or opaqueness.

 

 

CLEAR STATEDARK STATE

 

Figure 1. Schematic cross-section of electrokinetic film in clear and dark states.

 

1

Highlights

 

Clear Polyethylene Terephthalate (PET) Substrates  Same material as window tinting films.

 

Transparent Conductor on PET  Indium Tin Oxide (ITO) - same as most touch screens.

 

Electronic Ink  Nanoparticles suspended in a fluid which absorb light.

 

Energy Source  Nanoparticles are controlled through DC low voltage applied to the ITO conductor material which is powered by a lithium-ion battery that is charged with a solar cell strip, no hard-wiring necessary.

 

1

Our plastic films are manufactured using industry standard roll-to-roll (R2R) processing equipment. The Company believes itsWe believe our R2R processing will have an inherently lower manufacturing cost compared to sheet-based processing methods used for other smart window technologies like electrochromic glass. There are three basic steps to making our film using R2R equipment.

 

1)Deposition: R2R TCO deposition on clear polyethylene terephthalate (PET) plastic film using vacuum sputtering of indium-tin oxide (ITO). The ITO on PET film can be provided by a number of suppliers. Millions of square feet of ITO on PET are currently provided for nearly all capacitance-based display touch screens.

 

2)Embossing: R2R embossing of UV-curable resin in a proprietary and patent protected 3-D pattern for ink pigment control and containment on one of the two plastic films. An example of the embossed pattern is shown in Figure 2. The R2R embossing process can be completed by various plastic film companies. Crown has the capability to accomplish the coating and embossing steps within its current facility in addition to working with manufacturing partners.

 

 

Figure 2. Microscopic Optical Image of Embossed Film

2

 

3)Lamination: The final R2R process laminates the two layers of PET together with the proprietary and patent protected pigment-containing fluid contained by the wall structure shown by the white areas in Figure 2. The wall area has adhesion to the upper layer of PET with ITO film thereby sealing the fluid between the two plastic layers. The fluid contains nanometer-sized pigment particles that are charged electrically and suspended in the fluid.

 

We believe that DynamicTintTM has the following distinct advantages over existing optical electronic film technologies:

 

 Neutral Color — Pigment is designed to be color neutral and will not affect the hue of what is viewed through the window in any clear, dark or tinted state.

 Speed  Transition time is typically a few seconds.

 Affordability — Roll-to-Roll film manufacturing using relatively inexpensive materials.

 Low Energy Requirements  Film is low voltage and can be powered with a small battery charged by a solar cell strip or wired to an existing electrical infrastructure including a LAN line.

 

2

 Retro-Fit  Film can be applied in a Smart Window Insert (“Inserts”), which can be placed within existing window frames, eliminating the needs for both window treatments or to replace single pane windows with dual pane windows.

 Sustainable  Reduces energy used to heat or cool a room via HVAC systems and can use renewable energy to transition the film.
Lease vs Purchase – Creative and flexible financing allows for customers to lease Inserts on a long-term basis and avoid large capital expenditures.

 

Smart Window Insert powered by DynamicTintTM

 

Crown’sOur first product will be the Smart Window Insert powered by DynamicTintTM which is specifically designed for retrofitting in the domestic and international commercial real estate install base. Our DynamicTintTM can be laminated to other surfaces like heat-treated glass or acrylic and the laminated sheet can be assembled in Smart Window Inserts that can be placed into the interior side of the window frame providing the dynamic tinting capability as well as additional insulation and sound proofing to the existing windows (Figure 3).

 

 

Figure 3. Smart Window Insert with EK Film

3

 

The Insert is a custom-sized panel comprised of a rigid substrate (thin glass or acrylic) with a silicon compliant edge seal that allows for the insert to securely fit into the interior side of the window frame.

 

Some of the Insert’s features include:

 

Solar-powered - eliminating the need to hardwire it into the building’s electrical system

 

Wirelessly enabled - facilitating communication with all the other installed inserts and integration with the building’s management software system

 

Sensor equipped - enabling the Insert to auto-sense the intensity of exterior light and interior ambient light

 

Software enabled - can be managed via programmed macros, dynamically managed by the building, or user-controlled within an office

 

Data collection  allowing optimization of the Inserts/curtain wall energy performanceperformance.

 

3

Lease vs Purchase - Creative and flexible financing allows for customers to lease Inserts on a long-term basis and avoid large capital expenditures

 

We believe Crown’sour Smart Window Inserts can be easily installed into commercial buildings, residential windows, skylights, and windows within garage doors. In commercial buildings, our Smart Window Inserts can be used to convert existing single pane windows into dual pane windows. Crown believes thatWe believe there is a significant opportunity to provide Smart Window Inserts to commercial building owners who are looking to eliminate window blinds, gain energy efficiency, and reduce carbon emissions.

 

Sustainability

 

Crown is aware that working towards building a sustainable future is a common goal shared by many. Companies such as Walmart (NYSE: WMT), Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) are now publishing their sustainability pledges, and we are seeing a trend of pledging to make their workplaces more environmentally friendly.

 

Crown’s patented technology provides a solution that helps address many sustainability issues such as:

 

Reducing waste - as opposed to replacing single pane window units with newly manufactured dual pane windows, Crown allows building owners to install our retrofit Smart WindowDynamicTint Insert into existing single pane window frames thereby creating a dual pane window;

 

Reducing energy - Crown’s Insert reduces HVAC energy consumption by reducing the need for constantly cooling and heating a room, reducing the customers carbon emissions. Initial field testing suggests HVAC energy savings of up to 26% could potentially result from the installation of Smart Window Inserts. According to FacilitiesNet (https://www.facilitiesnet.com/windowsexteriorwalls/article/Smart-Window-Benefit-Energy-Savings-Reduced-Glare--17280), the ability to control the amount of heat entering a building reduces the heat load of the building which in turn reduces your HVAC usage.;

 

Using renewable energy - Crown’s Smart Window Insert is low voltage and low wattage and can be powered by a solar strip that captures the sun’s energy and is integrated into the Insert itself thereby eliminating the need to hardwire the Insert to the home or building’s electrical system.

4

 

Another benefit of DynamicTint is being able to optimize daylight usage, thereby reducing the usage of lights. A study done by Project Drawdown (https://www.drawdown.org/solutions/dynamic-glass) projected that if 30-50% of commercial building spaces install dynamic glass, the potential climate-weighted energy efficiency from cooling is estimated at 9% and lighting at 9%—depending on local climate, building location and window orientation. This can result in 0.3-0.5 gigatons of emissions reductions from decreased energy use.

 

At Crown, we are committed to building a product that can be self-sufficient and does not require an additional power source or hard wiring into the electrical system of a residential home or commercial building. This ensures that as we reduce a building’s energy consumption, we are not adding to it and are working towards being carbon neutral.

 

Intellectual Property

 

On January 31, 2016, we entered into an IP agreement with HP to acquire a research license to determine the feasibility of incorporating HP’s electrokinetic display technology in our products. On February 4, 2021, Crown and HP entered into a fourth amendment to the agreement. Pursuant to such amendment, among other items, the parties agreed to amend the list of patent and patent applications, which includes two additional patents (the “HP Patents”) that are assignable to the Companyus by HP upon the exercise of the Company’sour option to acquire the HP Patents (the “Option”). In connection with the Company’sour exercise of the Option, the Companywe paid HP an aggregate amount equal to One Million Five Hundred Fifty Thousand Dollars ($1,550,000) on February 9, 2021. From the date of the exercise of the Option until January 1, 2030, the Companywe agreed to pay to HP a royalty fee based on the cumulative gross revenue received by the Companyus from the HP Patents as follows:

 

4

Time WindowLifetime Cumulative Gross RevenueRoyalty Rate
Prior to December 31, 2029$Less than $70,000,0000.00%0.00%
$70,000,000 - $500,000,0001.25%1.25%
$500,000,000 and beyond1.00%1.00%
January 1, 2030 onward0.00%0.00%

We entered into a Patent Assignment Agreement with International Business Machines Corporation (“IBM”) to acquire an ownership interest in assigned patents. As consideration for the patents, we paid $264,000 (including legal fees of approximately $38,000) on July 23, 2021.

 

In addition, the Company haswe have current patent applications in the United States and other countries that if granted, would add three additional patents to its portfolio. The Company’sOur United States patents expire at various dates from March 26, 2028 through March 10, 2036.

 

On July 23, 2021,A 2022 appraisal of Crown’s intellectual property by one of the Company entered intopreeminent third-party IP-valuation firms indicated a Patent Assignment Agreement with International Business Machines Corporationtotal valuation of approximately $94 million, consisting of $35 million relating to acquire an ownership interest in ten patents.patents (limited to the US office building market, supplying its Smart Window Insert) and $59 million for trade secrets.

 

The Company believesWe believe that its EK technology is adequately protected by its patent position and by its proprietary technological know-how. However, the validity of the Company’sour patents has never been contested in any litigation. The CompanyWe also possessespossess know-how and relies on trade secrets and nondisclosure agreements to protect its technology. The Company requiresWe require any employee, consultant, or licensee having access to its confidential information to execute an agreement whereby such person agrees to keep such information confidential.

 

5

Crown-Owned Patents

 

Application No. Country Filing Date Publication No. Status Title
16/259,078 USA 28-Jan-19 11174328 Issued REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
201980018649.7 China 28-Jan-19 CN111918894A Pending REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
19704995 Eur 28-Jan-19 3752867 Pending REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
2020-566194 Japan 28-Jan-19 JP 2021514422A Pending REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
10-2020-7024977 Korea 28-Jan-19 KR 20200122333A Pending REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
PCT/US2019/015464 WO 28-Jan-19 WO 2019/160675 Expired REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
62/631,623 USA 16-Feb-18   Expired REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
16/741,622 USA 13-Jan-20 2020-0225552 Pending APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
PCT/US2020/013396Country Filing DatePublication No.Title
USA28-Jan-1911174328REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
China28-Jan-19CN111918894AREFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
Europe28-Jan-193752867REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
Japan28-Jan-19JP 2021514422AREFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
Korea28-Jan-19KR 20200122333AREFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
WO28-Jan-19WO 2019/160675REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
USA16-Feb-18REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
USA 13-Jan-20 WO2020/150166Pending2020-0225552 APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
WO13-Jan-20WO2020/150166APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
USA16-Jan-19APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
EPO23-Jun-21APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
CN8-Jul-21APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
Korea5-Jul-21APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
JP15-Jul-21APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
USA7-Jul-1610377909INKS INCLUDING SEGMENT COPOLYMER GRAFTED PIGMENTS VIA AZIDE CHEMISTRY
USA22-Nov-108179590ELECTRO-OPTICAL DISPLAY
USA29-Jul-108054535ELECTROPHORETIC DISPLAY DEVICE
USA23-Aug-1710852615 *TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS WITH REDUCED DIFFRACTION
EPO2-Dec-153256903 *TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS
EPO2-Dec-153250962 *TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS WITH REDUCED DIFFRACTION
USA23-Aug-1710656493 *TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS
USA30-Nov-202021-0108463 *TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS WITH REDUCED DIFFRACTION
WO2-Dec-15WO2016/089957 *TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS

5

 

62/793,250 USA 16-Jan-19   Expired APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
20741846.8 EPO 23-Jun-21   Pending APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
202080008471.0 CN 8-Jul-21   Pending APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
10-2021-7020967 Korea 5-Jul-21   Pending APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
2021-540869 JP 15-Jul-21   Pending APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
15/204,505 USA 7-Jul-16 10377909 Issued INKS INCLUDING SEGMENT COPOLYMER GRAFTED PIGMENTS VIA AZIDE CHEMISTRY
12/951,348 USA 22-Nov-10 8179590 Issued ELECTRO-OPTICAL DISPLAY
12/865,255 USA 29-Jul-10 8054535 Issued ELECTROPHORETIC DISPLAY DEVICE
15/552,924* USA 23-Aug-17 10852615 Issued TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS WITH REDUCED DIFFRACTION
15823847.7* EPO 2-Dec-15 3256903 Issued TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS
15810715.1* EPO 2-Dec-15 3250962 Issued TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS WITH REDUCED DIFFRACTION
15/552,974* USA 23-Aug-17 10656493 Issued TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS
17/106,646* USA 30-Nov-20 2021-0108463 Pending TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS WITH REDUCED DIFFRACTION
PCT/US2015/063365* WO 2-Dec-15 WO2016/089957 Expired TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS
PCT/US2015/063390* WO 2-Dec-15 WO2016/089974 Expired TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS WITH REDUCED DIFFRACTION
14/574868 USA 18-Dec-14 9567995 Expired WINDOW OPACITY ATTENUATION USING MICROFLUIDIC CHANNELS -- note: Patent expired prior to transfer (client contemplating reinstatement of patent) --
14/828559 USA 18-Aug-15 9816501 Issued WINDOW OPACITY ATTENUATION USING MICROFLUIDIC CHANNELS
15/916917 USA 9-Mar-18 10926859 Issued SMART WINDOW ACTIVATION TO PREVENT LASER DISTURBANCE
15/975996 USA 10-May-18 10935818 Issued EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
15/335325 USA 26-Oct-16 10106018 Issued AUTOMATED WINDSHIELD GLARE ELIMINATION ASSISTANT
15/255388 USA 2-Sep-16 10144275 Issued ENVIRONMENTAL CONTROL IN VEHICLES
2017048.6 GB 2-May-19 2586760 Issued EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW

6

 

 

201980021319.3 CN 2-May-19 CN111936331A Pending EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
112019000749.1 DE 2-May-19 112019000749 Pending EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
2020-560315 JP 2-May-19   Pending EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
IB2019/053578** PCT 2-May-19 WO2019/215544 Expired EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
17/498,702 USA 11-Oct-21 2586760 Pending REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
2017048.6 GB 2-May-19 CN111936331A Issued EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW

WO2-Dec-15WO2016/089974 *TWO PARTICLE ELECTROPHORETIC LAMINATE FOR USE WITH SMART WINDOWS WITH REDUCED DIFFRACTION
USA18-Dec-149567995WINDOW OPACITY ATTENUATION USING MICROFLUIDIC CHANNELS
USA18-Aug-159816501WINDOW OPACITY ATTENUATION USING MICROFLUIDIC CHANNELS
USA9-Mar-1810926859SMART WINDOW ACTIVATION TO PREVENT LASER DISTURBANCE
USA10-May-1810935818EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
USA26-Oct-1610106018AUTOMATED WINDSHIELD GLARE ELIMINATION ASSISTANT
USA2-Sep-1610144275ENVIRONMENTAL CONTROL IN VEHICLES
GB2-May-192586760EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
CN2-May-19CN111936331AEVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
DE2-May-19112019000749EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
JP2-May-19EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
PCT2-May-19WO2019/215544 **EVENT-BASED, AUTOMATED CONTROL OF VISUAL LIGHT TRANSMISSION THROUGH VEHICLE WINDOW
USA11-Oct-21 11578150REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
USA24-Feb-22WINDOW SYSTEM AND METHOD UTILIZING A WINDOW PANE ASSEMBLY AND LOCKING SYSTEM FOR EASY INSERTION OF A WINDOW PANE ASSEMBLY WITH ELECTRONICALLY CONTROLLABLE SCALABLE APERTURES FOR ATTENUATING OR OTHERWISE MODULATING LIGHT TRANSMISSION THROUGH SAID ASSEMBLY
USA24-Feb-22WINDOW SYSTEM AND METHOD UTILIZING A WINDOW PANE ASSEMBLY AND LOCKING SYSTEM FOR EASY INSERTION OF A WINDOW PANE ASSEMBLY WITH ELECTRONICALLY CONTROLLABLE SCALABLE APERTURES FOR ATTENUATING OR OTHERWISE MODULATING LIGHT TRANSMISSION THROUGH SAID ASSEMBLY
USA29-Mar-22SELF-ALIGNING MASTER AREA MULTIPLICATION FOR CONTINUOUS EMBOSSING
USA11-Sep-22APPLICATIONS OF AN ELECTROKINETIC DEVICE FOR AN IMAGING SYSTEM
USA22-Jul-14INKS INCLUDING SEGMENT COPOLYMER GRAFTED PIGMENTS VIA AZIDE CHEMISTRY (recently assigned to Crown)
USA10-Feb-23REFRACTIVE INDEX MATCHED RESIN FOR ELECTROPHORETIC DISPLAYS AND OTHER APPLICATIONS
PCT23-Feb-23WINDOW SYSTEM AND METHOD UTILIZING A WINDOW PANE ASSEMBLY AND LOCKING SYSTEM FOR EASY INSERTION OF A WINDOW PANE ASSEMBLY WITH ELECTRONICALLY CONTROLLABLE SCALABLE APERTURES FOR ATTENUATING OR OTHERWISE MODULATING LIGHT TRANSMISSION THROUGH SAID ASSEMBLY

 

*Co-owned with University of Cincinnati

*Inactive

7

 

In-Licensed Patents

 

Patent No. Country Patent Date Publication No.Status Title
8,183,757 USA May 22, 201222-May-12 Issued DISPLAY ELEMENT
8,184,357 USA May 22, 201222-May-12 Issued DISPLAY ELEMENT
8,331,014 USA December 11, 201211-Dec-12 Issued PIGMENT-BASED INKS
8,384,659 USA February 26, 201326-Feb-13 Issued DISPLAY ELEMENT INCLUDING ELECTRODES AND A FLUID WITH COLORANT PARTICLES
8,432,598 USA April 30, 201330-Apr-13 Issued TRANSPARENT CONDUCTOR STRUCTURE
8,896,906 USA November 25, 201425-Nov-14 Issued INKS INCLUDING BLOCK COPOLYMER GRAFTED PIGMENTS VIA AZIDE CHEMISTRY
8,018,642 USA September 13, 201113-Sep-2011 Issued ELECTRO-OPTICAL DISPLAY

 

8

Business Model

 

We intend to develop and sellmanufacture our patented EK Technology under the name DynamicTint™. We intend to generate revenue by selling and in some cases leasing, DynamicTint™ film orour Smart Window Inserts powered by DynamicTint™ to our customers.

 

Crown’s first product will be the Smart Window Insert powered by DynamicTint™ for retrofitting in commercial buildings. Crown’s commercial building Smart Window Inserts will allow the building owner to quickly convert itsa single pane window unitsunit to a dual pane window unit. Crown’s insertsInserts will act as the “second pane” and will allow the building owner to enjoy all the benefits of a dual pane window without having to replace their existing single pane windows.

 

7

Crowns’Crown’s customers will be able to buy and own their Smart Window Inserts but also, at some stage, have the option to enter long-term leases of the Inserts with Crown.

Additional applications we are exploring with potential customers of Crown’s DynamicTintTM include:

 

Commercial and multi-family buildings: new construction.Smart Window Inserts for retrofitting of commercial buildings in markets outside the United States.

 

Smart Window Inserts for retrofitting of multi-family buildings.

Residential homes: residential windows, garage door windows, windows contained in and surrounding residential front doors as well as residential skylights.

 

Automotive: sunroofs and sun visors.sunroofs.

As Crown’s DynamicTint technology requires very little energy to effect that transition from clear to dark state, a rechargeable battery coupled with a built-in solar cell eliminates the need to hardwire the inserts to the building electrical system. Crown believes that the potential retrofit market for its Smart Window Inserts is significantly large. Each unit will have wireless communication capability for control of the film and communication with the building HVAC system.

Crown has also developed a working prototype of an insert for the residential skylight, which allows a homeowner to control the amount of light entering the room. Crown’s DynamicTint Insert does not require the homeowner to replace their skylight as it conveniently fits into the existing frame. Crown’s skylight insert will allow a homeowner (through a Bluetooth connection or RF controller) to adjust the level of desired tint easily and quickly, thereby controlling the amount of light and heat entering the room. The DynamicTint Skylight Insert will be powered by a rechargeable lithium battery and built-in solar cell thereby eliminating the need to wire the insert to the home’s electrical system.

 

Partners and Customers

On March 25, 2022, Crown executed a Master Supply Agreement (the “BDN MSA”) with Brandywine Operating Partnerships L.P. to install its Smart Window Inserts powered by DynamicTintTM in Brandywine office buildings. The BDN MSA provides the master terms and conditions under which purchase orders will be executed for Crown to supply units to retrofit windows at certain locations.

 

On December 27, 2021, Crown executed a Master Supply Agreement (the “HPP MSA”) with Hudson Pacific Properties L.P. for the installation of Crown’s energy saving Smart Window Inserts in several office properties across its West Coast portfolio. The HPP MSA provides the master terms and conditions under which purchase orders will be executed for Crown to supply units to retrofit windows at certain locations.

 

Prior to this, on September 27, 2021, Crown had entered into a Master Supply Agreement with MetroSpaces Inc., Crown’s first commercial customer, install its Smart Window Inserts in MetroSpaces’ 70,000 square-foot Houston, Texas office building.

 

In the future, Crown and both of theseits customers may enter into multiple specific transactions by executing purchase orders for additional buildings.

 

Additionally, discussions with multiple other building owners to buy Crown Smart Window Inserts are progressing as the regulatory and consumer pressure to reduce the level of energy consumption and carbon emissions continues to build.

 

Crown will pursue multiple paths

9

Purchase Orders

On August 12, 2022, the Company entered into two Purchase Orders (PO’s) with Hudson Pacific Properties, L.P. (“Hudson”) for the purchase of the Company’s Smart Window Inserts™ (“Inserts”). Hudson is a unique provider of end-to-end real estate solutions for tech and media tenants. The PO’s have a value of $85,450 and represent the first orders the Company has received prior to havingthe launch of its film manufactured which may include contracting manufacturing through third partiesInserts. Delivery and developing its own manufacturing capabilities, orinstallation are expected to begin in Q2 2023.

On August 12, 2022, as additional consideration for the PO’s, the Company issued a hybridwarrant to Hudson to purchase 300,000 shares of both. the Company’s common stock at $0.75 per share. The warrant has a five year life and expires on August 12, 2027.

Manufacturing

Crown is developing its manufacturing capabilities to meet anticipated demand for the Smart Window Insert through a combination of in-house tooling at both its Oregon facilities located in Corvallis, Oregon, for film production, and Salem, Oregon, for Smart Window Insert manufacturemanufacturing.

Crown plans to produce its EK film at its facilities in Corvallis using its existing roll to roll (the “R2R”) embossing equipment. We intend to perform all other film manufacturing processes at our Corvallis facility upon receipt of additional manufacturing equipment currently ordered and assembly,awaiting delivery.

Crown’s Smart Window Inserts will be produced at our Salem facility, where EK film will be laminated to glass, and then assembled into a frame. The inserts electronic components will also be integrated into the insert and the final assembled inserts will be packaged for shipment from Salem to our customers’ buildings.

The completion of Crown’s facilities in Corvallis and Salem marks our transition to being completely self-sufficient in manufacturing our products, eliminating any dependency on contract manufacturers or partners.

Commercial Office Building Market

Commercial buildings have gotten larger in the United States as welltheir floorspace continues to grow faster than the number of commercial buildings, according to preliminary results from the U.S. Energy Information Administration’s (EIA) 2018 Commercial Buildings Energy Consumption Survey (CBECS). CBECS estimates that 5.9 million U.S. commercial buildings contained a total of 97 billion square feet as via contract manufacturing partnerships which are currently being negotiated.of 2018. The number of commercial buildings increased by 6%, and commercial square footage increased by 11% since the CBECS was last conducted in 2012.

 

Smart Glass Industry Trends

 

We believe there are favorable converging global trends in the major near-term markets for “smart glass” products. Key factors driving the growth of the smart glass market are the growing demand for smart glass for energy savings for existing commercial and residential buildings. Added to this trend are government mandates and legislation for energy-efficient construction of both commercial and residential buildings. There is a growing opportunity for smart windows in the transportation industry including automobiles, commercial trucks, buses, and passenger rail cars.

 

In both public and private sectors across the world, there are substantial efforts targeted toward the promotion and use of energy efficient smart glass materials, including those used in automobiles, windows and other architectural glazings.

 

In September 2020, Markets and Markets issued Smart Glass Market with COVID-19 Impact by Technology (Suspended Particle Display, Electrochromic, Liquid Crystal), Application (Architecture, Transportation, Consumer Electronics), and Geography - Global Forecast to 2025. The smart glass market size is expected to grow from USD 3.8$3.8 billion in 2020 to USD 6.8$6.8 billion by 2025, at a CAGR of 12.1% during the forecast period. The growth of the smart glass industry is driven by factors, such as the growing adoption of smart glass in automotive application and, declining prices for electrochromic material. Other major driving factors for smart glass adoption include supportive government mandates and legislation on energy efficiency. Governing bodies of various countries are increasingly encouraging the use of these energy-efficient products.

 

10

Smart glass has inherent energy-saving and auto-dimming properties, which reducereduces its maintenance cost. As a result, the perceived benefits of these glass products are more than the incurred investments.

 

Crown believes that the smart glass industry is in the initial phase of growth and that DynamicTintTM film may have commercial applicability in many products where variable light-control is desired.

8

 

Our Technology

 

DynamicTintTM combines many of the favorable properties of the other smart window technologies. It has fast-switching time and unlike electrochromic (EC) technology, modulation in light level is not area dependent and the film is neutral in color in all settings. Unlike Suspended Particles Devices (SPD) and Polymer Dispersed Liquid Crystal (PDLC) technology, EK film does not need high voltage alternating current to power the film. Because of the low power requirements, EK films can be powered with batteries or combined with small area solar cells, allowing retrofit to existing windows. Furthermore, in the future, EK film could be made with other colorants and it is possible with modification to the design to use two colorants in the same film, which has been demonstrated in the recent past under a research project at the University of Cincinnati. Below is a table outlining some of the typical properties of each technology.

 

Other Smart Glass Technologies

 

Variable light transmission technologies can be classified into two basic types: “active” technologies that can be controlled electrically by the user either automatically or manually, and “passive” technologies that can only react to ambient environmental conditions such as changes in lighting or temperature. Most of the technologies are “active”. One type that is passive is thermochromic technology where a rise in temperature will darken the film applied to glass.

 

The Company believesWe believe that our DynamicTint has certain performance advantages over other “smart glass” technologies and that pricing and product performance are the two main factors critical to the adoption of smart glass products. Because the non-EK smart glass technologies listed below do not have published, consistent pricing or cost data that can be relied upon, the Companywe cannot accurately report itsour price position relative to these other technologies. In terms of product performance, the Company believeswe believe that DynamicTint offers numerous advantages over other smart glass technologies, as discussed below.

 

Technology Can Retrofit Power Usage Can Tint
to Black
 Solar or
Battery
Powered
 Tint
Transition
Speed
 Light Transmission
DynamicTintTM (Electrokinetic)  <0.01 W/M2   approx. 24 sec 3.0% - 70% or 0.4 %-50%
             
Electrochromic (EC)  0.3 – 2 W/M2
(30X (30X EK)
   5-40 min <1% - 58%
             
Suspended Polymers in Particles (SPD)1  1.1 W/M2 at 100V/50hz
(110X (110X EK)
   <3 sec 0.8% - 55%
             
Polymer Dispersed Liquid Crystal (PDLC)  5 – 20 W/M2
(500X (500X EK)
   1 – 3 sec ~80%

 

Ref. 1: SPD Film - LCF-1103DHA90 Showa Denko Material Co.

 

911

 

 

Electrochromic Glass

 

Electrochromic (EC) glass technology has been used as a light absorbing technology for rear view mirrors in automobiles for decades, and more recently for large-scale windows. However, the EC technology developed for windows is based on a different set of materials that are directly deposited on the heat-treated glass panels. All of the current EC companies are usinguse tungsten oxide as the main component involved in the color transition from clear to blue. Because of the nature of the chemical transition of the tungsten oxide, the EC film does not absorb as much of the blue light, and so remaining light will have a strong blue hue both in the room and when looking through the window. The speed of the switching time from dark to light or the reverse changevice versa is directly related to the size of the window area and the electrode design which brings electrical current to the EC material to start the chemical transition. EC technology is basically a battery-like material that requires “charging and discharging”. The time to charge/discharge the EC material in a large window can take up to 40 minutes to change form the dark state to the clear state at nominal temperatures. Also, during switching of the EC film, there can be non-uniform areas which can vary in level of tint from center to edge. The larger the area of the window, the more non-uniform during the change of state. Longer switching time can minimize the non-uniform areas. The EC materials are typically vacuum deposited directly on “defect-free” glass. The typical investment required for a large window electrochromic factory can run into the hundreds of millions of dollars, due to the large-scale vacuum equipment required, low particulate cleanroom required, and the relatively slow speed of deposition for all the various layers. Halio, formerly Kinestral Technologies, is using a chemical liquid deposition technique to replace some of the vacuum deposition steps to lower the capital investment needed for manufacturing.

 

Suspended Particle Glass (SPD)

 

SPD is a film that has suspended long and narrow particles in an encapsulated liquid polymer film with layers of ITO on either side to allow generation of an alternating current electrical field to twist the particles from a random state to a near vertical state perpendicular to the ITO plane. In the vertical state light passes through the film and in the random state the light is absorbed by the particles. The color of the film is blue since the particles used in the film do not absorb blue light as well as other colors of sunlight. No other types of particles have been created for this type of device. The film responds quickly to the electrical field, however, requires constant high AC voltage to hold the clear state. The film is manufactured on plastic and uses roll-to-roll (R2R) equipment processing. Also, because the particles are aligned when in the clear state, the film has a limited viewing angle much like older liquid-crystal displays. When viewed at a side angle, the film will appear darker. The current market for SPD has been mainly automobile sunroofs where the viewing angle of the passengers is relatively fixed at nearly perpendicular angle to the SPD film.

 

Polymer-Dispersed Liquid Crystal (PDLC) Film

 

PDLC requires an AC electric field like the SPD film described above to achieve a clear state. However, the liquid-crystal based film can only scatter light in the power-off state, therefore, most of the incoming light is transmitted through the film (~80%). Typically, the PDLC film is used for interior windows or doors to create privacy. PDLC has similar manufacturing methods using R2R equipment and plastic film with ITO conductor to the SPD film. The film is available from many Far East manufacturing companies with some able to make ~150 cm width film. The quality of the film can vary based on the manufacturing company. The film was invented at Kent State University in the 1980’s and the patents have expired.

 

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Competition

 

Several smart glass competitors have an operating history, including:

 

SAGE Electrochromic, Inc., a wholly owned subsidiary of Saint-Gobain, which develops and manufactures electrochromic glass;

 

View Glass [NASDAQ: VIEW] and Halio, formerly Kinestral Technologies, manufacture electrochromic glass at their purpose-built manufacturing facilities and both are headquartered in California; and

 

Research Frontiers, Inc. [NASDAQ: REFR] licenses an electronically controlled tinted film, utilizing SPD technology, to various companies.

 

Crown Electrokinetics expects that other competitors will emerge in the future.

 

Research and Development

 

Crown has been using a 6” width R2R equipment capable of handling the deposition, embossing and lamination steps of the manufacturing process for its research and development for the past three years. Crown will have its proto-manufacturing roll-to-roll equipment at 12” width available in 2022. Production prototypes for qualification and system testing will be sourced from the 12” equipment in 2022.development. Crown will utilize the 12” width film for the first-generation Smart Window Insert. Larger scale manufacturing is planned at a minimum of 36” width film to address markets including appropriately sized commercial and residential building window inserts, larger format skylights inserts, and many automobile sunroofs. Thereafter, Crown will develop capability to manufacture DynamicTint film of at least 72” width capability. This will allow Crown to address the vast majority of window sizes for most applications.

 

10

As a result of the Company’sour research and development efforts, the Company believeswe believe that itsour EK technology is now, or with additional development will become, usable in a number of commercial products. Such products may include one or more of the following fields: “smart” windows, doors, skylights and partitions; self-dimmable automotive sunroofs, windows, sun visors, and mirrors.

 

The Company hasWe have devoted most of itsour financial resources to research and development activities with the goal of producing commercially viable EK products and has developed working samples of itsour EK technology.

 

Crown’s main goals in its research and development include:

 

developing wider ranges of light transmission,

 

reducing the voltage required to operate DynamicTintTM,

 

obtaining data and developing improved materials regarding environmental stability and longevity, and

 

 quantifying the degree of energy savings expected by users of the Company’sour technology.
development of the Smart Window Insert product

13

Crown Fiber Optics

On January 3, 2023, we acquired substantially all of the assets (the “Asset Acquisition”) of Amerigen 7 LLC (“Amerigen”), which was engaged in the business of construction of 5G fiber optics infrastructure, for cash consideration of approximately $0.65 million. The Asset Acquisition included approximately 12 employees, customer contracts, and certain operating liabilities. On December 20, 2022, we incorporated our wholly-owned subsidiary Crown Fiber Optics Corp. (“Crown Fiber Optics” or “we”) in Delaware, to own and operate the business acquired from Amerigen.

Crown Fiber Optics supplies telecommunications providers with a comprehensive portfolio of specialty services, including program management; planning; engineering and design; aerial, underground, and wireless construction; maintenance; and fulfillment services. Crown Fiber Optics supplies the expertise, labor, equipment, and tools necessary to provide services to our customers.

Engineering Services. Crown Fiber Optics provides engineering services to telecommunications providers, including the planning and design of aerial, underground, and buried fiber optic, copper, and coaxial cable systems that extend from the telephone company hub location, or cable operator headend, to a consumer’s home or business. Crown Fiber Optics also plans and designs wireless networks in connection with the deployment of new and enhanced macro cell and new small cell sites. Additionally, we obtain rights of way and permits in support of our engineering activities and those of our customers and provide program and project management and inspection personnel in conjunction with engineering services or on a stand-alone basis.

Construction, Maintenance, and Installation Services. We provide a range of construction, maintenance, and installation services, including the placement and splicing of fiber, copper, and coaxial cables. We excavate trenches to place these cables; place related structures, such as poles, anchors, conduits, manholes, cabinets, and closures; place drop lines from main distribution lines to a consumer’s home or business; and maintain and remove these facilities. We provide these services for both telephone companies and cable multiple system operators in connection with the deployment, expansion, or maintenance of new and existing networks. We also provide tower construction, lines and antenna installation, foundation and equipment pad construction, small cell site placement for wireless carriers, and equipment installation and material fabrication and site testing services. Our underground facility locating services include locating telephone, cable television, power, water, sewer, and gas lines.

Capitalize on Long-Term Growth Drivers. We are well-positioned to benefit from the increased demand for network telecommunications bandwidth that is necessary to ensure reliable video, voice, and data services. Developments in consumer and business applications within the telecommunications industry, including advanced digital and video service offerings, continue to increase demand for greater wireline and wireless network capacity and reliability. Telecommunications network operators are increasingly deploying fiber optic cable technology deeper into their networks and closer to consumers and businesses in order to respond to consumer demand, competitive realities, and public policy support. Additionally, wireless carriers are upgrading their networks and contemplating next generation mobile solutions in response to the significant demand for wireless broadband, driven by the proliferation of smart phones, mobile data devices and other advances in technology. Increasing wireless data traffic and emerging wireless technologies are driving wireline deployments in many regions of the United States. Furthermore, significant consolidation and merger activity among telecommunications providers could also provide increased demand for our services as networks are integrated.

Selectively Increase Market Share. We believe our reputation for providing high quality services and the ability to provide those services nationally creates opportunities to expand market share. Our operating structure and multiple points of contact within customer organizations positions us favorably to win new opportunities and maintain strong relationships with our customers.

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Pursue Selective Acquisitions. We pursue acquisitions that are operationally and financially beneficial for the Company as they provide incremental revenue, geographic diversification, and complement existing operations. We generally target companies for acquisition that have defensible leadership positions in their market niches, the opportunity to generate profitability that meets or exceeds industry averages, proven operating histories, sound management and certain clearly identifiable cost synergies.

Customer Relationships

We are establishing relationships with many leading telecommunications providers, including telephone companies, cable multiple system operators, wireless carriers, telecommunication equipment and infrastructure providers. We believe that a substantial portion of our total contract revenues and operating income will continue to be generated from a concentrated group of customers and that the identity and proportion of our contract revenues arising from our work for our top five customers will fluctuate.

We perform a significant amount of our services under master service agreements and other contracts that contain customer-specified service requirements. These agreements include discrete pricing for individual tasks. We generally possess multiple agreements with each of our significant customers. We provide the remainder of our services pursuant to contracts for specific projects. These contracts may be long-term (with terms greater than one year) or short-term (with terms less than one year) and often include customary retainage provisions under which the customer may withhold 5% to 10% of the invoiced amounts pending project completion and closeout.

Competition

The specialty contracting services industry in which we operate is highly fragmented and includes a large number of participants. We compete with several large multinational corporations and numerous regional and privately owned companies. In addition, a portion of our customers directly perform many of the same services that we provide. Relatively few barriers to entry exist in the markets in which we operate. As a result, any organization that has adequate financial resources, access to technical expertise, and the necessary equipment may become a competitor and the degree to which an existing competitor participates in the markets that we operate may increase rapidly. The principal competitive factors for our services include geographic presence, quality of service, worker and general public safety, price, breadth of service offerings, and industry reputation.

 

Employees

 

The Company has thirty-oneWe have 40 full-time employees and four advisors. Twenty-twoemployees. 34 of the employees are technical and operational personnel, with an additional two active technical consultants, and the rest perform business development, legal, finance, marketing, investor relations, and administrative functions. Crowns employees have extensive industrial experience in leading technology, EV, glass, and ink-based manufacturing companies. TheWe believe that our success of the Company is dependent upon, among other things, the services of itsour senior management, the loss of which could have a material adverse effect upon the prospects of the Company.our prospects. None of our employees are represented by a labor union or covered by a collective bargaining agreement.

 

As Crown continues to grow, we will add additional manufacturing engineering, marketing, and administrative personnel.

 

Legal Proceedings

From time to time, we are also involved in various other claims and legal actions that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we do not believe that the ultimate resolution of these actions will have a material adverse effect on our financial position, results of operations, liquidity or capital resources.

Future litigation may be necessary to defend ourselves and our partners by determining the scope, enforceability, and validity of third-party proprietary rights or to establish the Company’s proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Our Corporate Information

 

Crown’sOur primary business location is the R&D and Manufacturing facility located at 1110 NE Circle Blvd,Blvd., Corvallis, OR 97330. CrownWe also hashave an office located at 11601 Wilshire BlvdBlvd., Suite 2240, Los Angeles, CA.CA 90025. Our telephone number is +1 (800) 674-3612 and our Internet website address is www.crownek.com. Crown waswww.crownek.com. We were incorporated in the State of Delaware on April 20, 2015.

 

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The Offering

Securities offered by the Selling Stockholders: 64,719,258 shares of common stock, which includes (i) 5,000,000 shares of common stock issuable upon the conversion of shares of Series E Preferred Stock (the “Series E Preferred Stock”), (ii) 45,000,000 shares of common stock issuable upon the conversion of shares of Series E Preferred Stock issuable upon exercise of certain outstanding warrants to purchase Series E Preferred Stock (the “Series E Warrants”), and (iii) 14,719,258 shares of common stock issuable upon the exercise of outstanding warrants to purchase shares of common stock (the “Common Warrants” and, together with the Series E Warrants, the “Warrants”).
Common stock outstanding:43,713,135 shares
Common stock to be outstanding after the offering assuming conversion of all of the Series E Preferred Stock and exercise of all Warrants:108,432,393 shares
Use of Proceeds:We will not receive any proceeds from the sale by the Selling Stockholders of the shares of common stock being offered by this prospectus. However, we may receive proceeds from the cash exercise of the Warrants, which, if exercised in cash at the current exercise price with respect to all Warrants, would result in gross proceeds to us of approximately $27,235,185. The proceeds from such Warrant exercises, if any, will be used for working capital and general corporate purposes.
Risk Factors:Investing in our securities is highly speculative and involves a high degree of risk. You should carefully consider the information set forth in the “Risk Factors” section on page 17 before deciding to invest in our securities.
Trading Symbol:Our common stock is currently quoted on The Nasdaq Capital Market under the trading symbol “CRKN”.

The shares of common stock outstanding and the shares of common stock to be outstanding after this offering is based on 43,713,135 shares outstanding as of April 24, 2023 and excludes:

9,513,624 shares of common stock issuable upon the exercise of options of which 8,579,370 have vested at a weighted average exercise price of $2.80 per share as of December 31, 2022;

27,661,181 shares of common stock issuable upon the exercise of warrants (excluding the Warrants) of which 27,661,181 are exercisable at a weighted average exercise price of $0.75 per share as of December 31, 2022;

1,843,018 shares of common stock issuable upon the vesting of restricted stock units of which 1,214,237 have vested;

3,582,208 shares of common stock issuable upon the conversion of 251 shares of Series A Preferred Stock and 1,443 shares of Series B Preferred Stock, and 500,576 shares of Series C Preferred Stock and 814,102 shares of Series D Preferred Stock;

10,879,702 shares of common stock issuable upon the conversion of outstanding convertible promissory notes, based on a conversion price of $0.495.

16

 

 

RISK FACTORS

An investment in our securities involves a high degreenumber of risk.risks. Before making any investment decision,deciding to invest in our securities, you should carefully consider the risk factors set forthrisks described below the informationand discussed under the caption “Risk Factors” in any applicable prospectus supplement, any related free writing prospectus that we may authorize to be provided to you and the information under the caption “Risk Factors”section captioned “Risk Factors” contained in our annual reportAnnual Report on Form 10-K and quarterly report on Form 10-Q that arefor the year ended December 31, 2022, which is incorporated by reference in this prospectus, as updatedthe information and documents incorporated by our subsequent filings under the Securities Exchange Actreference herein, and in any prospectus supplement or free writing prospectus that we have authorized for use in connection with an offering. If any of 1934, as amended, or the Exchange Act.

Thesethese risks could materially affectactually occurs, our business, financial condition, results of operationoperations or financial condition and affectcash flow could be harmed. This could cause the valuetrading price of our securities. Additional risks and uncertainties that are not yet identified may also materially harm our business, operating results and financial condition and could resultcommon stock to decline, resulting in a complete loss of your investment. You could lose all or part of your investment. For more information, see “Where You Can Find More Information.”The risks described below and in the document referenced above are not the only risks that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business.

 

Risks Related to Our SecuritiesFinancial Performance or General Economic Conditions

We derive a significant portion of our revenues from a small number of customers, and the Offeringloss of one or more of these customers could adversely affect our revenues, results of operations, and liquidity. 

Our customer base is highly concentrated. Our industry is highly competitive and the revenue we expect from an existing customer in any market could fail to be realized if competitors who offer comparable services to our customers do so on more favorable terms or have a better relationship with a customer. Additionally, the continued consolidation of the telecommunications industry could result in the loss of a customer if, as a result of a merger or acquisition involving one or more of our customers, the surviving entity chooses to use one of our competitors for the services we currently provide.

 

Future sales or other dilutionThe capital and operating expenditure budgets and seasonal spending patterns of our equity could depresscustomers affect demand for our services. 

Generally, our customers have no obligation to assign specific amounts of work to us. Customers decide to engage us to provide services based on, among other things, the market priceamount of capital they have available and their spending priorities. Our customers’ capital budgets may change for reasons over which we have no control. These changes may occur quickly and without advance notice. Any fluctuation in the capital or operating expenditure budgets and priorities of our common stock.customers could adversely affect our revenues, results of operations, and liquidity. 

 

SalesSeasonality and adverse weather conditions affect demand for our services.

Our contract revenues and results of operations exhibit seasonality and are impacted by adverse weather changes as we perform a significant portion of our common stock, preferred stock, warrants, rightswork outdoors. Consequently, adverse weather, which is more likely to occur with greater frequency, severity, and duration during the winter, as well as reduced daylight hours, impact our operations during the fiscal quarters ending in January and April. Additionally, extreme weather conditions such as major or convertible debt securities,extended winter storms, droughts and tornados, and natural disasters, such as floods, hurricanes, tropical storms, whether as a result of climate change or otherwise, could also impact the demand for our services, or impact our ability to perform our services.

We derive a significant portion of our revenues from multi-year master service agreements and other long-term contracts which our customers may cancel at any combinationtime or may reschedule or modify previously assigned work. 

The majority of our long-term contracts are cancellable by our customers with little or no advance notice and for any, or no, reason. Our customers may also have the right to cancel or remove assigned work without canceling the contract or to reschedule or modify previously assigned work. In addition, these contracts typically include a fixed term that is subject to renewal or rebid on a periodic basis. We may be unsuccessful in securing contracts when their fixed terms expire. Our projected revenues assume that definitive work orders have been, or will be, issued by our customer, and that the work will be completed. The potential loss of work under master service agreements and other long-term contracts, or the rescheduling or modification of previously assigned work by a customer, could adversely affect our results of operations, cash flows, and liquidity, as well as any projections we provide.

Our contracts contain provisions that may require us to pay damages or incur costs if we fail to meet our contractual obligations.

If we do not meet our contractual obligations our customers may look to us to pay damages or pursue other remedies, including, in some instances, the payment of liquidated damages. Additionally, if we fail to meet our contractual obligations, or if our customer anticipates that we cannot meet our contractual obligations, our customers may, in certain circumstances, seek reimbursement from us to cover the incremental cost of having a third party complete or remediate our work. Our results of operations could be adversely affected if we are required to pay damages or incur costs as a result of a failure to meet our contractual obligations. 


Generally, our customers are not contractually committed to procure specific volumes of services. Contract revenue estimates reflected in our backlog can be subject to change due to a number of factors, including contract cancellations or changes in the amount of work we expect to be performed. In addition, contract revenues reflected in our backlog may be realized in different periods from those previously anticipated due to these factors as well as project accelerations or delays due to various reasons, including, but not limited to, changes in customer spending priorities, project cancellations, regulatory interruptions, scheduling changes, commercial issues, such as permitting, engineering revisions, job site conditions and adverse weather. The amount or timing of our backlog can also be impacted by the merger or acquisition activity of our customers. Our estimates of our customers’ requirements during a future period may prove to be inaccurate. As a result, our backlog as of any particular date is an uncertain estimate of the foregoing, inamount of, and timing of, future revenues and earnings.

Our profitability is based on delivering services within the public market, orestimated costs established when we price our contracts. 

A significant portion of our services are provided under contracts that have discrete pricing for individual tasks. Due to the perception that such salesfixed price nature of the tasks, our profitability could occur,decline if our actual cost to complete each task exceeds our original estimates, as pricing under these contracts is determined based on estimated costs established when we enter into the contracts. A variety of factors could negatively impact the actual cost we incur in performing our work, such as changes made by our customers to the scope and extent of the services that we are to provide under a contract, delays resulting from weather and the COVID-19 pandemic, conditions at work sites differing materially from those anticipated at the time we bid on the contract, higher than expected costs of materials and labor, delays in obtaining necessary permits, under absorbed costs, and lower than anticipated productivity. An increase in costs due to any of these factors, or for other reasons, could adversely affect our results of operations.

Our business is labor-intensive, and we may be unable to attract, retain and ensure the productivity of qualified employees or to pass increased labor and training costs to our customers.

We are highly dependent upon our ability to employ, train, retain, and ensure the productivity of the skilled personnel needed to operate our business. Given the highly specialized work we perform, many of our employees receive training in, and possess, specialized technical skills that are necessary to operate our business and maintain productivity and profitability. We cannot be certain that we will be able to maintain and ensure the productivity of the skilled labor force necessary to operate our business. Our ability to do so depends on a number of factors, such as the general rate of employment, competition for employees possessing the skills we need, the general health and welfare of our employees and the level of compensation required to hire, train and retain qualified employees. In addition, the uncertainty of contract awards and project delays can also present difficulties in appropriately sizing our skilled labor force. Furthermore, due to the fixed price nature of the tasks in our contracts, we may be unable to pass increases in labor and training costs on to our customers. If we are unable to attract or retain qualified employees or incur additional labor and training costs, our results of operations could be adversely affected. 

We may be unable to secure subcontractors to fulfill our obligations, or our subcontractors may fail to satisfy their obligations to us, either of which may adversely affect our relationships with our customers or cause us to incur additional costs. 

We contract with subcontractors to manage fluctuations in work volumes and reduce the amounts that we would otherwise expend on fixed assets and working capital. If we are unable to secure qualified subcontractors who can provide adequate labor resources at a reasonable cost, we may be delayed or unable to complete our work under a contract on a timely basis. In addition, we may have disputes with these subcontractors arising from, among other things, the quality and timeliness of the work they have performed. We may incur additional costs to correct such shortfalls in the work performed by subcontractors. Any of these factors could negatively impact the quality of our service, our ability to perform under certain customer contracts, and our relationships with our customers, which could adversely affect our results of operations.

Changes in fuel prices may increase our costs, and we may not be able to pass along increased fuel costs to our customers.

Fuel prices fluctuate based on events outside of our control. Most of our services are provided under contracts that have discrete pricing for individual tasks and do not allow us to adjust our pricing for higher fuel costs during a contract term. In addition, we may be unable to secure prices that reflect rising costs when renewing or bidding contracts. To the extent we enter into hedge transactions in conjunction with our anticipated fuel purchases, declines in fuel prices below the levels established in the hedges we have in place may require us to make payments to our hedge counterparties. As a result, changes in fuel prices may adversely affect our results of operations.


Risks Related to the Operation of Our Business 

Our operations involve activities that are often inherently dangerous and are performed at times in complex or sensitive environments. If our activities result in, or if it is alleged that our activities have resulted in, damage or destruction to the real or personal property of others, or in injury or death to others, we could be exposed to significant financial losses and reputational harm, as well as civil and criminal liabilities.

Our operations involve dangerous activities such as underground drilling and the use of mechanized equipment. These activities and their effects could result in, or be alleged to have resulted in, damage to the real and personal property of others, and cause personal injury or death to third parties or our employees. In many instances, our activities are performed in close proximity to other utilities which, if damaged, may result in the occurrence of catastrophic events. Additionally, we may perform our activities in environmentally sensitive locations or in locations that may be susceptible to catastrophic events, including wildfires. If our activities cause or contribute to, or are alleged to have caused or contributed to, a catastrophic event, we could be exposed to severe financial losses and reputational harm. We procure insurance coverage to cover many of these risks; however, there can be no assurance that these coverages will continue to be available to us on commercially reasonable terms, or at all, or that they are adequate in scope or amount to address financial losses from these risks. As a result, we could incur significant costs to defend any such allegations, defend and indemnify our customers, repair and replace assets, or to compensate third parties; reputational harm could result in the loss of future revenue-generating opportunities; or we may be subject to civil and, in certain situations, criminal liabilities.

Risks Related to Laws and Regulations 

Our failure to comply with occupational health and workplace safety requirements could result in significant liabilities or enforcement actions and adversely impact our ability to perform services for our customers. 

Our operations are subject to strict laws and regulations governing workplace safety. Our workers frequently operate heavy machinery, work on and in the vicinity of electrical and gas lines, perform their work at heights, and engage in other potentially dangerous activities which could subject them and others to injury or death. If, in the course of our operations, it is determined we have violated safety regulations, our operations may be disrupted and we may be subject to penalties, fines or, in extreme cases, criminal sanctions. In addition, if our safety performance were to deteriorate, customers could decide to cancel our contracts or not award us future business. These factors could adversely affect our results of operations and financial position. 

Our failure to comply with environmental laws could result in significant liabilities.

A significant portion of the work we perform is associated with the underground networks of our customers and we often operate in close proximity to pipelines, sewer lines, or underground storage tanks that may contain hazardous substances. We could be subject to liabilities in the event that we fail to comply with environmental laws or regulations or if we cause or are responsible for the release of hazardous substances or other environmental damages. These liabilities could result in significant costs including remediation costs, fines, third-party claims for property damage, or personal injury, and, in extreme cases, criminal sanctions. These costs, as well as any direct impact to ongoing operations, could adversely affect our results of operations and cash flows. In addition, new laws and regulations, altered enforcement of existing laws and regulations, the discovery of previously unknown contamination or leaks, or the imposition of new remediation requirements could require us to incur significant costs or create new or increased liabilities that could adversely affect our results of operations and financial position. 


Risks Related to Our Ability to Grow Our Business

We may not have access in the future to sufficient capital on favorable terms or at all.We may require additional capital to pursue acquisitions, fund capital expenditures, for working capital needs, or to respond to changing business conditions.

Our existing debt agreements include restrictions on our ability to incur additional debt at certain levels. In addition, if we seek to incur more debt, we may be required to agree to additional covenants that further limit our operational and financial flexibility. If we pursue additional debt or equity financings, we cannot be certain that such funding will be available on terms acceptable to us, or at all. Our inability to access additional capital could adversely affect our liquidity and may limit our growth and ability to execute our business strategy.

The specialty contracting services industry in which we operate is highly competitive. 

We compete with other specialty contractors, including numerous local and regional providers, as well as several large corporations that may have financial, technical, and marketing resources exceeding ours. Relatively few barriers to entry exist in the markets in which we operate. Any organization may become a competitor if it has adequate financial resources and access to technical expertise, the ability to engage subcontractors, and the necessary equipment and materials. Additionally, our competitors may develop expertise, experience, and resources to provide services that are equal or superior to our services in price, quality, or availability, and we may be unable to maintain or enhance our competitive position. Furthermore, our customers generally require competitive bidding of our contracts upon the expiration of their terms. If competitors underbid us to procure business, we could be required to lower the prices we charge in order to retain contracts. Our revenues and results of operations could be adversely affected if our customers shift a significant portion of our work to a competitor, if we are unsuccessful in bidding or retaining projects, or if our ability to win projects requires us to provide our services at reduced margins.

We face competition from the in-house service organizations of our customers. 

We face competition from the in-house service organizations of our customers whose personnel perform the services that we provide. We can offer no assurance that our existing or prospective customers will continue to outsource specialty contracting services in the future. Our revenues and results of operations could be adversely affected if our existing or prospective customers reduce the specialty contracting services that are outsourced to us. 


PRIVATE PLACEMENTS

Series E Preferred Stock and Series E Warrant

On February 2, 2023, we entered into a Line of Credit Agreement (the “Line of Credit”) with a lender, pursuant to which the lender extended to us a secured line of credit in an amount not to exceed $100,000,000, to be used to fund expenses related to the fulfillment of contracts with customers of Crown Fiber Optics. The lender will consider requests for advances under the Line of Credit until February 2, 2024, unless the Line of Credit is extended for one or two additional years in accordance with its terms. Simultaneously with entering into the Line of Credit, we drew $2,000,000 under such Line of Credit.

In consideration for entering in the Line of Credit, we issued to the lender (i) 5,000 shares of our newly-created Series E Preferred Stock (the “Series E Preferred Stock”) and (ii) a warrant to purchase 45,000 shares of our Series E Preferred Stock (the “Series E Warrant”). An additional 5,000 shares of Series E Preferred Stock will be issued on the first and second anniversary of the date of the Line of Credit, provided that if we do not elect to extend the Line of Credit for an additional one or two years in accordance with the terms of such Line of Credit, such additional 5,000 shares of Series E Preferred Stock shall be immediately issued to the lender.

On February 1, 2023, we filed a Certificate of Designations, Preferences and Rights of the Series E Preferred Stock with the Secretary of State of the State of Delaware (the “Series E COD”). The Series E COD establishes the rights of the shares of Series E Preferred Stock.

Holders of Series E Preferred Stock are entitled to receive when, as and if dividends are declared and paid on our common stock, an equivalent dividend (with the same dividend declaration date and payment date), calculated on an as-converted basis without regard to the Beneficial Ownership Limitation (as defined in the Series E COD). Each share of Series E Preferred Stock is convertible into 1,000 shares of common stock at the option of holders of the Series E Preferred Stock. Except as otherwise required by the Delaware General Corporation Law or as provided below, the Series E Preferred Stock does not have voting rights. As long as any shares of Series E Preferred Stock are outstanding, in addition to any other requirement of the Delaware General Corporation Law, we will not, without the affirmative vote of the of a majority of the then-outstanding shares of the Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock or alter or amend the Series E COD, (b) amend our Certificate of Incorporation or other charter documents in any manner that materially adversely affects any rights of the holders of Series E Preferred Stock or (c) enter into any agreement with respect to any of the foregoing. The Series E Preferred Stock does not have a preference upon our liquidation, dissolution or winding-up.

Holders of Series E Preferred Stock are prohibited from converting shares of Series E Preferred Stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be initially set at 4.99% and thereafter adjusted by the holder to a number between 4.99% and 9.99%) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion. In addition, in the event a conversion of Series E Preferred Stock would result in the holder owning more than 19.99% of our outstanding shares of common stock, the number of shares of common stock that may be issued upon such conversion of Series E Preferred Stock, shall be limited to 19.99% of our outstanding shares of common stock as of the date hereof (the “Exchange Cap”), unless we obtain stockholder approval to issue a number of shares of common stock exceeding the Exchange Cap; provided, that the holder is restricted from effecting multiple conversions that result in the issuance of common stock in excess of the Exchange Cap, so long as at no time does the holder beneficially own shares of common stock in excess of the Exchange Cap.

The Series E Warrant is exercisable for five years to purchase an aggregate of 45,000 shares of Series E Preferred Stock at an exercise price of the greater of (i) $0.50 or (ii) the Nasdaq official closing price as of the Trading Day (as defined in the Series E Warrant) immediately prior to the time of issuance of the Series E Warrant, in either case multiplied by 1,000, and subject to adjustment under certain circumstances described in the Series E Warrant.


January Warrants

On January 3, 2023, the Company entered into a Securities Purchase Agreement (the “January Purchase Agreement”) with certain accredited investors as purchasers. Pursuant to the January Purchase Agreement, we sold, and the investors purchased, $1.2 million in principal amount of senior secured notes (the “January Notes”) and 2,500,000 warrants (“January Warrants”), each January Warrant entitling the holder to purchase one share of our common stock.

 

The January Notes were issued with an original issue discount of 20%, do not bear interest, and mature three months from the date of issuance (unless extended pursuant to the terms of the January Notes). To secure our obligations thereunder and under the January Purchase Agreement, we granted a security interest over all of our assets to the collateral agent for the benefit of the investors.

The January Warrants are exercisable for five years at an exercise price of $0.32, subject to adjustment under certain circumstances described in the January Warrants.

Waiver Warrants and Exchange Warrants

On October 19, 2022, we entered into a Securities Purchase Agreement with certain investors (the “October Purchase Agreement,” pursuant to which such investors purchased an aggregate of $5.4 million in principal amount of senior secured convertible notes (the “October Notes”), which are convertible into shares of common stock at a conversion price per share of $0.495, subject to adjustment under certain circumstances described in the October Notes. In addition, the issuanceinvestors received warrants, which are exercisable for a period of additionalfive years, to purchase an aggregate of 21,759,403 shares of common stock (the “October Warrants”).

On January 19, 2023, we entered into a warrant inducement agreement with certain holders of the October Notes, and issued to such holders warrants (the “Exchange Warrants”) to purchase 6,405,844 shares of our common stock.

On March 24, 2023, we and the investors entered into waiver and amendment agreements (the “Waiver and Amendment”) pursuant to which the investors waived certain provisions of the October Purchase Agreement to allow us to issue securities in an at-the-market offering at a price per share that is lower than the conversion price of the October Notes of $0.33 and to remove certain cash requirements set forth in the October Notes, and the investors were offered either (i) the option to both (a) change the purchase price under the October Purchase Agreement to $600 for each $1,000 of principal amount of October Notes and October Warrants to be purchased by such investor, representing an Original Issue Discount of 40% and (b) raise the conversion price of the October Notes to $0.536 or (ii) subject to certain stockholder approval requirements set forth in the Waiver and Amendment, the option to receive a number of shares of common stock reflecting an increase in the principal amount of the October Notes equivalent to a 5% increase in the original issue discount of the October Notes based on the closing price of the common stock on the day prior to the date the Waiver and Amendment is executed.

In connection with the Waiver and Amendment, we issued warrants (the “Waiver Warrants”) to the investors. The Waiver Warrants are exercisable for five (5) years to purchase an aggregate of 5,813,414 shares of our common stock securities convertible into or exercisable for our common stock, other equity-linked securities, including preferred stock, warrants or rights or any combination of these securities pursuant to this prospectus will dilute the ownership interest of our common shareholders and could depress the marketat an exercise price of our common stock and impair our ability$0.32 per share, subject to raise capital throughadjustment under certain circumstances described in the sale of additional equity securities.Waiver Warrants.

 

We may need to seek additional capital. If this additional financingThe Series E Preferred Stock, the Series E Warrant, the January Warrants, the Waiver Warrants and the Exchange Warrants sold were not registered under the Securities Act or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. The purchasers thereof are “accredited investors” as such term is obtained throughdefined in Regulation D promulgated under the issuance of equity securities, debt securities convertible into equity or options, warrants or rights to acquire equity securities, our existing shareholders could experience significant dilution upon the issuance, conversion or exercise of such securities.Securities Act.

 

Our management will have broad discretion over the use of the proceeds we receive from the sale our securities pursuant to this prospectus and might not apply the proceeds in ways that increase the value of your investment.

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Our management will have broad discretion to use the net proceeds from any offerings under this prospectus, and you will be relying on the judgment of our management regarding the application of these proceeds. Except as described in any prospectus supplement or in any related free writing prospectus that we may authorize to be provided to you, the net proceeds received by us from our sale of the securities described in this prospectus will be added to our general funds and will be used for general corporate purposes. Our management might not apply the net proceeds from offerings of our securities in ways that increase the value of your investment and might not be able to yield a significant return, if any, on any investment of such net proceeds. You may not have the opportunity to influence our decisions on how to use such proceeds.


USE OF PROCEEDS

 

We intend to use the net proceeds from the sale of theare not selling any securities as set forth in the applicableunder this prospectus supplement. In the case of a sale of shares of our common stock by the selling stockholder, weand will not receive any proceeds from the sale of ourthe common stock.stock offered by this prospectus by the Selling Stockholders. However, we may receive proceeds from the cash exercise of the Warrants, which, if exercised in cash at the current exercise price, with respect to all Warrants, would result in gross proceeds to us of approximately $27,235,185. The proceeds from such Warrant exercises, if any, will be used for working capital and general corporate purposes. We cannot predict when or whether the Warrants will be exercised, and it is possible that some or all of the Warrants may expire unexercised. For information about the Selling Stockholders, see “Selling Stockholders.”

 

SELLING STOCKHOLDER

This prospectus also relates toThe Selling Stockholders will pay any underwriting discounts and commissions and expenses incurred by the possible resaleSelling Stockholders for brokerage or legal services or any other expenses incurred by onethe Selling Stockholders in disposing of our stockholders of up to an aggregate of 2,000,000 shares of our common stock (plus an indeterminate number of shares of our common stock that may be issued upon stock splits, stock dividends or similar transactions in accordance with Rule 416 under the Securities Act) that were previously acquired by such stockholder in connection with our formation and through the selling stockholder’s service as our Chairman and Chief Executive Officer. Unless the context otherwise requires, as used in this prospectus, “selling stockholder” includes the selling stockholder named in the table below and donees, pledgees, transferees or other successors-in-interest selling shares received from the selling shareholders as a gift, pledge, partnership distribution or other transfer after the date of this prospectus, and any such persons will be named in the applicable prospectus supplement. We are registering the shares of common stock offered hereby. We will bear all other costs, fees and expenses incurred in order to permiteffecting the selling stockholder to offerregistration of the shares for resale from time to time.

The selling stockholder is Doug Croxall, our Chairman and Chief Executive Officer. The selling stockholder is not an affiliate of any broker-dealer.

The following table, based upon information currently known by us, sets forth as of January 12, 2021: (i) the number of shares of common stock held of record or beneficiallycovered by the selling shareholders as of such date (as determined below); and (ii) the number of shares that may be offered under this prospectus, by the selling shareholders. The beneficial ownership of the common stock set forth in the following table is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act,including all registration and the information is not necessarily indicative of beneficial ownership for any other purpose. This table is based upon information supplied to us by the selling shareholdersfiling fees and information filed with the SEC. The selling shareholders may sell or transfer all or a portion of their sharesfees and expenses of our common stock pursuant to any available exemption from the registration requirements of the Securities Act.counsel and accountants.

  

Shares of Common Stock Beneficially Owned

Prior to Offering(1)

  Number of
Shares
Registered
for Sale
  Shares of Common Stock Beneficially Owned After Offering(1)  Percent of Outstanding Shares to be Owned After the Offering 
Croxall Family Trust  6,257,024   2,000,000   4,257,024   25.1%

(1)We do not know when or in what amounts the selling stockholder will offer shares for sale, if at all. The selling stockholder may sell any or all of the shares included in and offered by this prospectus. Because the selling stockholder may offer all or some of the shares pursuant to this offering, we cannot estimate the number of shares that will be held by the selling stockholder after completion of this offering. However, for purposes of this table, we have assumed that after completion of this offering, none of the shares included in and covered by this prospectus will be held by the selling stockholder.

 

DESCRIPTION OF CAPITAL STOCK SECURITIES

 

The following is a summary of our capital stock and certain provisions of our certificate of incorporation and bylaws. This summary does not purport to be complete and is qualified in its entirety by the provisions of our certificate of incorporation, as amended, our bylaws and applicable provisions of the Delaware General Corporation Law or the DGCL.

See “Where You Can Find More Information” elsewhere in this prospectus for information on where you can obtain copies of our certificate of incorporation and our bylaws, which have been filed with and are publicly available from the SEC. Our authorized capital stock consists of 200,000,000800,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of preferred stock, par value $0.0001.

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DESCRIPTION OF COMMON STOCK

$0.0001 per share, including 300 shares of Series A Preferred Stock, 1,500 shares of Series B Preferred stock, 600,000 shares of Series C Preferred Stock, 7,000 shares of Series D Preferred Stock and 77,000 shares of Series E Preferred Stock. As of September 30, 2021, there were 14,856,480December 31, 2022, 20,243,509 shares of our common stock were issued and outstanding, held by approximately 1,833 stockholders251 shares of record.Series A Preferred Stock were issued and outstanding, 1,443 shares of Series B Preferred Stock were issued and outstanding, 500,756 shares of Series C Preferred Stock were issued and outstanding, 1,058 shares of Series D Preferred Stock were issued and outstanding, and 0 shares of Series E Preferred Stock were issued and outstanding.

 

Our common stock is currently traded on the NASDAQ Capital Market under the symbol “CRKN.”Common Stock

 

Voting, Dividend and Other Rights. Each outstanding share of common stock entitles the holder to one vote on all matters presented to the shareholders for a vote. Holders of shares of common stock have no cumulative voting, preemptive, subscription or conversion rights. All shares of common stock to be issued pursuant to this registration statement will be duly authorized, fully paid and non-assessable. Our boardBoard of directorsDirectors determines if and when distributions may be paid out of legally available funds to the holders. To date, we have not declared any dividends with respect to our common stock. Our declaration of any cash dividends in the future will depend on our Board of Directors’ determination as to whether, in light of our earnings, financial position, cash requirements and other relevant factors existing at the time, it appears advisable to do so. We do not anticipate paying cash dividends on the common stock in the foreseeable future.

 


Rights Upon Liquidation. Upon liquidation, subject to the right of any holders of the preferred stock to receive preferential distributions, each outstanding share of common stock may participate pro rata in the assets remaining after payment of, or adequate provision for, all our known debts and liabilities.

 

Majority Voting. The holders of a majority of the outstanding shares of common stock constitute a quorum at any meeting of the shareholders. A plurality of the votes cast at a meeting of shareholders elects our directors. The common stock does not have cumulative voting rights. Therefore, the holders of a majority of the outstanding shares of common stock can elect all of our directors. In general, a majority of the votes cast at a meeting of shareholders must authorize shareholder actions other than the election of directors. Most amendments to our certificate of incorporation require the vote of the holders of a majority of all outstanding voting shares.

 

VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598, is the registrar and transfer agent of our common stock.Preferred Stock

 

All issuedAuthority of Board of Directors to Create Series and outstanding sharesFix Rights. Under our certificate of common stock are fully paid and nonassessable. Sharesincorporation, as amended, our Board of our common stock that may be offered, from time to time, under this prospectus will be fully paid and nonassessable.

Delaware Anti-Takeover Provisions

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a publicly-held Delaware corporation from engaging in a “business combination,” except under certain circumstances, with an “interested stockholder” for a period of three years following the date such person became an “interested stockholder” unless:

before such person became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction that resulted in the interested stockholder becoming an interested stockholder;

upon the consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares held by directors who also are officers of the corporation and shares held by employee stock plans; or

at or following the time such person became an interested stockholder, the business combination is approved by the board of directors of the corporation authorized at a meeting of stockholders by the affirmative vote of the holders of two-thirds (2/3) of the outstanding voting stock of the corporation which is not owned by the interested stockholder.

The term “interested stockholder” generally is defined as a person who, together with affiliates and associates, owns, or, within the three years prior to the determination of interested stockholder status, owned, 15% or more of a corporation’s outstanding voting stock. The term “business combination” includes mergers, asset or stock sales and other similar transactions resulting in a financial benefit to an interested stockholder. Section 203 makes it more difficult for an “interested stockholder” to effect various business combinations with a corporation for a three-year period. The existence of this provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by stockholders. Presently, we have not opted out of this provision.

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DESCRIPTION OF PREFERRED STOCK

As of September 30, 2021, 502,450 shares of preferred stock had been issued or were outstanding.

Our board of directors has the authority toDirectors can issue up to 50,000,000 shares of preferred stock from time to time in one or more series. The Board of Directors is authorized to fix by resolution as to any series the designation and to determinenumber of shares of the series, the voting rights, the dividend rights, the redemption price, the amount payable upon liquidation or dissolution, the conversion rights, and any other designations, preferences or special rights or restrictions as may be permitted by law. Unless the nature of a particular transaction and the sharesrules of anylaw applicable thereto require such series without stockholder approval. Our boardapproval, our Board of directors may issue preferred stock in one or more series andDirectors has the authority to fix the designation and powers, rights and preferences and the qualifications, limitations or restrictions with respect to each class or seriesissue these shares of such class without further vote or action by the stockholders, unless action is required by applicable law or the rules of any stock exchange on which our securities may be listed. The ability of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. Further, our board of director may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. Additionally, the issuance of preferred stock may have the effect of decreasing the market price of our common stock.shareholder approval.

 

Our board of directors previously designated 300 shares of our authorized preferred stock as Series A Preferred Stock (the “Series A Preferred Stock”), 1,500 shares asand Series B Preferred Stock (the “Series B Preferred Stock”)

On January 22, 2021, we filed Amended and 600,000 sharesRestated Certificates of Series C Preferred Stock (the “Series C Preferred Stock”). As of September 30, 2021, 251 shares ofDesignation, Preferences and Rights to create our Series A Preferred Stock 1,443 shares ofand Series B Preferred Stock and 500,756 shares of Series C Preferred Stock remain issued and outstanding.

(collectively, “Preferred Stock”). The preferences, rights and terms of the Series A Preferred Stock and Series B Preferred Stock are identical except for the conversion price associated with each.

Voluntary Conversion. The Series A Preferred Stock and Series B Preferred Stock is convertible at any time at the option of the holder thereof, into that number of shares of common stock determined by dividing the stated valueStated Value of such Preferred Stock (which is $1,000) by the conversion price. The initialcurrent conversion price is $0.43068$1.3329 for the Series A Preferred Stock and $0.219183$0.7149 for the Series B Preferred Stock. The initial conversion price shall be adjusted in the event that we (i) pay a stock dividend or otherwise make a distribution or distributions payable in shares of our common stock, (ii) subdivide outstanding shares of our common stock into a larger number of shares, (iii) combine (including by way of a reverse stock split) outstanding shares of our common stock into a small number of shares, or (iv) issue, in the event of a reclassification of shares of our common stock, any shares of our capital stock.

Mandatory Conversion. If (i) the closing price of our common stock exceeds 300% of the then-current conversion price for five consecutive trading days, (ii) the daily average trading volume during thirty consecutive trading days was in excess of $100,000 per trading day, (iii) our common stock is DWAC eligible and not subject to a “DTC chill” and (iv) the shares of our common stock are freely tradeable pursuant to Rule 144 of the Securities Act, we have the right to require the holders of Preferred Stock to convert all remaining shares of Preferred Stock into shares of common stock.

Voting, Dividend and Other Rights. Holders of Preferred Stock shall have no voting rights. Each outstanding share of Preferred Stock entitles the holder, from and after the second anniversary of the issuance date thereof, to quarterly dividends at an annual rate of 8% of the Stated Value per share of Preferred Stock (subject to adjustment), payable in either cash or shares of common stock at our discretion.

Rights Upon Liquidation. In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Preferred Stock shall be entitled to receive out of our assets an amount equal to the Stated Value for each share of Preferred Stock before any distribution or payment shall be made to the holders of our common stock. Thereafter, the holders of Preferred Stock shall be entitled to receive the same amount that a holder of our common stock is entitled to receive if the shares of Preferred Stock were fully converted into shares of our common stock, which amounts are to be paid pari passu with holders of our common stock, Series C Preferred Stock and Series D Preferred Stock.


Series C Preferred Stock

On March 31, 2021, we filed Certificate of Designation, Preferences and Rights to create our Series C Preferred Stock (“Series C Preferred Stock”). The preferences, rights and terms of the Series C Preferred Stock are as follows.

Voluntary Conversion. The Series C Preferred Stock is convertible at any time at the option of the holder thereof, into that number of shares of common stock determined by dividing the Stated Value of such Series C Preferred Stock (which is $1.00) by the conversion price. The conversion price is $0.893 for the Series C Preferred Stock. The conversion price shall be adjusted in the event that we (i) pay a stock dividend or otherwise make a distribution or distributions payable in shares of our common stock, (ii) subdivide outstanding shares of our common stock into a larger number of shares, (iii) combine (including by way of a reverse stock split) outstanding shares of our common stock into a small number of shares, or (iv) issue, in the event of a reclassification of shares of our common stock, any shares of our capital stock.

Mandatory Conversion. If (i) the closing price of our common stock exceeds 300% of the then-current conversion price for five consecutive trading days, (ii) the daily average trading volume during thirty consecutive trading days was in excess of $100,000 per trading day, (iii) our common stock is DWAC eligible and not subject to a “DTC chill” and (iv) the shares of our common stock are freely tradeable pursuant to Rule 144 of the Securities Act, we have the right to require the holders of Series AC Preferred Stock and Series B Preferred to convert all remaining shares of such Series A Preferred Stock or Series BC Preferred Stock into shares of common stock.

Voting, Dividend and Other Rights. Holders of Series A Preferred Stock and Series BC Preferred Stock shall have no voting rights. Each outstanding share of Series A Preferred Stock and Series BC Preferred Stock entitles the holder, from and after the second anniversary of the issuance date thereof, to quarterly dividends at an annual rate of 8% of the stated valueStated Value per share of Series A Preferred Stock or Series BC Preferred Stock (subject to adjustment), payable in either cash or shares of common stock at our discretion.

Rights Upon Liquidation. In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Series A Preferred Stock and Series BC Preferred Stock shall be entitled to receive out of our assets an amount equal to the stated valueStated Value for each share of Series A Preferred Stock or Series BC Preferred Stock before any distribution or payment shall be made to the holders of our common stock. Thereafter, the holders of Series A Preferred Stock and Series BC Preferred Stock shall be entitled to receive the same amount that a holder of our common stock is entitled to receive if the shares of Series A Preferred Stock and Series BC Preferred Stock were fully converted into shares of our common stock, which amounts are to be paid pari passu with holders of our common stock.

Each share ofstock, Series CA Preferred Stock, will have a stated valued of $1.00 per share. From and after the second anniversary the holders of Series CB Preferred Stock shall be entitledand Series D Preferred Stock.


Series D Preferred Stock

On July 8, 2022, we filed the Certificate of Designations, Preferences and Rights (the “Series D Certificate of Designations”) to receive quarterly cumulative dividends or distributions at the annual rate of 8% of the stated value per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respectcreate our Series D Preferred Stock (“Series D Preferred Stock”). On February 1, 2023, we filed Amendment No. 1 to the Series C Preferred Stock). Such dividend shall be paid in cash or at the directionD Certificate of Designations. The preferences, rights and terms of the Company’s board of directors, in duly authorized, validly issued, fully paid and non-assessable shares of common stock, or a combination thereof. All declared but unpaid dividends on shares of Series CD Preferred Stock, shall increase the stated value of such shares, but when such dividendsas amended, are actually paid any such increase in the stated value shall be rescinded.as follows.

Voluntary Conversion. The holders shall be entitled to receive, and the Company shall pay, dividends on shares of Series CD Preferred Stock equal (on an as-if-converted-to-common stock basis) to and in the same form as dividends actually paid on shares of the common stock when, as and if such dividends are paid on shares of the Company’s common stock or other junior securities. The Series C Preferred Stock has no voting rights. Each share of Series C Preferred Stock shall beis convertible at any time and from time to time from and after the original issue date at the option of the holder thereof, into that number of shares of common stock determined by dividing the stated valueStated Value of such shares of Series CD Preferred Stock (which is $1,000) by the conversion price. The conversion price is $0.50 for the Series D Preferred Stock. The conversion price shall be adjusted in the event that we (i) pay a stock dividend or otherwise make a distribution or distributions payable in shares of our common stock, (ii) subdivide outstanding shares of our common stock into a larger number of shares, (iii) combine (including by way of a reverse stock split) outstanding shares of our common stock into a small number of shares, or (iv) issue, in the event of a reclassification of shares of our common stock, any shares of our capital stock.

Voting, Dividend and Other Rights. Holders of Series D Preferred Stock shall have no voting rights. Each outstanding share of Series D Preferred Stock entitles the holder to cumulative dividends at an annual rate of 12% of the Stated Value per share of Series D Preferred Stock (subject to adjustment), payable in shares of common stock at our discretion.

Rights Upon Liquidation. In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Series D Preferred Stock shall be entitled to receive out of our assets an amount equal to the Stated Value for each share of Series D Preferred Stock before any distribution or payment shall be made to the holders of our common stock. Thereafter, the holders of Series D Preferred Stock shall be entitled to receive the same amount that a holder of our common stock is entitled to receive if the shares of Series D Preferred Stock were fully converted into shares of our common stock, which amounts are to be paid pari passu with holders of our common stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock.

Series E Preferred Stock

On February 1, 2023, we filed the Certificate of Designations, Preferences and Rights to create our Series E Preferred Stock (“Series E Preferred Stock”). The preferences, rights and terms of the Series E Preferred Stock are as follows.

Voluntary Conversion. Each share of Series E Preferred Stock is convertible at any time at the option of the holder thereof into 1,000 shares of common stock, subject to adjustment for stock splits, stock combinations and the like.

Voting, Dividend and Other Rights. Holders of Series E Preferred Stock shall have no voting rights. Each outstanding share of Series E Preferred Stock entitles the holder to receive dividends on an as converted basis together with holders of common stock.

Rights Upon Liquidation. In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Series E Preferred Stock shall be entitled to receive out of our assets the same amount that a holder of common stock would receive if the Series E Preferred Stock were fully converted (disregarding any conversion limitations), which amounts are to be paid pari passu with holders of our common stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock shall equal $0.893, subject to adjustment.and Series D Preferred Stock.


Outstanding Warrants

At December 31, 2022, the following warrants were outstanding:

Underlying Shares of Common Stock  Expiration Date Initial Exercise Price (1) 
 55,835  November 15, 2023 $3.38 
 115,446  May 9, 2024 $1.26 
 166,667  July 3, 2024 $0.03 
 470,578  June 4, 2025 $1.12 
 208,000  July 8, 2025 $3.39 
 265,267  September 12, 2025 $3.75 
 532,304  October 2, 2025 $3.38 
 99,955  December 1, 2025 $4.65 
 940,730  January 26, 2026 $0.39 
 355,485  January 26, 2026 $3.39 
 235,183  January 27, 2026 $0.39 
 88,871  January 27, 2026 $3.39 
 248,170  January 27, 2026 $5.63 
 133,630  January 29, 2026 $5.63 
 100,724  September 16, 2026 $1.26 
 300,000  September 25, 2026 $5.00 
 150,000  September 28, 2026 $4.08 
 75,000  October 29, 2026 $4.07 
 50,000  November 6, 2026 $4.13 
 100,000  December 22, 2026 $3.04 
 200,000  March 18, 2027 $2.00 
 230,769  July 26, 2027 $1.30 
 76,923  July 26, 2027 $1.30 
 19,231  July 26, 2027 $1.30 
 230,769  July 26, 2027 $1.30 
 256,410  July 26, 2027 $1.30 
 62,500  July 22, 2027 $0.80 
 21,759,402  October 19, 2027 $0.32 
 300,000  August 12, 2027 $0.75 

(1)Pursuant to the terms of such warrants, the exercise price is subject to adjustment in the event of stock splits, combinations or the like of our common stock.

 


Anti-Takeover Effects of Certain Provisions of Our Articles of Incorporation, as Amended, and Our Bylaws

Our certificate of incorporation and our Bylaws contain certain provisions that could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions and certain provisions of Delaware law, which are summarized below, may discourage coercive takeover practices and inadequate takeover bids. These provisions also may encourage persons seeking to acquire control of us to first negotiate with our Board of Directors. We will file asbelieve that the benefits of increased protection of our potential ability to negotiate with an exhibitunfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

Undesignated Preferred Stock. As discussed above, our Board of Directors has the ability to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in our control or management.

Delaware Anti-Takeover Statute. We are subject to the registration statementprovisions of which this prospectus is a part, or will incorporate by reference from reports that we file with the SEC, the form of any certificate of designation that describes the termsSection 203 of the seriesDelaware General Corporation Law regulating corporate takeovers. In general, Section 203 prohibits a publicly held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of preferred stock we are offering beforethree years following the issuance of that series of preferred stock. This description will include, but not be limited to,date the following:person became an interested stockholder unless:

 

Prior to the title and stated value;date of the transaction, the Board of Directors of the corporation approved either the business combination or the transaction that resulted in the stockholder’s becoming an interested stockholder;

 

Upon completion of the numbertransaction that resulted in the stockholder’s becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares weowned by persons who are offering;

directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the liquidation preference per share;

right to determine confidentially whether shares held subject to the purchase price;

the dividend rate, period and payment date and method of calculation for dividends;

whether dividendsplan will be cumulativetendered in a tender or non-cumulative and, if cumulative, the date from which dividends will accumulate;

the provisions for a sinking fund, if any;

the provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and repurchase rights;

whether the preferred stock will be convertible into our common stock, and, if applicable, the conversion price, or how it will be calculated, and the conversion period;

whether the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price, or how it will be calculated, and the exchange period;

voting rights, if any, of the preferred stock;

preemptive rights, if any;

restrictions on transfer, sale or other assignment, if any;

a discussion of any material United States federal income tax considerations applicable to the preferred stock;

the relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs;

any limitations on the issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; and

any other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock.

DESCRIPTION OF DEBT SECURITIES

We may issue debt securities, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. When we offer to sell debt securities, we will describe the specific terms of any debt securities offered from time to time in a supplement to this prospectus, which may supplement or change the terms outlined below. Senior debt securities will be issued under one or more senior indentures, dated as of a date prior to such issuance, between us and a trustee to be named in a prospectus supplement, as amended or supplemented from time to time. Any subordinated debt securities will be issued under one or more subordinated indentures, dated as of a date prior to such issuance, between us and a trustee to be named in a prospectus supplement, as amended or supplemented from time to time. The indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended.

Before we issue any debt securities, the form of indentures will be filed with the SEC and incorporated by reference as an exhibit to the registration statement of which this prospectus is a part or as an exhibit to a current report on Form 8-K. For the complete terms of the debt securities, you should refer to the applicable prospectus supplement and the form of indentures for those particular debt securities. We encourage you to read the applicable prospectus supplement and the form of indenture for those particular debt securities before you purchase any of our debt securities.

We will describe in the applicable prospectus supplement the terms of the series of debt securities being offered, including:

the title;

whether or not such debt securities are guaranteed;

the principal amount being offered, and if a series, the total amount authorized and the total amount outstanding;

any limit on the amount that may be issued;

whether or not we will issue the series of debt securities in global form, the terms and who the depositary will be;

the maturity date;

the annual interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates;

whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;

the terms of the subordination of any series of subordinated debt;

the place where payments will be payable;

restrictions on transfer, sale or other assignment, if any;

our right, if any, to defer payment of interest and the maximum length of any such deferral period;

the date, if any, after which, and the price at which, we may, at our option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions and the terms of those redemption provisions;

the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund or analogous fund provisions or otherwise, to redeem, or at the holder’s option to purchase, the series of debt securities and the currency or currency unit in which the debt securities are payable;

any restrictions our ability to:

incur additional indebtedness;

issue additional securities;

create liens;

pay dividends and make distributions in respect of our capital stock;

redeem capital stock;

make investments or other restricted payments;

sell or otherwise dispose of assets;

enter into sale-leaseback transactions;

engage in transactions with stockholders and affiliates;offer; or

 

effect a consolidationAt or merger;

whether the indenture will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios;

a discussion of any material United States federal income tax considerations applicablesubsequent to the debt securities;

information describing any book-entry features;

provisions for a sinking fund purchasedate of the transaction, the business combination is approved by the Board of Directors and authorized at an annual or other analogous fund, if any;

special meeting of stockholders, and not by written consent, by the denominations in which we will issueaffirmative vote of at least 66-2/3% of the series of debt securities;

outstanding voting stock that is not owned by the currency of payment of debt securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars; and

any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, including any additional events of default or covenants provided with respect to the debt securities, and any terms that may be required by us or advisable under applicable laws or regulations.interested stockholder.

 

ConversionGenerally, a business combination includes a merger, asset or Exchange Rightsstock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our Board of Directors does not approve in advance. We also anticipate that Section 203 may discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders.

 

We will set forthThe provisions of Delaware law and the provisions of our certificate of incorporation and Bylaws, as amended, could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the prospectus supplementmarket price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the terms on which a serieseffect of debt securitiespreventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be convertible into or exchangeablein their best interests.

Transfer Agent and Registrar

The registrar and transfer agent for our common stock or our other securities. We will include provisions asis VStock Transfer, LLC, located at 18 Lafayette Place Woodmere, New York 11598.


SELLING STOCKHOLDERS

The common stock being offered by the Selling Stockholders are those issuable to whetherthe Selling Stockholders upon conversion or exchange is mandatory, at the option of the holderSeries E Preferred Stock, the conversion of the Series E Preferred Stock issuable upon exercise of the Series E Warrant or at our option.exercise of the Common Warrants. For additional information regarding the issuances of those shares of Series E Preferred Stock, Series E Warrant and grant of Common Warrants, see “Private Placements” above. We may include provisions pursuantare registering the shares of common stock in order to whichpermit the Selling Stockholders to offer the shares for resale from time to time. Except for the Line of Credit with Eleven Advisors, LLC and ownership of the Series E Preferred Stock, the Series E Warrant and the Common Warrants, the Selling Stockholders have not had any material relationship with us within the past three years.

The table below lists the Selling Stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the Selling Stockholders. The second column lists the number of shares of our common stock or our other securities that the holdersbeneficially owned by each Selling Stockholder, based on its ownership of the series of debt securities receive would be subject to adjustment.


DESCRIPTION OF WARRANTS

We may issue warrants for the purchaseshares of common stock, preferred stock and/or debt securities in one or more series. We may issue warrants independently or together withSeries E Preferred Stock, Series E Warrants and Common Warrants, assuming the conversion of such shares of Series E Preferred Stock, the exercise of the Warrants, and the conversion of the shares of Series E Preferred Stock issuable upon exercise of the Series E Warrant, held by the Selling Stockholders on that date.

The third column lists the shares of common stock preferred stock and/or debt securities, andbeing offered by this prospectus by the warrants may be attachedSelling Stockholders. The fourth column assumes the sale of all of the shares offered by the Selling Stockholders pursuant to or separate from these securities. While the terms summarized below will apply generally to any warrants that we may offer, we will describe the particular terms of any series of warrants in more detail in the applicable prospectus supplement. The terms of any warrants offered under a prospectus supplement may differ from the terms described below.this prospectus.

 


We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from reports that we file with the SEC, the form of warrant agreement, including a form of warrant certificate, that describesUnder the terms of the particular seriesSeries E Preferred Stock, the January Warrants, the Waiver Warrants and the Exchange Warrants, a Selling Stockholder may not convert such shares of warrants we are offering beforeSeries E Preferred Stock or exercise the issuanceJanuary Warrants, Waiver Warrants and Exchange Warrants to the extent such conversion or exercise would cause such Selling Stockholder, together with its affiliates and attribution parties, to beneficially own a number of shares of common stock which would exceed 4.99% of our then-outstanding common stock (the “Maximum Percentage”) following such conversion or exercise, excluding for purposes of such determination shares of common stock issuable upon conversion of such shares of Series E Preferred Stock or exercise of the related seriesJanuary Warrants, Waiver Warrants and Exchange Warrants that have not been exercised. The number of warrants.shares in the second column does not reflect this limitation. The following summariesSelling Stockholders may sell all, some or none of material provisionstheir shares in this offering. See “Plan of the warrants and the warrant agreements are subject to, and qualified in their entirety by reference to, all the provisions of the warrant agreement and warrant certificate applicable to the particular series of warrants that we may offer under this prospectus. We urge you to read the applicable prospectus supplements related to the particular series of warrants that we may offer under this prospectus, as well as any related free writing prospectuses, and the complete warrant agreements and warrant certificates that contain the terms of the warrants.Distribution.”

 

General

We will describe in the applicable prospectus supplement the terms of the series of warrants being offered, including:

Name of Selling Stockholder Common Stock Owned Prior to
Offering
  Maximum
Number of
shares of
Common Stock
  Shares Owned After
Offering
 
  Shares  

Percent
(1)

  to be Sold
(27)
  

Shares
(26)

  Percent (1) 
Cavalry Fund I, LP (2)  2,300,691 (14)  4.99%  1,520,516   2,300,691   4.99%
                     
Cedarview Opportunities Master Fund, LP (3)  2,300,691 (15)  4.99%  2,915,952   2,300,691   4.99 %
                     
Long Grove Partners LLC (4)  2,300,691 (16)  4.99%  2,155,097   2,300,691   4.99%
                     
Deschutes I, LP (5)  1,092,828(17)  2.37%  114,162   978,666   2.12%
                     
First Fire Global Opportunities Fund LLC (6)  2,300,691(18)  4.99%  3,304,857   2,300,691   4.99 %
                     
Seven Knots LLC (7)  2,300,691(19)  4.99%  1,400,813   2,021,426   4.38 %
                     
Keystone Capital Partners LLC (8)  2,300,691(20)  4.99%  1,400,813   2,125,470   4.61 %
                     
Mercer Street Global Opportunity Fund, LLC (9)  2,300,691 (21)  4.99%  900,898   2,300,691   4.99
                     
Pinz Capital Special Opportunities Fund LP (10)  2,300,691 (22)  4.99%  850,854   2,300,691   4.99
                     
Christopher J Ball Irrevocable Trust UTA 12/12/2020 (11)  901,905 (23)  1.96%  114,162   787,743   1.70%
                     
The Rohlinger Family Living Trust 2/14/08 (12)  206,943 (24)  0.45%  41,134   165,810   0.35%
                     
Eleven Advisors, LLC (13)  2,300,691 (25)  4.99%  50,000,000   2,300,691   4.99

 

(1)The percentages in the offering pricetable have been calculated on the basis of treating as outstanding for a particular person, all shares of our capital stock outstanding on April 24, 2023. On April 24, 2023, there were 43,713,135 shares of our common stock outstanding. To calculate a stockholder’s percentage of beneficial ownership, we include in the numerator and aggregate numberdenominator the common stock outstanding and all shares of our common stock issuable to that person in the event of the exercise of outstanding warrants offered;owned by that person which are exercisable within 60 days of April 24, 2023, subject to any contractual restrictions on exercise. Warrants held by other stockholders are disregarded in this calculation. Therefore, the denominator used in calculating beneficial ownership among our stockholders may differ. Unless we have indicated otherwise, each person named in the table has sole voting power and sole investment power for the shares listed opposite such person’s name.


(2)Cavalry Fund I Management LLC, the General Partner of Cavalry Fund I LP, has discretionary authority to vote and dispose of the shares held by Cavalry Fund I LP and may be deemed to be the beneficial owner of these shares. Thomas Walsh, in his capacity as CEO of Cavalry Fund I Management LLC, may also be deemed to have investment discretion and voting power over the shares held by Cavalry Fund I LP. Cavalry Fund I LP and Mr. Walsh each disclaim any beneficial ownership of these shares. The address of the selling stockholder is 82 E. Allendale Road, Suite 5B, Saddle River, NJ 07458.

 

(3)Cedarview Capital Management, LP, the currency for whichInvestment Manager of Cedarview Opportunities Master Fund, LP, has discretionary authority to vote and dispose of the warrantsshares held by Cedarview Capital Management, LP and may be purchased;deemed to be the beneficial owner of these shares. Burton Weinstein, in his capacity as Managing Partner of Cedarview Capital Management, LP, may also be deemed to have investment discretion and voting power over the shares held by Cedarview Opportunities Master Fund, LP. Cedarview Capital Management, LP and Mr. Weinstein each disclaim any beneficial ownership of these shares. The address of the selling stockholder is 1067 Broadway, Woodmere, NY 11598.

 

(4)if applicable,Scott W. Brickman, the designationManaging Member of this selling stockholder, holds voting and termsdispositive power over the shares of the securities with which the warrants are issued and the numbercommon stock held by this selling stockholder. Mr. Brickman disclaims any beneficial ownership of warrants issued with each such security or each principal amountthese shares. The address of such security;this selling stockholder is 165 Township Line Road, Ste 3000, Jenkintown, PA 19046.

 

(5)if applicable,Robert J. Levitt, the date onManager of this selling stockholder, holds voting and after whichdispositive power over the warrants and the related securities will be separately transferable;shares of common stock held by this selling stockholder. Mr. Levitt disclaims any beneficial ownership of these shares. The address of this selling stockholder is 5660 Kelvin Avenue, Woodland Hills, CA 91367.

 

(6)inEli Fireman, the caseManaging Member of warrants to purchase debt securities,this selling stockholder, holds voting and dispositive power over the principal amountshares of debt securities purchasable upon exercisecommon stock held by this selling stockholder. Mr. Fireman disclaims any beneficial ownership of one warrant and the price at, and currency in which,these shares. The address of this principal amount of debt securities may be purchased upon such exercise;selling stockholder is 1040 1st Ave, Suite 190, New York, NY 10022.

 

(7)inMarissa Welner, the caseManager of warrants to purchasethis selling stockholder, holds voting and dispositive power over the shares of common stock or preferredheld by this selling stockholder. Ms. Welner disclaims any beneficial ownership of these shares. The address of this selling stockholder is 7 Rose Avenue, Great Neck, NY 11021.

(8)Keystone Capital Partners LLC is managed by RANZ Group LLC. Frederic Zaino, the Managing Member of RANZ Group LLC, may be deemed to have investment discretion and voting power over the shares held by Keystone Capital Partners LLC. RANZ Group LLC and Mr. Zaino each disclaim any beneficial ownership of these shares. The address of the selling stockholder is 139 Fulton Street, Suite 412, New York, NY 10038.

(9)Mercer Street Global Opportunity Fund, LLC is managed by Merger Street Capital Partners LLC, which is managed by Jonathan Juchno. Merger Street Capital Partners LLC and Mr. Juchno, may be deemed to have investment discretion and voting power over the shares held by Mercer Street Global Opportunity Fund, LLC. Merger Street Capital Partners LLC and Mr. Juchno each disclaim any beneficial ownership of these shares. The address of the selling stockholder is 1111 Brickell Avenue, Suite 2920, Miami, FL 33131.

(10)Matthew Pinz, the General Partner of this selling stockholder, holds voting and dispositive power over the shares of common stock held by this selling stockholder. Mr. Pinz disclaims any beneficial ownership of these shares. The address of this selling stockholder is 25 West 45th Street, New York, NY 10036.

(11)Eileen Marion Ball, the Trustee of this selling stockholder, holds voting and dispositive power over the shares of common stock held by this selling stockholder. Ms. Ball disclaims any beneficial ownership of these shares. The address of this selling stockholder is 1321 Las Pulgas Road, Pacific Palisades, CA 90272.


(12)George J. Rohlinger, the Trustee of this selling stockholder, holds voting and dispositive power over the shares of common stock held by this selling stockholder. Mr. Rohlinger disclaims any beneficial ownership of these shares. The address of this selling stockholder is 4895 W. Mill River Court, Coeur D’Alene, ID 83814.

(13)Eleven Advisors LLC, the Manager of The Eleven Advisors LLC, holds voting and dispositive power over the shares of common stock held by the selling stockholder. Hartley Wasko, the CEO of the selling stockholder and the Managing Member/CEO of Eleven Advisors LLC, may also be deemed to have investment discretion and voting power over the shares held by The Eleven Advisors LLC. The address of the selling stockholder is 463 Adams Street, Denver, CO 80206.

(14)This column lists the number of shares of common stock or preferredbeneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 12,128,863 shares of our common stock, asconsisting of (i) 10,608,347 shares of common stock acquired by this selling stockholder in a transaction unrelated to the case may be, purchasable upontransactions contemplated by the exercise of one warrantSeries E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the price atExchange Warrants, none of which these shares may be purchased upon such exercise;are being registered for resale under this prospectus; (ii) up to 125,000 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; and (ii) up to 1,395,516 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus.

 

(15)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of any merger, consolidation, sale or other dispositionApril 24, 2023, the selling stockholder would beneficially own an aggregate number of 7,614,884 shares of our business oncommon stock, consisting of (i) 4,698,931 shares of common stock acquired by this selling stockholder in a transaction unrelated to the warrant agreementstransactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the warrants;Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 1,762,795 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; (ii) up to 653,157 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus, and (iii) up to 500,000 shares of common stock underlying the Exchange Warrants held by this selling stockholder, all of which are being registered under this prospectus.
(16)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 6,921,473 shares of our common stock, consisting of (i) 4,766,376 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 98,425 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; (ii) up to 502,429 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus, and (iii) up to 1,554,243 shares of common stock underlying the Exchange Warrants held by this selling stockholder, all of which are being registered under this prospectus.
(17)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 1,092,828 shares of our common stock, consisting of (i) 978,666 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 18,701 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; and (ii) up to 95,461 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus.
(18)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 8,976,910 shares of our common stock, consisting of (i) 5,672,052 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 250,000 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; (ii) up to 1,004,857 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus, and (iii) up to 2,050,000 shares of common stock underlying the Exchange Warrants held by this selling stockholder, all of which are being registered under this prospectus.


(19)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 3,422,239 shares of our common stock, consisting of (i) 2,021,426 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 63,976 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; (ii) up to 326,579 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus, and (iii) up to 1,010,258 shares of common stock underlying the Exchange Warrants held by this selling stockholder, all of which are being registered under this prospectus.

 

(20)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 3,526,283 shares of our common stock, consisting of (i) 2,125,470 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 63,976 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; (ii) up to 326,579 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus, and (iii) up to 1,010,258 shares of common stock underlying the Exchange Warrants held by this selling stockholder, all of which are being registered under this prospectus.
(21)This column lists the termsnumber of any rightsshares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to redeem or call the warrants;Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 8,402,586 shares of our common stock, consisting of (i) 7,501,689 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 900,898 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus.
(22)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 3,684,647 shares of our common stock, consisting of (i) 2,833,793 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 98,425 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; (ii) up to 502,429 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus, and (iii) up to 250,000 shares of common stock underlying the Exchange Warrants held by this selling stockholder, all of which are being registered under this prospectus.
(23)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 901,905 shares of our common stock, consisting of (i) 787,743 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 18,701 shares of common stock underlying the January Warrant held by this selling stockholder, all of which are being registered under this prospectus; and (ii) up to 95,461 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus.

(24)This column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 24, 2023, after giving effect to the Maximum Percentage (as defined in the paragraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 206,943 shares of our common stock, consisting of (i) 165,810 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 10,049 shares of common stock underlying the Waiver Warrants held by this selling stockholder, all of which are being registered under this prospectus, and (iii) up to 31,085 shares of common stock underlying the Exchange Warrants held by this selling stockholder, all of which are being registered under this prospectus.

 

(25)any provisions for changesThis column lists the number of shares of common stock beneficially owned by this selling stockholder, as of April 204, 2023, after giving effect to or adjustmentsthe Maximum Percentage (as defined in the exercise price orparagraph above the table above). Without regard to the Maximum Percentage, as of April 24, 2023, the selling stockholder would beneficially own an aggregate number of 54,000,000 shares of our common stock, consisting of (i) 4,000,000 shares of common stock acquired by this selling stockholder in a transaction unrelated to the transactions contemplated by the Series E Preferred Stock, the Series E Warrants, the January Warrants, the Waiver Warrants and the Exchange Warrants, none of which shares are being registered for resale under this prospectus; (ii) up to 5,000,000 shares of common stock underlying the Series E Preferred Stock held by this selling stockholder, all of which are being registered under this prospectus and (iii) up to 45,000,000 shares of common stock underlying the Series E Preferred Stock issuable upon conversion of the Series E Warrant held by this selling stockholder, all of which are being registered under this prospectus.
(26)This column represents the amount of shares that will be held by the Selling Stockholders after completion of this offering based on the assumptions that (a) all securities registered for sale by the registration statement of which this prospectus is part of will be sold, and (b) no other shares of common stock are acquired or sold by the Selling Stockholders prior to completion of this offering. However, the Selling Stockholders are not obligated to sell all or any portion of the shares of our common stock offered pursuant to this prospectus.
(27)For the purposes of the calculations of common stock to be sold pursuant to the prospectus we are assuming (i) the exercise of 100% of all of the Common Warrants held by the selling stockholders, (ii) the issuance of 100% of the shares of common stock underlying all of the Series E Preferred Stock without regard to any limitations set forth therein and (iii) the exercise of all of the Series E Warrants held by the selling stockholders and the subsequent issuance of 100% of the shares of common stock underlying the Series E Preferred Stock issuable upon exercise of the warrants;

the dates on which the right to exercise the warrants will commence and expire;

the manner in which the warrant agreements and warrants may be modified;

a discussion of any material or special United States federal income tax consequences of holding or exercising the warrants;

the terms of the securities issuable upon exercise of the warrants; and

any other specific terms, preferences, rights or limitations of or restrictions on the warrants.

Before exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise, including:

in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or

in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any.

Exercise of Warrants

Each warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement. Holders of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.

Holders of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with specified information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to the warrant agent.

If any warrants represented by the warrant certificate are not exercised, we will issue a new warrant certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise price for warrants.

20

DESCRIPTION OF RIGHTS

We may issue rights to purchase our common stock or preferred stock, in one or more series. Rights may be issued independently or together with any other offered security and may or may not be transferable by the person purchasing or receiving the subscription rights. In connection with any rights offering to our stockholders, we may enter into a standby underwriting arrangement with one or more underwriters pursuant to which such underwriters will purchase any offered securities remaining unsubscribed after such rights offering. In connection with a rights offering to our stockholders, we will distribute certificates evidencing the rights and a prospectus supplement to our stockholders on the record date that we set for receiving rights in such rights offering. The applicable prospectus supplement or free writing prospectus will describe the following terms of rights in respect of which this prospectus is being delivered:

the title of such rights;

the securities for which such rights are exercisable;

the exercise price for such rights;

the date of determining the security holders entitled to the rights distribution;

the number of such rights issued to each security holder;

the extent to which such rights are transferable;

if applicable, a discussion of the material United States federal income tax considerations applicable to the issuance or exercise of such rights;

the date on which the right to exercise such rights shall commence, and the date on which such rights shall expire (subjectSeries E Warrant without regard to any extension);

the conditions to completion of the rights offering;

any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the rights;

the extent to which such rights include an over-subscription privilege with respect to unsubscribed securities;

if applicable, the material terms of any standby underwriting or other purchase arrangement that we may enter into in connection with the rights offering; and

any other terms of such rights, including terms, procedures and limitations relating to the exchange and exercise of such rights.

Each right will entitle the holder thereof the right to purchase for cash such amount of shares of common stock or preferred stock, or any combination thereof, at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the prospectus supplement relating to the rights offered thereby. Rights may be exercised at any time up to the close of business on the expiration date for such rights set forth in the prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void. Rights may be exercised as set forth in the prospectus supplement relating to the rights offered thereby. Upon receipt of payment and the proper completion and due execution of the rights certificate at the office of the rights agent, if any, or any other office indicated in the prospectus supplement, we will forward, as soon as practicable, the shares of common stock and/or preferred stock purchasable upon such exercise. We may determine to offer any unsubscribed offered securities directly to persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby underwriting arrangements, as set forth in the applicable prospectus supplement.

21

DESCRIPTION OF UNITS

As specified in the applicable prospectus supplement, we may issue, in one more series, units consisting of common stock, preferred stock, debt securities and/or warrants or rights for the purchase of common stock, preferred stock and/or debt securities in any combination. The applicable prospectus supplement will describe:

the securities comprising the units, including whether and under what circumstances the securities comprising the units may be separately traded;

the terms and conditions applicable to the units, including a description of the terms of any applicable unit agreement governing the units; and

a description of the provisions for the payment, settlement, transfer or exchange of the units.set forth therein.

 

22


PLAN OF DISTRIBUTION

 

The securities coveredWe are registering the shares of common stock issuable upon conversion of the notes and exercise of the warrants to permit the resale of these shares of common stock by this prospectus may be offeredthe holders of the notes and soldwarrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock, although we will receive the exercise price of any Warrants not exercised by the selling stockholders on a cashless exercise basis. We will bear all fees and expenses incident to our obligation to register the shares of common stock.

The selling stockholders may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:

 

through agents;on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

 

to or through underwriters;

to or through broker-dealers (acting as agent or principal);

in “at the market offerings” within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an existing trading market, on an exchange, or otherwise;

directly to purchasers, through a specific bidding or auction process or otherwise; or

through a combination of any such methods of sale.

Agents, underwriters or broker-dealers may be paid compensation for offering and selling the securities. That compensation may be in the form of discounts, concessions or commissions to be received from us, from the selling stockholder, from the purchasers of the securities or from both us and/or the selling stockholder and the purchasers. Any underwriters, dealers, agents or other investors participating in the distribution of the securities may be deemed to be “underwriters,” as that term is defined in the Securities Act, and compensation and profits received by them on sale of the securities may be deemed to be underwriting commissions, as that term is defined in the rules promulgated under the Securities Act.

Each time securities are offered by this prospectus, the prospectus supplement, if required, will set forth:

the name of the selling stockholder and its relationship to us;

the name of any underwriter, dealer or agent involved in the offer and sale of the securities;

the terms of the offering;

any discounts concessions or commissions and other items constituting compensation received by the underwriters, broker-dealers or agents;

any over-allotment option under which any underwriters may purchase additional securities from us; and

any initial public offering price.

The securities may be sold at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices relating to the prevailing market prices or at negotiated prices. The distribution of securities may be effected from time to time in one or more transactions, by means of one or more of the following transactions, which may include cross or block trades:

transactions on the NASDAQ Capital Market or any other organized market where the securities may be traded;

in the over-the-counter market;

 

in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

an exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

 

 under delayed delivery contracts or other contractual commitments; orshort sales made after the date the Registration Statement is declared effective by the SEC;

 

 broker-dealers may agree with a combinationselling security holder to sell a specified number of such methods of sale.shares at a stipulated price per share;

 


a combination of any such methods of sale; and

any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if available, rather than under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other means not described in this prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, are usedbroker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in a sale, securities will be acquired by the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, for their own account andbroker-dealers or agents may be resoldin excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.

The selling stockholders may pledge or grant a security interest in some or all of the notes, warrants or shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in one or more transactions. Our securitiesinterest as selling stockholders under this prospectus. The selling stockholders also may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used in the sale of securities, an underwriting agreement will be executed with the underwriter or underwriters at the time an agreement for the sale is reached. This prospectustransfer and the prospectus supplement will be used by the underwriters to reselldonate the shares of our securities. common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

 

If 5% or more ofTo the net proceeds ofextent required by the Securities Act and the rules and regulations thereunder, the selling stockholders and any offering of our securities made under this prospectus will be received by a FINRA memberbroker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering or affiliates or associated persons of such FINRA member,the shares of common stock is made, a prospectus supplement, if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, will be conducted in accordance with FINRA Rule 5121.including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.

 

To comply withUnder the securities laws of certainsome states, if applicable, the securities offered by this prospectus willshares of common stock may be offered and sold in thosesuch states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

 

Agents, underwritersThere can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part.


The selling stockholders and dealersany other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $42,000 in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act in accordance with the registration rights agreements or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreements or we may be entitled to indemnification by us against specified liabilities, including liabilities incurredcontribution.

Once sold under the Securities Act, or to contribution by us to payments they may be required to make in respectregistration statement, of such liabilities. The prospectus supplement will describe the terms and conditions of such indemnification or contribution. Some of the agents, underwriters or dealers, or their respective affiliates, may be customers of, engage in transactions with or perform services for us in the ordinary course of business. We will describe in the prospectus supplement naming the underwriter the nature of any such relationship.

Certain persons participating in the offering may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. We make no representation or prediction as to the direction or magnitude of any effect that such transactions may have on the price of the securities. For a description of these activities, see the information under the heading “Underwriting” in the applicable prospectus supplement.

The selling stockholder may also sell securities under Rule 144 under the Securities Act, if available, or pursuant to other available exemptions from the registration requirements under the Securities Act, rather than under this prospectus. Registration of the common stock covered bywhich this prospectus does not mean that anyforms a part, the shares of common stock will be offered or sold.freely tradable in the hands of persons other than our affiliates.

 

24

LEGAL MATTERS

 

The validity of the securities offered in this prospectus will be passed upon for us by Pryor Cashman LLP. Additional legal matters may be passed upon for us, the selling stockholder or any underwriters, dealers or agents, by counsel that we will name in the applicable prospectus supplement. As appropriate, legal counsel representing the underwriters, dealers or agents will be named in the accompanying prospectus supplement and may opine to certain legal matters.

 

EXPERTS

 

Our balance sheets as of March 31, 2021 and 2020, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of those two years have been audited by Marcum LLP, an independent registered public accounting firm, has audited our financial statements at and for the year ended December 31, 2022 and the nine-month period ended December 31, 2021 as set forth in its report included in our annual report on Form 10-K and transition report on Form 10-KT for the twelve and nine months ended December 31, 2022 and 2021, respectively, which are incorporated by reference into this prospectus and elsewhere in the registration statement of which this prospectus is a part. Our financial statements are includedincorporated by reference in reliance upon such reporton Marcum LLP’s reports, given on thetheir authority of such firm as experts in accounting and auditing.

 

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the securities being offered by this prospectus. This prospectus does not contain all of the information in the registration statement of which this prospectus is a part and the exhibits to such registration statement. For further information with respect to us and the securities offered by this prospectus, we refer you to the registration statement of which this prospectus is a part and the exhibits to such registration statement. Statements contained in this prospectus as to the contents of any contract or any other document are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement of which this prospectus is a part. Each of these statements is qualified in all respects by this reference.

The registration statement of which this prospectus is a part is available at the SEC’s website at http://www.sec.gov. You may also request a copy of these filings, at no cost, by writing us at 1110 NE Circle Blvd., Corvallis, Oregon 97330, Attention: Chief Financial Officer or telephoning us at (800) 674-3612.

We are subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information are available at the SEC’s website referred to above. We also maintain a website at www.crownek.com. You may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

2537

 

 

INCORPORATION OF CERTAIN INFORMATIONDOCUMENTS BY REFERENCE

 

The SEC allows us to “incorporate by reference” the information we file with them into this prospectus. Thisprospectus, which means that we can disclose important information about us and our financial condition to you by referring you to another document filed separately with the SEC instead of having to repeatthose documents and that the information in this prospectus. Theprospectus is not complete and you should read the information incorporated by reference for more detail. We incorporate by reference in two ways. First, we list certain documents that we have already filed with the SEC. The information in these documents is considered to be part of this prospectus and laterprospectus. Second, the information in documents that we file with the SEC in the future will automatically update and supersede this information. This prospectus incorporatesthe current information in, and incorporated by reference in, this prospectus until we file a post-effective amendment that indicates the termination of the offering of the common stock made by this prospectus.

We incorporate by reference the documents listed below and any future filings madewe will make with the SEC under SectionsSection 13(a), 13(c), 14 or 15(d) of the Exchange Act between(other than information furnished in Current Reports on Form 8-K filed under Item 2.02 or 7.01 of such form unless such form expressly provides to the contrary), including those made after the date of the initial filing of the registration statement of which this prospectus is a part and prior to effectiveness of thesuch registration statement and the documents listed below that we have previously filed with the SEC:statement:

 

 our Annual Report on Form 10-K for the fiscal year ended MarchDecember 31, 20212022, filed with the SECSecurities and Exchange Commission on June 21, 2021;March 31, 2023; and

 

 our QuarterlyTransitional Report on Form 10-Q10-K for the quarternine months ended June 30,December 31, 2021, filed with the SECSecurities and Exchange Commission on August 16, 2021;

our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the SEC on November 12, 2021;March 31,2022; and

 

 our Current Reports on Form 8-K filed with the SECSecurities and Exchange Commission on April 16, 2021, August 11, 2021January 4, 2023, September 30, 2021February 3, 2023, November 16, 2021March 6, 2023, March 27, 2023 and December 23, 2021April 6, 2023 (other than information “furnished” under Items 2.02 or 7.01, or corresponding information furnished under Item 9.01 or included as an exhibit); and

 

 the description of our common stock contained in the registration statement on Form 8-A, dated January 22, 2021, File No. 001-39924, and any other amendment or report filed for the purpose of updating such description.

 

We also incorporateThe documents incorporated by reference all documents that we file with the SEC on or after the effective time ofinto this prospectus pursuantare also available on our corporate website at www.crownek.com. We will provide to Sections 13(a), 13(c), 14each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or 15(d)all of the Exchange Act and prior to the sale of all the securities registered hereunder or the termination of the registration statement. Nothing in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC.

Any statement contained in this prospectus or in a document incorporated or deemed to bethat has been incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes ofbut not delivered with this prospectus to the extent that a statement contained herein or in the applicable prospectus supplement or in any other subsequently filed document that also is or is deemed to be incorporated by reference modifies or supersedes the statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

You may request a copy of the filings incorporated herein by reference, including exhibits to such documents that are specifically incorporated by reference,this information at no cost, by writing or callingtelephoning us at the following address or telephone number:

 

11601 Wilshire Blvd., Suite 2240Crown Electrokinetic Corp.

Los Angeles, California 90025

Attn: Joel Krutz,Attention: Chief Financial Officer
1110 NE Circle Blvd.

Corvallis, Oregon 97330

(800) 674-3612

 

Statements contained in this prospectus as to the contents of any contract or other documents are not necessarily complete, and in each instance you are referred to the copy of the contract or other document filed as an exhibit to the registration statement or incorporated herein, each such statement being qualified in all respects by such reference and the exhibits and schedules thereto.

2638

 

 

WHERE YOU CAN FIND MORE INFORMATION64,719,258 Shares

 

This prospectus is part of a registration statement on Form S-3 that we filed with the SEC registering the securities that may be offered and sold hereunder. The registration statement, including exhibits thereto, contains additional relevant information about us and these securities, as permitted by the rules and regulations of the SEC, we have not included in this prospectus. A copy of the registration statement can be obtained at the address set forth below or at the SEC’s website as noted below. You should read the registration statement, including any applicable prospectus supplement, for further information about us and these securities.

 

We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at http:/www.sec.gov. You may also read and copy any document we file at the SEC’s public reference room, 100 F Street, N.E.

Crown Electrokinetics Corp.

Common Stock

PROSPECTUS

, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Because our common stock is listed on the NASDAQ Capital Market, you may also inspect reports, proxy statements and other information at the offices of the NASDAQ Capital Market.2023


PART II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 14. Other Expenses of Issuance and Distribution.Distribution

 

The following table sets forth allthe expenses payableexpected to be incurred by us in connection with the offeringissuance and distribution of our securities beingthe Securities registered hereby. All amounts shownhereby, all of which expenses, except for the Securities and Exchange Commission registration fee, are estimates except the SEC registration fee.estimates:

 

SEC registration fee $9,866.99 
Legal fees and expenses   * 
Accounting fees and expenses  * 
Printing and miscellaneous expenses   * 
     
Total expenses $9,866.99 

*Estimated expenses are presently not known and cannot be estimated.
Description Amount 
SEC Filing Fee $697.88 
Printing Expenses  500.00 
Accounting Fees and Expenses  15,000.00 
Legal Fees and Expenses  25,000.00 
Miscellaneous  802.12 
Total $42,000 

 

Item 15. Indemnification of Directors and Officers.Officers

 

Section 145 of theUnder Delaware General Corporation Law provides thatlaw, a Delaware corporation may indemnify directors and officersany person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than one by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as well as other employees and individualsa director, officer, employee or agent of another corporation, against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement and reasonable expenses, including attorneys’ fees actually and necessarily incurred as a result of such action or proceeding, if such director or officer acted, in good faith, for a purpose which such person reasonably believed to be, in, or not opposed to, the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that such conduct was unlawful.

In the case of a derivative action, a Delaware corporation may indemnify any such person against expense, including attorneys’ fees actually and necessarily incurred by such person in connection with the defense or settlement of such action or suit if such director or officer if such director or officer acted, in good faith, for a purpose which such person reasonably believed to be, in or not opposed to, the best interests of the corporation, except that no indemnification will be made in respect on any threatened, pendingclaim, issue or completed actions, suitsmatter as to which such person will have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or proceedingsany other court in which such action was brought determines such person is made a party by reason offairly and reasonably entitled to indemnity for such person being or having been a director, officer, employee or agent to the registrant. The Delaware General Corporation Law provides that Section 145 is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise. The registrant’s bylaws provide for indemnification by the registrant of its directors, officers and employees to the fullest extent permitted by the Delaware General Corporation Law.expense.

 

Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provideinclude in its certificate of incorporation that a director of the corporation shall not be personally liableprovision eliminating or limiting a director’s liability to thea corporation or its stockholders for monetary damages for breachbreaches of fiduciary duty as a director, exceptduty. Delaware Law provides, however, that liability for liability (i) for any breachbreaches of the director’s duty of loyalty, to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involveinvolving intentional misconduct, or a knowing violation of the law, (iii) forand the unlawful paymentspurchase or redemption of stock or payment of unlawful purchase or redemption of stock or payment of unlawful dividends or unlawful stock repurchases, redemptionsthe receipt of improper personal benefits cannot be eliminated or limited in this manner.

Our Certificate of Incorporation and Bylaws provide that we will indemnify our directors to the fullest extent permitted by Delaware law and may, if and to the extent authorized by the Board of Directors, indemnify our officers and any other person whom we have the power to indemnify against any liability, reasonable expense or other distributions, or (iv) for any transaction from which the director derived an improper personal benefit. The registrant’s certificate of incorporation provides for such limitation of liability.matter whatsoever.

 

The registrant maintains standard policiesAny amendment, modification or repeal of insurance under which coverage is provided (a) to itsthe foregoing provisions shall be prospective only, and shall not affect any rights or protections of any of our directors existing as of the time of such amendment, modification or repeal.

We may also, at the discretion of the Board of Directors, purchase and officers against loss arising from claims made by reason of breach of duty or other wrongful act, and (b)maintain insurance to the registrant with respect to payments which may be madefullest extent permitted by the registrant to such officers and directors pursuant to the above indemnification provision or otherwise as a matterDelaware law on behalf of law.

The registrant expects to enter into customary indemnification agreements with its executive officers and directors that provide them, in general, with customary indemnification in connection with their service to the registrant or on the registrant’s behalf.

II-1

At present, there is no pending litigation or proceeding involving any of our directors, officers, employees or employees in which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

Item 16. Exhibits and Financial Schedule

See the Exhibit Index attached to this registration statement and incorporated herein by reference.

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;

provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act, that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement.

(2) That, for the purposes of determiningagents against any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein,asserted against such person and the offering ofincurred by such securities at the time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act to any purchaser:

(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

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(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(5) That, for the purpose of determining liability of a Registrant under the Securities Act to any purchaser in the initial distribution of the securities:

The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

(iii) the portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

(iv) any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

(6) The undersigned registrant hereby undertakes that:

(i) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.capacity.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers andor persons controlling persons of the Registrant pursuant to the indemnification provisions described herein, or otherwise,foregoing, the Registrant has been advisedinformed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In

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Item 16. Exhibits and Financial Statement Schedules.

(a)

(3)Exhibits:

3.1Series E Certificate of Designation (incorporated herein by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on February 3, 2023).
4.1Form of October Warrant (incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on October 20, 2022).
4.2Form of October Note (incorporated herein by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on October 20, 2022).
4.3Form of Waiver Warrant (incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on March 3, 2023).
4.4Form of Series E Warrant (incorporated herein by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on February 3, 2023).
4.5Form of January Warrant (incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on January 4, 2023).
5.1Opinion of Pryor Cashman LLP, regarding legality of shares being registered.
23.1Consent of Marcum LLP
23.2Consent of Pryor Cashman LLP (included in their opinion filed as Exhibit 5.1).
24.1Powers of Attorney
107Filing Fee Table

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Item 17. Undertakings

(a)The undersigned registrant hereby undertakes:

(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) that, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

providedhowever, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) above do not apply if the event thatinformation required to be included in a claim for indemnification against such liabilities (other thanpost-effective amendment by those paragraphs is contained in reports filed with or furnished to the paymentSEC by the Registrant of expenses incurredregistrant pursuant to Section 13 or paid by a director, officer or controlling personSection 15(d) of the RegistrantSecurities Exchange Act of 1934 that are incorporated by reference in the successful defenseregistration statement, or is contained in a form of any action, suit or proceeding)prospectus filed pursuant to Rule 424(b) that is asserted by such director, officer or controlling person in connection witha part of the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.registration statement.

 

(2)That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.

(4)That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i)each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(ii)each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(5)That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(i)Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in Los Angeles, Californiathe Corvallis, Oregon, on the 12th day of January, 2022.April 25, 2023.

 

 CROWN ELECTROKINETICS CORP.Crown Electrokinetics Corp.
  
 By:/s/ Doug Croxall
  Doug Croxall
  Chief Executive Officer (Principal Executive Officer)

POWER OF ATTORNEY

 

Each person whose signature appears below constitutes and appoints Doug Croxall and Joel Krutz as his true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement on Form S-3 and any subsequent registration statement the Registrant may hereafter file with the Securities and Exchange Commission pursuant to Rule 462 under the Securities Act to register additional securities in connection with this registration statement, and to file this registration statement, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in order to effectuate the same as fully, to all intents and purposes, as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature Title Date
     
/s/ Doug Croxall Chairman and  
Doug Croxall Chief Executive Officer January 12, 2022April 25, 2023
  (Principal Executive Officer)  
     
/s/ Joel Krutz Chief Financial Officer  
Joel Krutz (Principal Financial Officer and January 12, 2022April 25, 2023
  Principal Accounting Officer)  
     
/s/ Eddie KovalikDaniel Marcus    
Eddie KovalikDaniel Marcus Director January 12, 2022
/s/ Gizman Abbas
Gizman AbbasDirectorJanuary 12, 2022
/s/ Gary C. Hanna
Gary C. HannaDirectorJanuary 12, 2022April 25, 2023
     
/s/ Dr. DJ Nag    
Dr. DJ Nag Director January 12, 2022

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EXHIBIT INDEX

Exhibit
Number
Description
1.1Form of Underwriting Agreement*
4.1Form of Indenture, including form of Note*
4.2Form of Warrant Agreement, including form of Warrant*
4.3Form of Unit Agreement*
4.4Form of Pledge Agreement*
4.5Form of Rights Certificate*
5.1Opinion of Pryor Cashman LLP**
23.1Consent of Independent Registered Public Accounting Firm, Marcum LLP**
23.2Consent of Pryor Cashman LLP (included in legal opinion filed as Exhibit 5.1)**
24.1Powers of Attorney (included on signature page)

*To be filed, if applicable, by amendment or as an exhibit to a report filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and incorporated herein by reference.

**Filed herewithApril 25, 2023

 

 

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