Actionable news
0
All posts from Actionable news
Actionable news in HH: HOOPER HOLMES Inc,

General form for registration of securities under the Securities Act of 1933

style="font-family:Times New Roman;font-size:10pt;">

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

Henry Dubois
Chief Executive Officer
Hooper Holmes, Inc.
560 N. Rogers Road
Olathe, KS 66062
(913) 764-1045

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

Peter Mirakian III, Esq.
Spencer Fane LLP
1000 Walnut Street, Suite 1400
Kansas City, MO 64106
(816) 474-8100

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) 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: o

If this Form 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: o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) 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: o

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

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 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary 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 preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

UP TO ____________ SHARES
OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF SUBSCRIPTION RIGHTS AT $0.___ PER SHARE

We are distributing, at no charge to our stockholders, non-transferable subscription rights to purchase up to an aggregate of ___________ shares of common stock at a price of $0.___ per whole share. We refer to this offering as the “rights offering.” We are offering to each of our stockholders _____ subscription right for each full common share owned by that stockholder as of the close of business on _____________, 2015, the record date. Each subscription right will entitle its holder to purchase ________________ of a share of our common stock, provided that no fractional shares will be issued in the rights offering and exercises therefor will be rounded down. Additionally, stockholders may over-subscribe for additional shares of common stock to the extent that the offered subscription rights are not exercised, although we cannot assure you that we will fill any over-subscriptions.

All of our directors, executive officers, and certain related parties to our directors and executive officers, who collectively beneficially owned approximately 6.5% of our outstanding shares of common stock as of the record date, have indicated that they intend to exercise all of the rights issued to them under the pro rata basic subscription right and, pursuant to the over-subscription privilege (if applicable), to subscribe for additional shares up to an additional 100% share of their pro rata subscription right. This indication is not binding, and our directors, executive officers, and their related parties are not legally obligated to exercise their rights.

Cannell Capital LLC (“Cannell”),which beneficially owned approximately 13.3% of our outstanding shares of common stock as of the record date, has indicated that it intends to exercise all of the rights issued to it under the pro rata basic subscription right. However, such indication is not binding, and Cannell is not legally obligated to do so. Assuming no other holders exercise their rights in this offering, and that Cannell exercises its basic privileges in full as indicated, after giving effect to this offering, Cannell would own approximately __% of our outstanding common stock. The purchase of any shares by Cannell upon its participation in the rights offering would be effected in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, would not be registered pursuant to the registration statement of which this prospectus forms a part.

Pursuant to the terms of a Credit Agreement dated April 17, 2015 (the “Credit Agreement”) with SWK Funding LLC (“SWK”), pursuant to which we borrowed $5.0 million in connection with our acquisition of Accountable Health Solutions (“AHS”), SWK acquired the right (the “SWK Participation Right”) to elect to require us to allow SWK to participate in a rights offering such as this rights offering. If SWK elects to exercise the SWK Participation Right, we will issue rights to SWK in the rights offering on the same basis as we issue rights to our shareholders as if SWK had previously exercised its warrant (the “SWK Warrant”) to purchase 8,152,174 shares of our common stock. If SWK exercises the SWK Participation Right, we will issue ___________ rights to SWK, and SWK will be entitled to participate in the pro rata basic subscription right and the oversubscription privilege on the same basis as all other holders of the rights issued in the rights offering.

To the extent you properly exercise your over-subscription privilege for an amount of shares of common stock that exceeds the number of the unsubscribed shares available to you, the subscription agent will return to you any excess subscription payments, without interest or penalty, as soon as practicable following the expiration of the

rights offering. We are not requiring a minimum individual or overall subscription to complete the rights offering. We have engaged Broadridge Financial Solutions, Inc. (“Broadridge”) to serve as the subscription agent and SM Berger & Company as information agent for the rights offering. The subscription agent will hold in escrow the funds we receive from subscribers until we complete or cancel the rights offering.

The subscription rights will expire if they are not exercised by 5:00 p.m., Central time, on ___________, 2016, but we may extend the rights offering period. We may cancel the rights offering for any reason at any time before it expires. If we cancel the rights offering, the subscription agent will return all subscription payments received, without interest or penalty, as soon as practicable.

You should carefully consider whether to exercise your subscription rights before the rights offering expires. All exercises of subscription rights are irrevocable. The purchase of shares of common stock involves a high degree of risk.

You should read “Risk Factors” beginning on page I-20. Our board of directors is making no recommendation regarding your exercise of the subscription rights.

The subscription rights are non-transferable. The shares of common stock to be issued upon exercise of the subscription rights will be listed for trading on the NYSE MKT under the symbol “HH.” The last reported sales price of our common stock on ____________, 2015 was $0.___ per share.

This is not an underwritten offering. The shares of common stock are being offered directly by us without the services of an underwriter or selling agent.

Neither the Securities and Exchange Commission nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus regardless of the time of delivery of this prospectus or the time of any exercise of the subscription rights. Our business, financial condition, results of operations and prospects may have changed since the date of this prospectus.

In this prospectus, we rely on and refer to information and statistics regarding our industry. We obtained this market data from independent publications or other publicly available information that we believe are reliable.

No action is being taken in any jurisdiction outside the United States to permit a public offering of our securities or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to those jurisdictions.

Unless the context indicates otherwise, all references in this prospectus to the “Company,” “Hooper Holmes,” “we,” “us” and “our” refer to Hooper Holmes, Inc.

Certain statements contained in, or incorporated by reference into, this prospectus are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “anticipate,” “believe,” “could,” “expect,” “estimate,” “intend,” “may,” “project,” “plan,” “should,” “will be,” “will likely

continue,” “will likely result” or words or phrases of similar meaning. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict all of these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy or actual results to differ materially from those contained in forward-looking statements.

Among the important factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements contained in this prospectus are risks related to customer concerns about our financial health, our liquidity, declines in our business, our competition, and our ability to successfully expand our Health and Wellness business and its related impact on revenue, along with other cost reduction initiatives, our ability to realize the expected benefits from the acquisition of Accountable Health Solutions and our strategic alliance with Clinical Reference Laboratory, our ability to successfully implement our business strategy and integrate Accountable Health Solutions’ business with ours, our ability to retain and grow our customer base, our ability to recognize operational efficiencies and reduce costs, uncertainty as to our working capital requirements over the next 12 to 24 months, our ability to maintain compliance with the financial covenants contained in our credit facilities, the rate of growth in the Health and Wellness market, and such other factors as discussed in Part I, Item 1A, Risk Factors, and Part II, Item 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2014, the Risk Factors section of this prospectus, and similar discussions in our other filings with the Securities and Exchange Commission (“SEC”).

Investors should consider these factors before deciding to make or maintain an investment in our securities. The forward-looking statements included in this prospectus are based on information available to us as of the date of this prospectus. We expressly disclaim any intent or obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances, or to reflect the occurrence of unanticipated events, after the date of this prospectus, except as required by law.

The following are examples of what we anticipate will be common questions about the rights offering. The answers are based on selected information included elsewhere in this prospectus. The following questions and answers do not contain all of the information that may be important to you and may not address all of the questions that you may have about the rights offering. This prospectus contains more detailed descriptions of the terms and conditions of the rights offering and provides additional information about us and our business, including potential risks related to the rights offering, shares of our common stock and our business.

We are distributing, at no charge, to holders of our shares of common stock, non-transferable subscription rights to purchase shares of our common stock. We are offering to each of our stockholders _____ subscription right for each full common share owned by that stockholder as of the close of business on ___________, 2015, the record date. Each subscription right will entitle its holder to purchase _____________ of a share of our common stock. Each subscription right entitles the holder to a basic subscription right and an over-subscription privilege, as described below. The shares of common stock to be issued upon exercise of the subscription rights will be listed for trading on the NYSE MKT under the symbol “HH.”

The basic subscription right gives our stockholders the opportunity to purchase _____________ shares of common stock at a subscription price of $0.___ per whole share. We have granted to you, as a stockholder of record on the record date, one subscription right for every share of our common stock you owned at that time. Fractional shares or cash in lieu of fractional shares will not be issued in the rights offering. Instead, fractional shares resulting from the exercise of the basic subscription right will be eliminated by rounding down to the nearest whole share.

We determined the ratio of rights required to purchase one share by dividing $4,000,000 by the subscription price of $0.___ to determine the number of shares to be issued in the rights offering and then dividing the number of shares to be issued in the rights offering by the number of shares of our common stock outstanding on the record date. Accordingly, each subscription right allows the holder thereof to subscribe for ____________ of a share of common stock at the cash price of $0.___ per whole share. As an example, if you owned 1,000 shares of our common stock on the record date, you would receive [1,000] subscription rights pursuant to your basic subscription right that would entitle you to purchase _______ shares of common stock (____________ rounded to the nearest whole share) at a subscription price of $0.___ per whole share.

You may exercise all or a portion of your basic subscription right or you may choose not to exercise any subscription rights at all. However, if you exercise less than your full basic subscription right, you will not be entitled to purchase shares of common stock under your over-subscription privilege.

If you hold a Hooper Holmes stock certificate, the number of shares of common stock you may purchase pursuant to your basic subscription right is indicated on the enclosed rights certificate. If you hold your shares in the name of a broker, dealer, custodian bank or other nominee who uses the services of the Depository Trust Company (“DTC”), you will not receive a rights certificate. Instead, DTC will issue one subscription right to your nominee record holder for every share of our common stock that you own at the record date. If you are not contacted by your nominee, you should contact your nominee as soon as possible.

If you purchase all of the shares of common stock available to you pursuant to your basic subscription right, you may also choose to purchase a portion of any shares of common stock that our other stockholders do not purchase through the exercise of their basic subscription rights. You should indicate on your rights certificate, or the form provided by your nominee if your shares are held in the name of a nominee, how many additional shares of common stock you would like to purchase pursuant to your over-subscription privilege.

If sufficient shares of common stock are available, we will seek to honor your over-subscription request in full. If over-subscription requests exceed the number of shares available, however, we will allocate the available shares pro rata among the stockholders exercising the over-subscription privilege in proportion to the number of shares of our common stock each of those stockholders owned on the record date, relative to the number of shares owned on the record date by all stockholders exercising the over-subscription privilege. If this pro rata allocation results in any stockholder receiving a greater number of shares of common stock than the stockholder subscribed for pursuant to the exercise of the over-subscription privilege, then such stockholder will be allocated only that number of shares for which the stockholder over-subscribed, and the remaining shares will be allocated among all other stockholders exercising the over-subscription privilege on the same pro rata basis described above. The proration process will be repeated until all shares of common stock have been allocated.

To properly exercise your over-subscription privilege, you must deliver the subscription payment related to your over-subscription privilege before the rights offering expires. Because we will not know the total number of unsubscribed shares of common stock before the rights offering expires, if you wish to maximize the number of shares you purchase pursuant to your over-subscription privilege, you will need to deliver payment in an amount equal to the aggregate subscription price for the maximum number of shares that may be available to you (i.e., the aggregate payment for both your basic subscription right and for any additional shares you desire to purchase pursuant to your over-subscription request). See “The Rights Offering — The Subscription Rights — Over-subscription Privilege.” Any excess subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable.

Fractional shares of common stock resulting from the exercise of the over-subscription privilege will be eliminated by rounding down to the nearest whole share. Broadridge, our subscription agent for the rights offering, will determine the over-subscription allocation based on the formula described above.

We are undertaking this rights offering to provide our Company with additional working capital as we continue our repositioning as a health and wellness company. Over the last two and a half years, we have repositioned ourselves away from the life insurance sector, restructured our operating model, reduced our cost structure, and focused our efforts on our growing health and wellness division. As part of this repositioning, we acquired Accountable Health Solutions in the second quarter of 2015 to add new product offerings and increase our screening volumes. This acquisition strategically positions the Company to provide a complete suite of health and wellness offerings: 1) biometric screenings, 2) coaching and education services, 3) wellness portal and engagement services, and 4) data analytics and reporting.

The additional working capital to be raised will enable us to expand our sales capabilities to drive growth, provide capital to repay a portion of existing debt, and provide the Company liquidity cushion. We believe by undertaking a rights offering, we provide our shareholders the opportunity to help us grow the Company and to share in this growth.

We maintain the 2013 Loan and Security Agreement with ACF FinCo I LP, the assignee of Keltic Financial Partners II, LP (“Ares” or “Senior Lender”). Borrowings under the 2013 Loan and Security Agreement are used for working capital purposes and capital expenditures. The amount available for borrowing is less than the $7 million under this facility at any given time due to the manner in which the maximum available amount is calculated. We have an available borrowing base subject to reserves established at the lender's discretion of 85% of Eligible Receivables (as defined in the 2013 Loan and Security Agreement) up to $7 million under this facility. The maximum borrowing capacity on the 2013 Loan and Security Agreement was reduced to $7 million in the Third Amendment to the Loan and Security Agreement (the “Third Amendment”) (subject to an increase to up to $12 million in certain circumstances, subject to the Senior Lender's consent). Eligible Receivables do not include certain receivables deemed ineligible by the lender. As of September 30, 2015, we had $3.4 million borrowings outstanding

under the 2013 Loan and Security Agreement. Available borrowing capacity as of November 10, 2015 was approximately $2.2 million

The 2013 Loan and Security Agreement and the Third Amendment contain various covenants, including financial covenants which require us to achieve a minimum EBITDA amount (earnings before interest expense, income taxes, depreciation and amortization). The Third Amendment contains minimum EBITDA covenants of negative $3.0 million for the twelve month period ended September 30, 2015; positive $0.8 million for the twelve month period ending December 31, 2015; positive $1.85 million for the twelve month period ending March 31, 2016; and positive $2.7 million for the twelve month period ending June 30, 2016. We continue to have limitations on the maximum amount of capital expenditures for each fiscal year. As of September 30, 2015, we had not met the minimum required EBITDA amount of negative $3.0 million and have obtained a Waiver and Fifth Amendment (the “Fifth Amendment”) related to the EBITDA measurement period ended September 30, 2015. The Fifth Amendment requires the Company to raise an aggregate amount in additional equity of not less than $4 million of which $1.5 million shall be received on or before February 28, 2016, and the balance shall be received on or before June 30, 2016. If we are able to sell all of the shares subject to purchase under the rights issued in this rights offering, we will fulfill these equity requirements. We are working with Ares to modify the financial covenants of the 2013 Loan and Security Agreement in an effort to be more in-line with our operations and strategy going forward, including consideration of the EBITDA measurement period for the twelve month period ending December 31, 2015. Given the nature of the trailing twelve month EBITDA calculation, the Company currently expects to report lower EBITDA than is required and does not expect to comply with the EBITDA covenant for the twelve months ending December 31, 2015. If the Company is not able to successfully execute favorable amendments to the existing credit facility, the Company could be considered in default, which would then enable applicable lenders to accelerate the repayment of all amounts outstanding and exercise remedies with respect to collateral, which would have a material adverse impact on the Company’s business.

In order to fund the acquisition of AHS, we entered into and consummated a Credit Agreement (the “Credit Agreement”) with SWK Funding LLC (“SWK”) on April 17, 2015. The Credit Agreement provides us with a $5.0 million Term Loan. The proceeds of the Term Loan were used to pay certain fees and expenses related to the negotiation and consummation of the Purchase Agreement for the acquisition and general corporate purposes. We paid SWK an origination fee of $0.1 million. The Term Loan is due and payable on April 17, 2018. We are also required to make quarterly revenue-based payments in an amount equal to eight and one-half percent (8.5%) of yearly aggregate revenue up to and including $20 million; seven percent (7%) of yearly aggregate revenue greater than $20 million up to and including $30 million; and five percent (5%) of yearly aggregate revenue greater than $30 million. The revenue-based payment will be applied to fees and interest, and any excess to the principal of the Term Loan. Revenue-based payments commence in February 2016, and the maximum aggregate revenue-based principal payment is capped at $600,000 per quarter.

The outstanding principal balance under the Credit Agreement will bear interest at an adjustable rate per annum equal to the LIBOR Rate (subject to a minimum amount of one percent (1.0%)) plus fourteen percent (14.0%) and will be due and payable quarterly, commencing on August 14, 2015. Upon the earlier of (a) the maturity date of April 17, 2018, or (b) full repayment of the Term Loan, whether by acceleration or otherwise, we are required to pay an exit fee equal to eight percent ( 8%) of the aggregate principal amount of all term loans advanced under the Credit Agreement.

The Credit Agreement also contains certain financial covenants, including certain minimum aggregate revenue and EBITDA requirements and requirements regarding consolidated unencumbered liquid assets. The Credit Agreement also contains minimum aggregate revenue covenants of $27.5 million for the twelve-month period ended September 30, 2015; $34 million for the twelve month period ending December 31, 2015; $38 million for the twelve month period ending March 31, 2016; and $40 million for the twelve month period ending June 30, 2016. The Credit Agreement also contains a minimum EBITDA covenant of one dollar for the twelve month period ending March 31, 2016, and $1.0 million for the twelve month period ending June 30, 2016, with subsequent quarterly measurement dates and EBITDA requirements through the life of the Credit Agreement.

The Credit Agreement contains a cross-default provision that can be triggered if we have more than $0.25 million in debt outstanding under the 2013 Loan and Security Agreement and we fail to make payments to the Senior Lender when due or if the Senior Lender is entitled to accelerate the maturity of debt in response to a default situation under the 2013 Loan and Security Agreement, which may include violation of any financial covenants. As of September 30, 2015, we were in compliance with all of our covenants under the Credit Agreement.

In addition, the Company issued SWK a warrant (the “Warrant”) to purchase 8,152,174 shares of the Company’s common stock. The Warrant is exercisable between October 17, 2015 and April 17, 2022 at an exercise price of $0.46 per share, exercisable on a cashless basis. Further, if the Company does not repay the 2013 Loan and Security Agreement in full on or prior to February 28, 2016, the Company must issue an additional warrant to SWK to purchase Company common stock valued at $1.25 million, with an exercise price of one cent over the closing price on February 28, 2016. This additional warrant will become exercisable six months after issuance and remain exercisable for seven years. Both warrants contain customary anti-dilution provisions.

One of the anti-dilution provisions applicable to the Warrant is a provision that gives SWK the right (the “SWK Participation Right”) to elect to require us to allow SWK to participate in a rights offering such as this rights offering. If SWK elects to exercise the SWK Participation Right, we will issue rights to SWK in the rights offering on the same basis as we issue rights to our shareholders as if SWK had previously exercised the Warrant and thereby became a holder of 8,152,174 shares of our common stock. If SWK exercises the SWK Participation Right, we will issue ___________ rights to SWK, and SWK will be entitled to participate in the pro rata basic subscription right and the oversubscription privilege on the same basis as all other holders of the rights issued in the rights offering.

In evaluating the subscription price, our board of directors considered, among other things, (i) the current and historical trading prices of our common stock, (ii) the price at which stockholders might be willing to participate in the rights offering, (iii) the likely cost of capital from other sources and our ability to access such capital, and (iv) comparable precedent transactions. After several meetings of the board of directors at which various strategic alternatives, including the rights offering, were discussed, the board approved the subscription price and the other terms of the rights offering.

The $0.___ subscription price is not intended to bear any relationship to the market value of our common stock, book value of our assets or our past operations, cash flows, losses, financial condition, net worth, or any other established criteria used to value securities. You should not consider the subscription price to be an indication of the fair value of the common stock to be offered in the rights offering.

Am I required to exercise all of the subscription rights I receive in the rights offering?

No. You may exercise any number of your subscription rights or you may choose not to exercise any subscription rights.

If you do not exercise any subscription rights, the number of shares of our common stock you own will not change. However, if you choose not to exercise your subscription rights, your ownership interest in Hooper Holmes will be diluted by other stockholder purchases. In addition, if you do not exercise your basic subscription right in full, you will not be entitled to participate in the over-subscription privilege. See “Risk Factors — If you do not exercise your subscription rights, your percentage ownership in Hooper Holmes will be diluted.”

How soon must I act to exercise my subscription rights?

If you received a rights certificate and elect to exercise any or all of your subscription rights, the subscription agent must receive your completed and signed rights certificate and payments before the rights offering expires on __________, 2016, at 5:00 p.m., Central time. If you hold your shares in the name of a broker, dealer, custodian bank or other nominee, your nominee may establish a deadline before the expiration of the rights offering by which you must provide it with your instructions to exercise your subscription rights. Although the Company may, in its

discretion, extend the expiration date of the rights offering, we currently do not intend to do so. We may cancel the rights offering at any time. If the rights offering is cancelled, all subscription payments received will be returned, without interest or penalty, as soon as practicable.

Although we will make reasonable attempts to provide this prospectus to our stockholders, the rights offering and all subscription rights will expire on the expiration date, whether or not we have been able to locate each person entitled to subscription rights.

No. The subscription rights are non-transferable and will not be listed for trading on the NYSE MKT or any other stock exchange or market.

Are we requiring a minimum overall subscription to complete the rights offering?

No. We are not requiring an overall minimum subscription to complete the rights offering. However, the Company reserves the right to cancel the rights offering for any reason, including if we do not receive aggregate subscriptions that we believe will satisfy our capital plans.

Are there any conditions to completing the rights offering?

No. There are no conditions to our closing the rights offering and issuing shares of our common stock subscribed for in the rights offering.

Can the rights offering be extended or canceled?

Yes. The Company may decide to cancel the rights offering at any time and for any reason before the rights offering expires. If the Company cancels the rights offering, any money received from subscribing stockholders will be returned, without interest or penalty, as soon as practicable. We also have the right to extend the rights offering period although we do not presently intend to do so.

Has our board of directors made a recommendation to our stockholders regarding the rights offering?

No. Our board of directors is making no recommendation regarding your exercise of the subscription rights. Stockholders who exercise subscription rights will incur investment risk on new money invested. We cannot predict the price at which our shares of common stock will trade after the offering. The market price for our common stock may decrease to an amount below the subscription price, and if you purchase shares of common stock at the subscription price, you may not be able to sell the shares in the future at the same price or a higher price. You should make your decision based on your assessment of our business and financial condition, our prospects for the future, the terms of the rights offering and the information contained in, or incorporated by reference into, this prospectus. See “Risk Factors” for a discussion of some of the risks involved in investing in our common stock.

Have any stockholders indicated that they will exercise their rights?

All of our directors, executive officers, and certain related parties to our directors and executive officers, who collectively beneficially owned approximately 6.5% of our outstanding shares of common stock as of the record date, have indicated that they intend to exercise all of the rights issued to them under the pro rata basic subscription right and, pursuant to the over-subscription privilege (if applicable), to subscribe for additional shares up to an additional 100% share of their pro rata subscription right. This indication is not binding, and our directors, executive officers, and their related parties are not legally obligated to exercise their rights.

Cannell, which beneficially owned approximately 13.3% of our outstanding shares of common stock as of the record date, has indicated that it intends to exercise all of the rights issued to it under the pro rata basic subscription right. However, such indication is not binding, and Cannell is not legally obligated to do so. The purchase of any shares by Cannell upon its participation in the rights offering would be effected in a transaction exempt from the registration requirements of the Securities Act and, accordingly, would not be registered pursuant to the registration statement of which this prospectus forms a part. Any pro rata shares purchased by Cannell upon the exercise of its basic subscription right will be included when determining the number of shares purchased in the basic subscription right of the rights offering. Assuming no other holders exercise their rights in this offering, and that Cannell exercises its basic privileges in full as indicated, after giving effect to this offering, Cannell would own approximately ___% of our outstanding common stock. Except as a result of any increase in its ownership of common stock, Cannell will not obtain any additional governance or control rights as a result of the rights offering.

How do I exercise my subscription rights if I own shares in certificate form?

If you hold a Hooper Holmes stock certificate and you wish to participate in the rights offering, you must take the following steps:

In certain cases, you may be required to provide additional documentation or signature guarantees.

Please follow the delivery instructions on the rights certificate. Do not deliver documents to the Company. You are solely responsible for completing delivery to the subscription agent of your subscription documents, rights certificate and payment. You should allow sufficient time for delivery of your subscription materials to the subscription agent so that the subscription agent receives them by 5:00 p.m., Central time, on ____________, 2016.

If you send a payment that is insufficient to purchase the number of shares of common stock you requested, or if the number of shares you requested is not specified in the forms, the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount of the payment received, subject to the availability of shares of common stock under the over-subscription privilege and the elimination of fractional shares.

What should I do if I want to participate in the rights offering but my shares are held in the name of a broker, dealer, custodian bank or other nominee?

If you hold your shares of common stock through a broker, dealer, custodian bank or other nominee, then your nominee is the record holder of the shares you own. The record holder must exercise the subscription rights on your behalf. If you wish to purchase our common stock through the rights offering, you should contact your broker, dealer, custodian bank or nominee as soon as possible. Please follow the instructions of your nominee. Your nominee may establish a deadline that may be before the expiration date of the rights offering.

You must timely pay the full subscription price for the full number of shares of common stock you wish to acquire in the rights offering by delivering to the subscription agent an uncertified personal check or wire transfer of immediately available funds that clears before the expiration of the rights offering period. If you wish to use any other form of payment, then you must obtain the prior approval of the subscription agent and make arrangements in advance with the subscription agent for the delivery of such payment.

If you purchase shares of common stock in the rights offering, you will receive your new shares as soon as practicable after the closing of the rights offering.

After I send in my payment and rights certificate, may I cancel my exercise of subscription rights?

No. All exercises of subscription rights are irrevocable unless the rights offering is cancelled, even if you later learn information that you consider to be unfavorable to the exercise of your subscription rights. You should not exercise your subscription rights unless you are certain that you wish to purchase shares in the rights offering.

What effects will the rights offering have on our outstanding common stock?

As of the record date, 77,958,270 shares of our common stock were issued and outstanding. Pursuant to the Warrant, SWK has the right to acquire 8,152,174 shares of our common stock for an exercise price of $0.46 per share. Unless our stock price increases to at least $0.46 per share, we do not expect SWK to exercise the Warrant while the rights remain exercisable under this rights offering. If SWK exercises the SWK Participation Right, it would receive ___________ rights to participate in the rights offering. If SWK exercises the SWK Participation Right and all of the subscription rights are exercised in full by our stockholders, we expect to issue an additional ____________ shares of our common stock after the closing of the rights offering, for a total of _____________ shares of common stock issued and outstanding. This assumes that, during the rights offering, we issue no other shares of our common stock, that SWK does not exercise the Warrant, and that no options for our common stock are exercised.

The issuance of shares in the rights offering will dilute, and thereby reduce, your proportionate ownership in our shares of common stock if you do not exercise your basic subscription right. In addition, if the subscription price of the shares is less than the market price of our common stock it will likely reduce the market price per share of shares you already hold.

How much capital will Hooper Holmes receive from the rights offering?

If all of the subscription rights (including all over-subscription privileges and the rights issued under the SWK Participation Right) are exercised in full by our stockholders, we estimate that the net proceeds to us from the rights offering, after deducting estimated offering expenses, will be approximately $3.75 million. It is possible that the Company may elect to close the offering with fewer than all the pro rata participation and over-subscription rights exercised; it is also possible that the Company could cancel the rights offering altogether.

Are there risks in exercising my subscription rights?

Yes. Exercising your subscription rights involves the purchase of shares of our common stock. You should consider this investment as carefully as you would consider any other equity investment. Among other things, you should carefully consider the risks described under the heading “Risk Factors” in this prospectus and in the documents incorporated by reference in this prospectus.

If the rights offering is not completed, will my subscription payment be refunded to me?

Yes. The subscription agent will hold all funds it receives in a segregated bank account until completion of the rights offering. If the rights offering is not completed, all subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable. If you own shares in “street name,” it may take longer for you to receive your subscription payment because the subscription agent will return payments through the record holder of your shares.

What fees or charges apply directly to me if I purchase shares of common stock in the rights offering?

We are not charging any fee or sales commission to issue subscription rights to you or to issue shares to you if you exercise your subscription rights. If you exercise your subscription rights through your broker, dealer, custodian bank or other nominee, you are responsible for paying any fees your intermediary may charge you.

What are the material U.S. federal income tax consequences of exercising my subscription...


More