Item 1.01 Entry into a Material Definitive Agreement
On January 31, 2013, ARCA biopharma, Inc. (ARCAor theCompany) entered into a placement agency agreement (the Agency
Agreement) with Dawson James Securities, Inc. (the Placement Agent), pursuant to which the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of up to 987,820 shares of ARCAs common stock and
warrants to purchase up to 395,128 shares of ARCAs common stock in one or more public offerings (the Offerings) under the Companys registration statement on Form S-3 (File No.333-172686) (the Registration
Statement). ARCA has agreed to pay the Placement Agent an aggregate fee equal to 7% of the gross proceeds received in any Offering. ARCA has also agreed to reimburse the Placement Agent for expenses incurred by it in connection with any
Offering in amount equal to 1% of the aggregate gross proceeds raised. The Agency Agreement provides that the Placement Agent shall be the exclusive placement agent in connection with any Offering for a period of at least thirteen months from the
date of the Agency Agreement.
The Agency Agreement contains customary representations, warranties and covenants by ARCA. It also provides for
customary indemnification by each of ARCA and the Placement Agent for losses or damages arising out of or in connection with the sale of the securities being offered. ARCA has agreed to indemnify the Placement Agent for liabilities under the
Securities Act of 1933, as amended. ARCA has also agreed to contribute to payments the Placement Agent may be required to make with respect to such liabilities.
On January 31, 2013, ARCA entered into a subscription agreement (the Subscription Agreement) with certain institutional investors (the Investors) in connection with an
Offering, pursuant to which ARCA agreed to sell an aggregate of 987,820 shares of its common stock and warrants to purchase a total of 395,128 shares of its common stock to the Investors for aggregate gross proceeds, before deducting fees to the
Placement Agent and other estimated offering expenses payable by ARCA, of approximately $730,000. The common stock and warrants were sold in combination consisting of one share of common stock and a warrant to purchase 0.40 shares of common stock.
The purchase price for each share (with its related warrant) is $0.739, which is equal to the consolidated price of the stock and warrants, based on the closing bid price of $0.689 for the common stock as reported on the Nasdaq Capital Market on
January 30, 2013, and a price of $0.125 per warrant share. Subject to certain ownership limitations, the warrants will be exercisable on the date that the warrants are issued and will remain exercisable for five years thereafter at an exercise
price of $0.689 per share. The exercise price of the warrants is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.
The Offering was effected as a takedown off the Registration Statement, which became effective on April 4, 2011, pursuant to a prospectus supplement
filed with the Securities and Exchange Commission on February 1, 2013.
ARCA has also agreed to indemnify the Investors against certain
losses resulting from its breach of any of its representations, warranties, covenants under agreements with the Investors.
The net proceeds
to ARCA from the Offering, after deducting placement agent fees and the estimated offering expenses borne by ARCA, and excluding the proceeds, if any, from the exercise of the warrants issued in the Offering, are expected to be approximately
$630,000. The Offering is expected to close on or before February 5, 2013. After giving effect to the Offering, but without giving effect to the exercise of the warrants being offered, ARCA will have 19,088,298 shares of common stock
outstanding.
A copy of the opinion of Cooley LLP relating to the legality of the issuance and sale of the securities in
the Offering is attached as Exhibit 5.1 hereto. The foregoing summaries of the terms of the Agency Agreement, the form of warrant to be issued to the Investors and the Subscription Agreement are subject to, and qualified in their entirety by, such
documents attached hereto as Exhibits 1.1, 4.1, and 10.1, respectively, which are incorporated herein by reference.
Forward-Looking
Statements
Statements in this report that are not strictly historical in nature constitute forward-looking statements.
Such statements include, but are not limited to, ARCAs issuance of securities, the amount of proceeds from the Offering and the closing of the Offering. Such forward-looking statements involve known and unknown risks, uncertainties and other
factors, that may cause actual results to be materially different from any results expressed or implied by such forward-looking statements. All forward-looking statements are qualified in their entirety by this cautionary statement. ARCA is
providing this information as of this date and does not undertake any obligation to update any forward-looking statements contained in this report as a result of new information, future events or otherwise.