Item 1.01.
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Entry into a Material Definitive Agreement
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As previously reported,
the Company previously entered into registered direct offerings with certain institutional investors, which closed on November
25, 2013, December 23, 2015 and March 3, 2016 (collectively, the “Offerings”), and included, respectively, Common Stock
Purchase Warrants exercisable for five years at $6.00 per share (the “November Warrants”), Common Stock Purchase Warrants
exercisable for five years following the six month anniversary of their issuance at $4.50 per share (the “December Warrants”)
and Series A Common Stock Purchase Warrants exercisable for five years following the six month anniversary of their issuance at
$2.25 per share (the “Series A Warrants” and, collectively with the November Warrants and the December Warrants, the
“Offered Warrants”).
On August 23, 2016,
the Company entered into agreements (the “Agreements”) with certain holders (the “Holders”) of the Offered
Warrants, pursuant to which the Holders are exercising all of their Offered Warrants to purchase 3,656,817 shares of Common
Stock, in the aggregate. In consideration, the Company agreed to reduce the exercise price of the Offered Warrants to $0.35 per
share, for gross proceeds of approximately $1,279,885, and agreed to issue new Series E Common Stock Purchase Warrants (the “Series
E Warrants”) to purchase up to 3,656,817 shares of Common Stock at an exercise price of $0.41 per share (subject to customary
adjustments such as for stock splits and dividends), with an exercise period of five years, commencing six months after issuance.
In addition, the Company
entered into a Registration Rights Agreement with the Holders pursuant to which the Company will file a registration statement
with the SEC under the Securities Act of 1933, as amended, covering the resale of the shares underlying the exercise of the Series
E Warrants (the “Registrable Securities”) within 30 days after execution of the Registration Rights Agreement.
The Company plans to
use the proceeds of the offering for costs related to preparing for and initiating Phase II clinical trials, and working capital.
In connection with
the Offering and the concurrent private placement, the Company engaged H.C. Wainwright & Co., LLC (the “Placement Agent”)
to act as its exclusive placement agent. Pursuant to an Engagement Agreement dated August 19, 2016 (the “Engagement Agreement”),
the Company agreed to pay the Placement Agent a cash placement fee equal to 7% of the aggregate purchase price and warrants exercisable
for 7% of the aggregate number of shares of Common Stock sold in the offering (the “Compensation Warrant”), at an exercise
price of 125% of the price per share in the offering, with an exercise period of five years, commencing six months after issuance.
The foregoing summaries
of the terms of the Agreement, the Series E Warrants, the Registration Rights Agreement and the Engagement Agreement, are subject
to, and qualified in their entirety by, such documents attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and
are incorporated herein by reference.