Item 1.01.
|
Entry into a Material Definitive Agreement
|
As previously reported, the Company previously entered into a registered direct offering (the “July
Offering”) with certain institutional investors (the “July Investors”) which was consummated on July 6, 2016
(the “Closing Date”) and included Common Stock Purchase Warrants exercisable for five years following the six month
anniversary of their issuance at $0.60 per share (the “Offered Warrants”). Under the terms of the July Offering, the
July Investors have a Right of Participation for six months following the July 6 Closing Date to participate in a Subsequent Financing
by the Company up to one half the amount of such financing (not to exceed $10,000,000).
Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the
“
Purchase Agreement
”), between the Company and the Holders dated July 4, 2016, a copy of which is attached
as Exhibit 10.1 to the Company’s Form 8-K filed on July 11, 2016.
The
July Investors elected to exercise their Right of Participation in connection with the Company’s warrant reprice financing
dated August 23, 2016.
On September 9, 2016,
the Company entered into agreements (the “Agreements”) with the July Investors, pursuant to which the July Investors
will exercise all of their July Warrants to purchase 3,700,000 shares of Common Stock, in the aggregate. This warrant exercise
under the July Investors’ Right of Participation is taking place on the same terms as the August 23, 2016 transaction: the
exercise price of the Offered Warrants is reduced to $0.35 per share, the exercise price is $0.41 per share for new Series F Common
Stock Purchase Warrants (the “Series F Warrants”) to purchase up to 3,700,000 shares of Common Stock and the exercise
period is five years (starting six months after issuance). The gross proceeds to the Company will be $1,295,000.
In addition, the Company
entered into the same Registration Rights Agreement with the July Investors as was part of the August 23, 2016 transaction. Pursuant
to this Agreement, 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 F Warrants 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.
The
foregoing summaries of the terms of the Agreement, the Series F 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, and 10.3,
respectively, and are incorporated herein by reference.