Item 1.01 Entry into a Material
Definitive Agreement.
On
September 12, 2016, Matinas BioPharma Holdings, Inc. (the “Company”) conducted a final closing (the “Closing”)
of a private placement offering to accredited investors (the “Offering”) of shares (the “Series A Preferred
Shares”) of the Company’s Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”).
The terms of the Series A Preferred Stock are set forth in the Certificate of Designations for the Series A Preferred Stock, a
copy of which was filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 1, 2016. In connection
with the Offering, the Company entered into definitive subscription agreements (the “Subscription Agreements”) with
accredited investors (the “Investors”) and issued an aggregate of 1,600,000 Series A Preferred Shares at a purchase
price of $5.00 per share, for aggregate gross proceeds to the Company of $8.0 million. The Subscription Agreements contain customary
representations, warranties and agreements. The net proceeds to the Company from the Offering, after deducting the placement
agent fees described below and other estimated Offering expenses, were approximately $6.9 million. Certain of our officers and
directors, and entities affiliated with such individuals, and affiliates and related parties of the Placement Agent purchased
Series A Preferred Shares in this Offering.
The
Company entered into a Placement Agency Agreement with Aegis Capital Corp. (Adam Stern, a member of the Company’s Board
of Directors, is the Chief Executive Officer of SternAegis Ventures and Head of Private Equity Banking at Aegis Capital Corp.),
which acted as the Company’s exclusive placement agent (the “Placement Agent”) for the Offering. Pursuant to
the terms of the Placement Agency Agreement, in connection with the Offering, the Company paid the Placement Agent an aggregate
cash fee of $800,000 and non-accountable expense allowance of $240,000 and will issue to the Placement Agent or its designees
warrants (the “Placement Agent Warrants”) to purchase 1,600,000 shares of Common Stock at an exercise price of $0.50
per share. The Placement Agent Warrants provide for a cashless exercise feature and are exercisable for a period of five
years from the date of the initial closing of the Offering on July 29, 2016. We have also agreed to pay the Placement Agent similar
cash and warrant compensation with respect to, and based on, any individual or entity that the Placement Agent solicits interest
from in connection with this Offering, excluding existing stockholders of the Company and certain other specified investors, who
subsequently invests in us at any time prior to the date that is twelve (12) months following the final Closing of this Offering.
In addition, as previously disclosed, upon the initial closing, we entered into a three year, non-exclusive finder’s fee
agreement with the Placement Agent providing that if the Placement Agent shall introduce us to a third party that consummates
certain types of transactions with our Company, such as business combinations, joint ventures and licensing arrangements, then
the Placement Agent will be paid a finder’s fee, payable in cash at the closing of such transaction, equal to (a) 5% of
the first $1,000,000 of the consideration paid in such transaction; plus (b) 4% of the next $1,000,000 of the consideration paid
in such transaction; plus (c) 3% of the next $5,000,000 of the consideration paid in the such transaction; plus (d) 2.5% of any
consideration paid in such transaction in excess of $7,000,000. Further, we have granted the Placement Agent, the irrevocable
preferential right of first refusal to act as co-manager for any proposed public or private offering of the Company’s securities
where the Company utilizes a third party placement agent or underwriter, which right of first refusal expires twelve (12) months
from the final Closing.
The
securities issued in the Offering as described above, including the Series A Preferred Shares and the Placement Agent Warrants,
have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and were made pursuant
to the exemptions from registration provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated
thereunder. Such securities are therefore restricted in accordance with Rule 144 under the Securities Act.
This
Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any security. The securities
described herein have not been registered under the Securities Act or applicable state securities laws and may not be offered
or sold in the United States or any state thereof absent registration under the Securities Act and applicable state securities
laws or an applicable exemption from registration requirements.
The forgoing descriptions
of the Placement Agency Agreement, the Placement Agent Warrants and the Subscription Agreement are qualified by reference to the
full text of these documents, copies of each of which will be filed in our next periodic report due to be filed under the Exchange
Act.