Item 1.01.
Entry into a Material Definitive Agreement
Registered Direct Offering
On September 14, 2016, Caladrius Biosciences, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “RD Purchase Agreement”) by and among the Company and a single institutional investor (the “Purchaser”), pursuant to which the Company agreed to issue to the Purchaser, in a registered direct offering, an aggregate of 847,458 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $4.72 per share. The closing of the registered direct offering closed on September 14, 2016.
The net proceeds to the Company from the registered direct offering of the shares of Common Stock, after deducting the Company’s estimated offering expenses, is expected to be approximately $3.9 million.
The offer and sale of the shares of Common Stock in the registered direct offering is registered under the Securities Act of 1933, as amended (the “Securities Act”), on a registration statement on Form S-3 (File No. 333-206175), which became effective on August 28, 2015. A related prospectus supplement dated September 14, 2016 and the accompanying prospectus dated August 28, 2015 will be filed with the Securities and Exchange Commission (SEC) in connection with such offering.
Concurrent Private Placement
In concurrent private placements, on September 14, 2016, the Company entered into Securities Purchase Agreements (each a “Private Placement Purchase Agreement” and, collectively, the “Private Placement Purchase Agreements”) with certain accredited investors (the “Investors”) with whom it had a substantive, pre-existing relationship, including certain existing stockholders, for the sale by the Company of an aggregate of 4,449,153 shares of Common Stock, at a purchase price of $4.72 per share. The investments will be placed in two tranches: (i) up to $12.6 million upon an initial closing (the “Initial Closing”), and (ii) up to $8.4 million, subject to certain conditions, including the enrollment of 70 subjects in the Company’s Phase 2 CLBS03 clinical trial, in a second closing (the “Second Closing”). The Initial Closing is expected to occur on or about September 19, 2016 and the Second Closing shall occur within ten days after the satisfaction of the certain conditions outlined in the Private Placement Purchase Agreements. The aggregate gross proceeds for the sale of the shares of Common Stock in the private placement are expected to be approximately $21.0 million.
In connection with the concurrent private placement, the Company entered into a Registration Rights Agreement on September 14, 2016, with each of the Investors (the “Registration Rights Agreement”), which requires the Company to file a registration statement with the SEC, covering the resale of the shares of Common Stock issued in the private placement, and use its commercially reasonable efforts to cause such registration statement to be declared by the SEC within 90 days of the Initial Closing (or 120 days in the event such registration statement is reviewed by the SEC). Failure to do so or meet various other deadlines set forth in the Registration Rights Agreement will give rise to liquidated damages of 1% per month, up to a maximum of 3% so long as the event giving rise to the damages remains uncured, all as set forth in the Registration Rights Agreement.
The Investors also agreed to enter into lock-up agreements ranging from 90 to 180 days.
In addition, one of the investors in the private placement, with an expected investment of up to $5.0 million, will have a limited right to have a board observer (with no voting rights) for a period commencing on the date of the Initial Closing and ending on the second anniversary of the Initial Closing.
On September 15, 2016, the Company issued a press release announcing the registered offering and the concurrent private placements. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
The foregoing is only a summary of the material terms of the documents related to the registered direct offering and the concurrent private placement. The foregoing descriptions of the RD Purchase Agreement, each of the Private Placement Purchase Agreements and the Registration Rights Agreement are qualified in their entirety by reference to each of the forms RD Purchase Agreement, Private Placement Purchase Agreements and Registration Rights Agreement, which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.
A copy of the opinion of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., relating to the legality of the issuance of the shares of Common Stock in the registered direct offering is attached hereto as Exhibit 5.1.