Item 1.01
Entry into a Material Definitive Agreement.
On November 22, 2016, Jaguar Animal Health, Inc. (the Company) entered into a securities purchase agreement (the Purchase Agreement) with certain institutional investors (the Investors) pursuant to which it agreed to sell to the Investors an aggregate of 1,666,668 shares of the Companys common stock (Shares), par value $0.0001 per share (the Common Stock), at a purchase price of $0.60 per share for total gross proceeds of approximately $1.0 million. Pursuant to the Purchase Agreement, the Company also agreed to issue and sell to the Investors (i) warrants to purchase up to an aggregate of 1,666,668 shares of Common Stock, at an exercise price of $0.75 per share (the Series A Warrants), (ii) warrants to purchase up to an aggregate 1,666,668 shares of Common Stock, at an exercise price of $0.90 per share (the Series B Warrants), and (iii) warrants to purchase up to an aggregate 1,666,668 shares of Common Stock, at an exercise price of $1.00 per share (the Series C Warrants and together with the Series A Warrants and the Series B Warrants, the Warrants). The Warrants are not exercisable until six months after the date of issuance. From that initial exercisable date, the Series A Warrants will have a term of 5 years, the Series B Warrants will have a term of 6 months, and the Series C Warrants will have a term of 1 year. The potential gross proceeds from the Warrants, if fully exercised on a cash basis, will be approximately $4.4 million.
The Warrants contain limitations that prevent the holder thereof from acquiring shares upon exercise of a Warrant that would result in the number of shares beneficially owned by it and its affiliates exceeding 4.99%, or 9.99% upon notice to the Company, of the total number of shares of the Companys Common Stock then issued and outstanding.
The closing is expected to take place on or about November 29, 2016, subject to the satisfaction of customary closing conditions. Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC (the placement agent), served as the exclusive placement agent for the offering. The Company has agreed to pay the placement agent an aggregate fee equal to 8.0% of the gross proceeds received by the Company from the sale of the securities in the transaction. The Company also agreed to grant to the placement agent or its designees warrants (the Placement Agent Warrants) to purchase up to an aggregate of 133,333 shares of Common Stock with same terms as the Series A Warrants, except that the Placement Agent Warrants have an exercise price equal to $0.75. The Company will also pay the placement agent a reimbursement for legal fees and expenses of the placement agent of up to $65,000.
The securities described above were offered and will be sold pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the Securities Act), pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
In connection with the transactions described above, the Company also entered into a registration rights agreement with the Investors (the Registration Rights Agreement), pursuant to which the Company agreed to register the shares of Common Stock acquired from the Company (including upon any exercise of Warrants). The Company is required to file a registration statement for the resale of such securities within 10 business days following the pricing date and to use its commercially reasonable efforts to cause each such registration statement to be declared effective no later than 60 days following the pricing date (or 90 days following pricing date, if the Securities and Exchange Commission determines to review the registration statement). The Company may incur liquidated damages if it does not meet certain deadlines with respect to its registration obligations under the Registration Rights Agreement or if certain other events occur. The Company also agreed to other customary obligations regarding registration, including indemnification and maintenance of the effectiveness of the registration statement.
The forms of Purchase Agreement, Registration Rights Agreement, Series A Warrants, Series B Warrants, Series C Warrants and Placement Agent Warrants are filed as Exhibits 10.1, 10.2, 4.1, 4.2, 4.3 and 4.4, respectively, to this Current Report on Form 8-K, and such documents are incorporated herein by reference. The foregoing is only a brief description of the material terms of the Purchase Agreement, the Registration Rights Agreement and the Warrants, does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to such exhibits.