On May 11, 2017, Conatus Pharmaceuticals Inc. (the
“Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Stifel, Nicolaus & Company, Incorporated and SunTrust Robinson Humphrey, Inc., as representatives of the several underwriters named
therein (collectively, the “Underwriters”), relating to the issuance and sale of 5,200,000 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). The price to the public in this offering is
$5.50 per share. The Underwriters have agreed to purchase the shares from the Company pursuant to the Underwriting Agreement at a price of $5.17 per share. The net proceeds to the Company from the offering are expected to be approximately
$26.6 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The offering is expected to close on or about May 16, 2017, subject to customary closing conditions. In addition,
under the terms of the Underwriting Agreement, the Company has granted the Underwriters a
30-day
option to purchase up to 780,000 additional shares of Common Stock.
The Company intends to use approximately $15.4 million of the net proceeds from the offering to fund pipeline expansion and for working
capital and other general corporate purposes, and intends to use approximately $11.2 million of the net proceeds to repurchase and retire 2,166,836 shares of its Common Stock held by funds affiliated with Advent Private Equity (the “Advent
Shares”) at a price equal to the net proceeds per share that the Company will receive from this offering, before expenses.
The
offering is being made pursuant to the Company’s effective registration statement on Form
S-3
(Registration Statement
No. 333-198142)
previously filed with and
declared effective by the Securities and Exchange Commission (the “SEC”) and a prospectus supplement and accompanying prospectus filed with the SEC.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing,
indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties and covenants
contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
The repurchase of the Advent Shares was made pursuant to a Stock Purchase Agreement entered into between the Company and the funds
affiliated with Advent Private Equity on May 10, 2017 (the “Stock Purchase Agreement”).
The foregoing descriptions of the
Underwriting Agreement and the Stock Purchase Agreement are not complete and are qualified in their entirety by reference to the full text of the Underwriting Agreement and the Stock Purchase Agreement, copies of which are filed as Exhibit 1.1 and
Exhibit 10.1, respectively, to this report and are incorporated by reference herein. A copy of the opinion of Latham & Watkins LLP relating to the legality of the issuance and sale of the Common Stock in the offering is attached as Exhibit
5.1 to this report.
The Company issued press releases on May 10, 2017 and May 11, 2017 announcing the commencement of the
offering and the pricing of the offering, respectively, which press releases are attached as Exhibits 99.1 and 99.2, respectively, to this report.
* * *
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts contained in this report are forward looking statements, including statements regarding: the completion, timing and size of the public offering and the anticipated use of proceeds therefrom. In
some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,”
“project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. These forward-looking
statements speak only as of the date of this report and are subject to a number of risks, uncertainties and assumptions, including: the risks and uncertainties associated with market conditions and the satisfaction of customary closing conditions
related to the offering, as well risks and uncertainties inherent in the Company’s business, including those risks described in the Company’s periodic reports it files with the SEC. The events and circumstances reflected in the
Company’s forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, the Company does not plan to publicly
update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.