ITEM 1.01.
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
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On March 8, 2018, VirnetX Holding Corporation (the “Company”) entered into an Amendment No. 1 (the “Amendment”) to its Sales Agreement, dated August 20, 2015 (the “Agreement” and as amended by the Amendment, the “Amended Agreement”), with Cowen and Company, LLC, as sales agent (“Cowen”), pursuant to which the Company increased the maximum aggregate offering price of the Company’s common stock, par value $0.0001 per share, (the “ Common Stock”) that the Company may offer and sell, from time to time, through Cowen, from $35,000,000 to $50,000,000 (such additional $15,000,000 shares of Common Stock, the “Shares”). The Shares will be issued pursuant to the Company’s previously filed and effective Registration Statement on Form S-3 (File No. 333-206497), the base prospectus, dated August 20, 2015 (the “Registration Statement”), filed as part of such Registration Statement, and the prospectus supplement, dated March 9, 2018, filed concurrently with this Current Report on Form 8-K. The Company is not obligated to make any sales of the Shares under the amended Agreement. Subject to the terms and conditions of the amended Agreement, Cowen will act as sales agent and use commercially reasonable efforts to sell on the Company's behalf all of the shares of common stock requested to be sold by the Company, consistent with its normal trading and sales practices, on mutually agreed upon terms between Cowen and the Company. The Company intends to use the proceeds of this offering for Gabriel product development and marketing, and general corporate purposes, which may include working capital, capital expenditures, other corporate expenses and acquisitions of complementary products, technologies or businesses.
Under the Amended Sales Agreement, Cowen may sell the Shares by methods deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on the NYSE American, LLC (formerly the NYSE MKT LLC), on any other existing trading market for the Shares or to or through a market maker. In addition, under the Amended Agreement, Cowen may sell the Shares by any other method permitted by law, including in privately negotiated transactions.
The offering of Shares pursuant to the Amended Agreement will terminate upon the earlier of (a) the sale of all of the Shares subject to the Amended Agreement or (b) the termination of the Amended Agreement by Cowen or the Company.
The Company will pay Cowen a commission of 3.0% of the gross sales price per share sold and has agreed to provide Cowen with customary indemnification and contribution rights.
The descriptions of the Agreement and the Amendment do not purport to be complete and are qualified in their entirety by reference to the Agreement and the Amendment filed as exhibits herewith. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The Agreement and the Amendment are incorporated by reference as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K.
(d)
Exhibit No.
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Description
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Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
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Sales Agreement, dated August 20, 2015 by and between VirnetX Holding Corporation and Cowen and Company, LLC.*
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Amendment No. 1 to Sales Agreement, dated March 8, 2018, by and between VirnetX Holding Corporation and Cowen and Company, LLC.
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23.1
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Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1).
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Consent of Farber Hass Hurley LLP, independent registered accounting firm.
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* Incorporated herein by reference from Exhibit 1.2 of the Company’s Registration Statement on Form S-3, dated August 20, 2015, File No. 333-206497.