Item 3.02
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Unregistered Sales of Equity Securities.
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As previously announced, on April 27, 2021, pursuant
to the Agreement and Plan of Merger, dated as of December 16, 2020, by and among Palisade Bio, Inc., formerly known as Seneca Biopharma,
Inc. (the “Company”), Leading Biosciences, Inc. (“LBS”) and Townsgate Acquisition Sub 1, Inc., a wholly owned
subsidiary of the Company (“Merger Sub”), the Company completed the merger transaction with LBS, pursuant to which Merger
Sub merged with and into LBS, with LBS surviving such merger as a wholly owned subsidiary of the Company (the “Merger”). In
addition, as previously announced, immediately prior to the Merger, the Company and LBS completed a private placement transaction (the
“Pre-Merger Financing”) with Altium Growth Fund, LP (the “Investor”) pursuant to that certain Securities Purchase
Agreement, by and among the Company, LBS and the Investor, dated December 16, 2020, as amended (the “Securities Purchase Agreement”),
for an aggregate purchase price of $20.0 million.
Issuance of Stock and Warrant to Ecoban Securities,
LLC (“Ecoban”)
In connection with the closing of the Merger and
the Pre-Merger Financing, on May 25, 2021, the Company issued to Ecoban (i) a warrant to purchase 18,353 shares of the Company’s
common stock (“Common Stock”) at a price of $17.72 per share (the “Ecoban Warrant”) and (ii) 118,833 shares of
Common Stock (the “Ecoban Shares”), as payment for a success fee for closing the Merger and Pre-Merger Financing.
The Ecoban
Warrant and Ecoban Shares are not registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state
securities laws. The Company has relied on the exemption from the registration requirements of the Securities Act by virtue of Section
4(a)(2) thereof and Rule 506 of Regulation D thereunder. Ecoban represented to the Company that it is an “accredited investor”
as defined in Regulation D of the Securities Act and that the Ecoban Warrant and Ecoban Shares were acquired solely for Ecoban’s
own account and for investment purposes and not with a view to the future sale or distribution.
Issuance of Equity Warrant
On May 20, 2021, pursuant to the terms of the
Securities Purchase Agreement, the Company issued to the Investor a warrant to purchase 4,995,893 shares of Common Stock at a price of
$5.53 per share (the “Equity Warrant”). The Equity Warrant is immediately exercisable and will have a term of five years from
the date all of the shares underlying the Equity Warrant have been registered for resale. The exercise price and number of shares underlying
the Equity Warrant may be subject to adjustment, if any, following each of the 45th, 90th and 135th days following April 27, 2021, as
more fully described in the section titled “Agreements Related to the Merger—Pre-Merger Financing” in the Company’s
prospectus/definitive proxy statement filed with the U.S. Securities and Exchange Commission on February 12, 2021.
The Equity Warrant is not registered under the Securities
Act or any state securities laws. The Company has relied on the exemption from the registration requirements of the Securities Act by
virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder. The Investor represented to the Company that it is an “accredited
investor” as defined in Regulation D of the Securities Act and that the Equity Warrant was acquired solely for the Investor’s
own account and for investment purposes and not with a view to the future sale or distribution.
Amendment of Promissory Notes and Issuance
of New Warrants
In 2020, LBS issued and sold to certain holders (the “Noteholders”)
(i) unsecured promissory notes in the aggregate principal amount of $0.6 million with an interest rate of 10% per annum and (ii) warrants
to purchase an aggregate of 70,000 shares of common stock of LBS at an exercise price of $0.73 per share (the “Old Warrants”).
In connection with the Merger, the Old Note Warrants automatically converted into warrants to purchase an aggregate of 1,904 shares of
Common Stock at a purchase price of $26.84 per share.
On May 25, 2021, the Company, LBS and the Noteholders amended the Notes
to extend the maturity date of the Notes to November 15, 2021 (the “Notes Amendment”). In connection with the Notes Amendment,
the Old Warrants were canceled, and the Company issued warrants to the Noteholders to purchase an aggregate of 8,000 shares of Common
Stock at a purchase price of $6.00 per share (the “New Warrants”).
The New Warrants are not registered under the Securities
Act or any state securities laws. The Company has relied on the exemption from the registration requirements of the Securities Act by
virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder. Each Noteholder represented to the Company that it is an “accredited
investor” as defined in Regulation D of the Securities Act and that the New Warrants were acquired solely for each Noteholder’s
own account and for investment purposes and not with a view to the future sale or distribution.