Item
1.01 Entry into a Material Definitive Agreement.
On June 28, 2021, InMed Pharmaceuticals Inc. (the
“Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional accredited
investor (the “Investor”), providing for the issuance and sale by the Company in a private placement (the “Offering”)
of approximately $12 million in securities consisting of (i) 890,000 common shares of the Company (the “Shares”), (ii) pre-funded
warrants to purchase up to 3,146,327 Shares of the Company (the “Pre-Funded Warrants”), and (iii) warrants to purchase up to
4,036,327 Shares of the Company (the “Series A Warrants”), each whole Series A Warrant being exercisable for one Share immediately
upon issuance, at a purchase price of $2.973 per Share and Warrant or $2.9729 per Pre-Funded Warrant. The Series A Warrants
have an exercise price equal to $2.848 per Share and contain cashless exercise provisions upon the occurrence of certain events, and will
expire five years from the issuance date. The Purchase Agreement also provides to the Investor whose purchase of Shares in this Offering
would otherwise result in such purchaser’s beneficial ownership exceeding 4.99% (the “Beneficial Ownership Limitation”)
of the Company’s outstanding common shares, in lieu of Shares, the Pre-Funded Warrants, each Pre-Funded Warrant will be immediately
exercisable for one common share (collectively with the shares for the exercise of Series A Warrants, the “Warrant Shares”)
at an exercise price of $0.0001. The Pre-Funded Warrants may be exercised at any time until exercised in full. However, neither the Pre-Funded
Warrants nor the Series A Warrants may be exercised to the extent that such exercise would cause the Investor and its affiliates to beneficially
own in excess of the Beneficial Ownership Limitation. The closing of the sale of these securities is expected to occur on or about July
2, 2021, subject to the satisfaction of customary closing conditions.
The
Company estimates that the net proceeds from the Offering will be approximately $11 million. The net proceeds received by the Company
from the Offering will be used to continue pipeline development, advance business development activities and for general working capital
purposes.
The
exercise price of the Warrants is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar
recapitalization transactions.
The securities will be issued and sold without
registration under the Securities Act of 1933 (the “Securities Act”) in reliance on the exemptions provided by Section 4(a)(2)
of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state securities
laws. Accordingly, the Investor may exercise the Warrants and sell the Warrant Shares and the Shares only pursuant to an effective registration
statement under the Securities Act of 1933 covering the resale of those shares, an exemption under Rule 144 under the Securities Act or
another applicable exemption under the Securities Act. Pursuant to a Registration Rights Agreement, dated June 28, 2021, by and between
the Company and the Investor (the “Registration Rights Agreement”), the Company has agreed to file one or more registration
statements with the SEC covering the resale of the Shares and the Warrant Shares within ten business days of the date of the Registration
Rights Agreement.
In connection with the Offering, on June 24, 2021,
and as amended on June 28, 2021, the Company entered into a letter agreement (the “Placement Agency Agreement”) with H.C.
Wainwright & Co., LLC regarding its engagement as the exclusive placement agent (the “Placement Agent”) for the Offering.
The Placement Agent did not purchase or sell any
securities, nor is it required to arrange the purchase or sale of any minimum number or dollar amount of securities. The Placement Agent
agreed to use its reasonable best efforts to arrange for the sale of all of the securities being offered in the Offering. The Placement
Agent will be paid a cash fee equal to 7.5% of the gross proceeds received by the Company from the sale of the securities at the closing
of the Offering, subject to certain deductions included in the Placement Agency Agreement. In addition the Placement Agent (or its designees)
will also be issued warrants to purchase that number of Shares of the Company equal to 7.5% of the aggregate number of Shares and Pre-Funded
Warrants placed in the Offering, subject to certain deductions included in the Placement Agency Agreement. Furthermore, the Company has
agreed to pay the Placement Agent certain expenses, and subject to certain exceptions, provided the Placement Agent certain tail rights
and right of first refusal.
The Form of Series A Warrant and the Form of the
Pre-Funded Warrants, the Form Purchase Agreement and the Form Registration Rights Agreement are filed hereto as Exhibits 4.1, 4.2, 10.1,
and 10.2, respectively, to this Current Report on Form 8-K. The foregoing summaries of the terms of these documents are subject to, and
qualified in their entirety by, such documents attached hereto, which are incorporated herein by reference.