Item 1.01.
|
Entry into a Material Definitive Agreement.
|
Private Placement
On December 23, 2019, Idera Pharmaceuticals, Inc. (the “Company”)
entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with institutional investors named
therein (the “Purchasers”), providing for a private placement transaction exempt from the registration requirements
of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to which the Company has issued and sold
shares of the Company’s Series B1 Convertible Preferred Stock, par value $0.01 per share (the “Series B1 Preferred
Stock”), and warrants (the “Warrants”) to purchase shares of the Company’s common stock, par value $0.001
per share (the “Common Stock”), for aggregate gross proceeds of approximately $3.9 million (the “Transaction”).
Pursuant to the Securities Purchase Agreement, the Company has also agreed to issue and sell to the Purchasers, at their option
and subject to certain conditions (including the approval by the Company’s shareholders of an amendment to the Company’s
Restated Certificate of Incorporation, as amended, to increase the Company’s authorized shares of Common Stock), shares of
the Company’s Series B2 Convertible Preferred Stock, par value $0.01 per share (“Series B2 Preferred Stock”),
Series B3 Convertible Preferred Stock, par value $0.01 per share (“Series B3 Preferred Stock”), and Series B4 Convertible
Preferred Stock, par value $0.01 per share (“Series B4 Preferred Stock” and, together with the Series B1 Preferred
Stock, Series B2 Preferred Stock and Series B3 Preferred Stock, the “Series B Preferred Stock”), and Warrants to purchase
Common Stock, for aggregate gross proceeds of up to an additional $87.6 million over a 21-month period. The transaction was
priced at-the-market under the Nasdaq rules. Each share of the Series B1 convertible preferred stock and the associated warrant
had a combined purchase price on an as converted basis of $1.645 and the Purchasers paid the Company an additional $6.2 million
(the “Option Fee”), representing $0.125 for each share of Common Stock underlying (i) the Series B2 Preferred Stock
and accompanying Warrants, (ii) the Series B3 Preferred Stock and accompanying Warrants and (iii) Series B4 Preferred Stock and
accompanying Warrants, issuable in the Transaction. In the event the Company does not receive the required shareholder approval
on or prior to December 31, 2020, the Option Fee shall be returned to the Purchasers within five business days after such date.
The Warrants issuable pursuant to the Securities Purchase Agreement
will be immediately exercisable upon issuance, provided that the holder will be prohibited, subject to certain exceptions, from
exercising a Warrant for shares of Common Stock to the extent that immediately prior to or after giving effect to such exercise,
the holder, together with its affiliates and other attribution parties, would own more than 4.99% of the total number of shares
of Common Stock then issued and outstanding (a “Beneficial Ownership Limitation”), which percentage may be changed
at the holder’s election to a lower percentage at any time or to a higher percentage not to exceed 19.99% upon 61 days’
notice to the Company. The Warrants will expire seven years from the date of issuance. The holder may elect to exercise a Warrant
for shares of Series B1 Preferred Stock in connection with a Beneficial Ownership Limitation.
Specifically, pursuant to the Securities Purchase Agreement,
the Transaction consisted of four separate tranches. In the first tranche the Company issued and sold 23,684 shares of Series
B1 Preferred Stock, at a purchase price of $152 per share and a conversion price of $1.52 per share, and related Warrants to purchase
up to 2,368,400 shares of Common Stock (or, if the holder elects to exercise the Warrants for shares of Series B1 Preferred Stock,
23,684 shares of Series B1 Preferred Stock), at an exercise price of $1.52 per share (or, if the holder elects to exercise the
Warrants for shares of Series B1 Preferred Stock (“Series B1 Preferred Warrant Shares”), $152 per Series B1 Preferred
Warrant Share). In the subsequent three tranches the Company agreed to issue and sell the following securities: (a) tranche 2
consists of 98,685 shares of Series B2 Preferred Stock, at a purchase price of $152 per share and a conversion price of $1.52
per share, and related Warrants to purchase up to 9,868,500 shares of Common Stock (or, if the holder elects to exercise the Warrants
for shares of Series B1 Preferred Stock, 98,685 shares of Series B1 Preferred Stock, at an exercise price of $1.52 per share (or,
if the holder elects to exercise the Warrants for Series B1 Preferred Warrant Shares, $152 per Series B1 Preferred Warrant Share);
(c) tranche 3 consists of 82,418 shares of Series B3 Preferred Stock, at a purchase price of $182 per share and a conversion price
of $1.82 per share, and related Warrants to purchase up to 6,593,440 shares of Common Stock (or, if the holder elects to exercise
the Warrants for shares of Series B1 Preferred Stock, 65,934 shares of Series B1 Preferred Stock), at an exercise price of $1.82
per share (or, if the holder elects to exercise the Warrants for Series B1 Preferred Warrant Shares, $182 per Series B1 Preferred
Warrant Share); and (d) tranche 4 consists of 82,418 shares of Series B4 Preferred Stock, at a purchase price of $182 per share
and a conversion price of $1.82 per share, and related Warrants to purchase up to 6,593,440 shares of Common Stock (or, if the
holder elects to exercise the Warrants for shares of Series B1 Preferred Stock, 65,934 shares of Series B1 Preferred Stock), at
an exercise price of $1.82 per share (or, if the holder elects to exercise the Warrants for Series
B1 Preferred Warrant Shares, $182 per Series B1 Preferred Warrant Share).
The purchase and sale of the securities issuable under tranches
2, 3 and 4 may occur in two or more separate closings, each to be conducted at the Purchasers’ discretion within five days’
notice to the Company, and is subject to the shareholder approval requirement discussed above (the “Required Shareholder
Approval”), and the right of the Purchasers to purchase such securities will expire (i) nine months after the Required Shareholder
Approval, with respect to the Series B2 Preferred Stock, (ii) 15-months after the Required Shareholder Approval, with respect
to the Series B3 Preferred Stock, and (iii) 21-months after the Required Shareholder Approval, with respect to the Series
B4 Preferred Stock, if not exercised prior to that date. The Company has the right to decline the Series B4 Preferred Stock investment
if its Common Stock trades at $7.60 for 20 days out of 30 days subsequent to the closing of the Series B3 Preferred Stock investment.
The securities issued and sold in connection with the Transaction
are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act. Each Purchaser is either
(i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
Concurrently with the execution of the Securities Purchase Agreement,
the Company entered into voting agreements (each, a “Voting Agreement”) with the Purchasers, pursuant to which each
Purchaser agreed, in any annual, special or adjourned meeting of the shareholders of the Company at which the matter covered by
the Required Shareholder Approval are presented to the Company’s shareholders for approval, that it will vote, by proxy or
otherwise, all of its shares of voting capital stock of the Company (i) in favor of such matter and any matter that would reasonably
be expected to facilitate such Required Shareholder Approval, and (ii) against approval of any proposal made in opposition to such
matters. The Voting Agreements terminate upon the earliest to occur of (i) the date on which the Company receives the Required
Shareholder Approval, (ii) the termination of the Securities Purchase Agreement in accordance with its terms and (iii) December
31, 2020.
In addition, concurrently with the execution of the Securities
Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”)
with the Purchasers, pursuant to which the Company agreed, following demand by any Purchaser, to file with the Securities and Exchange
Commission a Registration Statement on Form S-3 covering the resale of the shares of Common Stock issuable upon conversion
of the Series B Preferred Stock or exercise of the Warrants (as applicable) by the Purchasers as promptly as reasonably practicable
following such demand, and in any event within 60 days of such demand.
The foregoing descriptions of the Securities Purchase Agreement,
Voting Agreement and Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference
to the full text of the Securities Purchase Agreement and the forms of Registration Rights Agreement and Voting Agreement attached
thereto as Exhibit C and Exhibit D, respectively, which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
The foregoing description of the Warrants does not purport to be complete and is qualified in its entirety by reference to the
full text of the form of Warrant, which is filed herewith as Exhibit 4.1 and is incorporated herein by reference.