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Item 3.02
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Unregistered Sales of Equity Securities.
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On September 16, 2019, Ovid Therapeutics Inc. (the “Company”) entered into an exchange agreement (the
“Exchange Agreement”) with entities affiliated with Biotechnology Value Fund, L.P. (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,262,000 shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), owned by the Exchanging Stockholders for an aggregate of 1,262 shares (the “Exchange Shares”) of the Company’s Series
A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). The Exchange Shares were issued without registration under the Securities Act of 1933, as amended (the “Securities
Act”), in reliance on the exemption from registration contained in Section 3(a)(9) of the Securities Act.
The Exchange
Shares are of the same class of shares of Series A Preferred Stock that the Company originally issued in an underwritten public offering completed in February 2019. The preferences, rights and limitations of the Series A Preferred Stock are set
forth in the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Amended and Restated Certificate of Designation”). Each share of Series A
Preferred Stock is convertible into 1,000 shares of Common Stock at any time at the holder’s option. However, the holder will be prohibited, subject to certain exceptions, from converting shares of Series A Preferred Stock into shares of Common
Stock if, as a result of such conversion, the holder, together with its affiliates, would own more than, at the written election of the holder, either 9.99% or 14.99% of the total number of shares of Common Stock then issued and outstanding, which
percentage may be changed at the holder’s election to any other number less than or equal to 19.99% upon 61 days’ notice to us; provided, however, that effective 61 days after delivery of such notice, such beneficial ownership limitations
shall not be applicable to any holder that beneficially owns either 10.0% or 15.0%, as applicable based on the holder’s initial written election noted above, of the total number of shares of Common Stock issued and outstanding immediately prior
to delivery of such notice. In the event of a liquidation, dissolution, or winding up of the Company, holders of Series A Preferred Stock will receive a payment equal to $0.001 per share of Series A Preferred Stock before any proceeds are
distributed to the holders of Common Stock. In the event of a merger, consolidation, exchange offer or similar other transaction, the holders of Series A Preferred Stock, will receive the same consideration as the holders of Common Stock, upon
conversion of the Series A Preferred Stock. Shares of Series A Preferred Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding shares of Series A Preferred Stock
will be required to amend the terms of the Series A Preferred Stock. Shares of Series A Preferred Stock will be entitled to receive dividends equal to (on an as-if-converted-to-Common Stock basis), and in the same form and manner as, dividends actually paid on shares of Common Stock, and will rank:
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senior to all Common Stock;
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senior to any class or series of capital stock hereafter created specifically ranking by its terms junior to the
Series A Preferred Stock;
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on parity with any class or series of capital stock hereafter created specifically ranking by its terms on parity
with the Series A Preferred Stock; and
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junior to any class or series of capital stock hereafter created specifically ranking by its terms senior to the
Series A Preferred Stock;
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in each case, as to distributions of assets upon the Company’s liquidation, dissolution or winding up,
whether voluntarily or involuntarily.
The description of the Amended and Restated Certificate of Designation and Exchange Agreement are
not complete and are qualified in their entirety by reference to the Amended and Restated Certificate of Designation and Exchange Agreement, which are filed as Exhibits 3.1 and 10.1 to this Current Report on Form
8-K and incorporated herein by reference. The representations, warranties and covenants made by the Company in the Exchange Agreement were made solely for the benefit of the parties to the Exchange Agreement,
including, in some cases, for the purpose of allocating risk among the parties thereto, and should not be deemed to be a representation, warranty or covenant to investors. Such representations, warranties and covenants should not be relied on as
accurately representing the current state of the Company’s affairs.