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ITEM 1.01
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Entry into a Material Definitive Agreement.
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On September
26, 2017, Kadmon Holdings, Inc. (the “Company”) entered into the following agreements in connection with offerings
of an aggregate of 24,000,000 shares of its common stock, par value $0.001 per share (the “Shares”), together with
accompanying warrants to purchase an aggregate of 9,600,000 shares of its common stock (the “Warrants”) at a combined
public offering price of $3.001 per share and accompanying warrant: (i) an underwriting agreement (the “Underwriting Agreement”),
with Jefferies LLC and Piper Jaffray & Co., as representatives of the several underwriters, relating to an underwritten offering
(the “Underwritten Offering”) of 18,500,000 shares of common stock, together with accompanying warrants to purchase
an aggregate of 7,400,000 shares of common stock; and (ii) subscription agreements (collectively, the “Subscription Agreements”)
with certain institutional investors, relating to a registered direct offering (the “Direct Offering” and, together
with the Underwritten Offering, the “Offerings”) of an aggregate of 5,500,000 shares of common stock, together with
accompanying warrants to purchase an aggregate of 2,200,000 shares of common stock. In addition, the Underwriting Agreement provides
the underwriters in the Underwritten Offering a 30-day option to purchase up to an additional 2,775,000 shares of common stock
and/or warrants to purchase an additional 1,110,000 shares of common stock from the Company (the “Underwriters’ Option”).
The Shares
and Warrants are being sold in combination, with one Warrant for each Share sold, representing the right to purchase 0.40 shares
of common stock. The combined purchase price to the public for each Share and accompanying Warrant is $3.001. The combined purchase
price to be paid to the Company for each Share and accompanying Warrant will be $2.82094. The closing of the Underwritten Offering
is expected to take place on September 28, 2017, subject to the satisfaction of customary closing conditions. The closing of the
Direct Offering is expected to take place on September 28, 2017 with respect to certain institutional investors and on or about
October 10, 2017 with respect to other institutional investors, in each case subject to the satisfaction of customary closing
conditions. The Company estimates that the net proceeds from the Offerings, including the exercise of the Underwriters’
Option but excluding the proceeds, if any, from the exercise of the Warrants issued in the Offerings, will be approximately $75.3
million after deducting the underwriting discount and estimated offering expenses payable by the Company.
The Warrants
may be exercised at any time on or after September 28, 2017 until September 28, 2022. The initial exercise price for the Warrants
will be $3.35, subject to appropriate adjustment in the event of certain stock splits, dividends, recapitalizations or similar
events affecting the Company’s common stock.
The Shares
and Warrants are being offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (Registration
No. 333-219712) registering an aggregate of $150 million of designated securities of the Company (the “Registration Statement”).
The Registration Statement was declared effective by the SEC on August 11, 2017.
The Underwriting
Agreement contains customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification
obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, other obligations
of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement
were made only for purposes of such agreements and as of specific dates, were solely for the
benefit
of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
Upon the closing of the Offerings, the Company will enter into a warrant agreement (the “Warrant Agreement”) with
American Stock Transfer & Trust Company, LLC (the “Warrant Agent”), pursuant to which the Warrants will be
issued and the Warrant Agent will act as warrant agent for the Warrants. The terms and conditions of the Warrants are set
forth in the Warrant Agreement and the form of Warrant Certificate attached as Exhibit A thereto.
A copy of
the legal opinion of Davis Polk & Wardwell LLP, relating to the Shares and the Warrants issued in the Offerings, is filed
as Exhibit 5.1 to this Current Report on Form 8-K and is filed with reference to, and is hereby incorporated by reference into,
the Registration Statement.
The foregoing
summaries of the terms of the Underwriting Agreement, the Warrants and the Subscription Agreements are subject to, and qualified
in their entirety by such documents attached herewith as Exhibits 1.1, 4.1, and 10.1, to this Current Report on Form 8-K and are
incorporated by reference herein.