Item 1.01 Entry into a Material Definitive Agreement
Bridge Financing
On April 2, 2018. Rezolute, Inc. (the “
Company
”,
“
we
”, “
us
” ,“
our
” or “
Rezolute
”)
completed a second closing on a convertible note financing (the “
Debt Financing
”). In connection with
the closing we issued a secured convertible promissory note (the
Note
”) along with a warrant (the “
Warrant
”)
to purchase shares of our common stock. We received gross proceeds from this closing of $4.0 million, excluding transaction
costs, fees and expenses. With this closing the initial investments of $700,000 that was invested in the convertible note financing
were amended to agree to the terms agreed to with investors in this closing.
Notes
The Note bears interest at a rate of 12% per annum and is payable
in a single cash payment on January 31, 2019 (the “
Maturity Date
”). In the event we
issue equity securities in a transaction or series of related transactions (the “
Qualified Financing
”)
resulting in aggregate gross proceeds to us of at least $15,000,000, the Note and any outstanding accrued interest will convert
into the Qualified Financing at a 20% discount. The Notes will be secured by a perfected security interest in the tangible assets
of the Company.
Warrants
The Warrant permits the holder to purchase shares of our common
stock equal to 100% of (i) the number of shares of the common stock that the Notes will convert into in the event of a Qualified
Financing prior to July 1, 2018 or (ii) a number of shares equal to the principal amount of the Notes divided by the weighted average
price of the Company’s securities for 20 days prior to July 1, 2018. The exercise price for the warrants will be determined
to be 120% of the per share price of the stock issued in a Qualified Financing or 120% of the weighted average price of the Company’s
common stock if a Qualified Financing has not occurred by July 1, 2018. The Exercise Price and the number of Warrant Shares
is subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications,
mergers or other corporate change and dilutive issuances.
The foregoing descriptions of the form of the Note and the form
of Warrant are qualified in their entirety by reference to the full text of such agreements, copies of which are attached hereto
as Exhibit 10.1 and 4.1, respectively, and each of which is incorporated herein in its entirety by reference.
Placement Agent Agreement
On January 29, 2018, we entered into a placement agent agreement,
dated January 29, 2018 and amended February 26, 2018 with an effective date as of the closing of the Debt Financing (the “
Placement
Agent Agreement
”) with a placement agent (the “
Placement Agent
”). The material terms
of the Placement Agent Agreement are as follows:
Upon the closing of a financing, if any, as compensation for
services provided to the Placement Agent, we agreed that we will pay the Placement Agent: (i) a cash fee equal to 7% of the
gross proceeds invested in a financing; and (ii) a warrant to purchase such number of shares of the Company’s common stock
equal to 10% of the gross proceeds of a financing. We also agreed to pay the Placement Agent reasonable expense fees.
The Placement Agent Agreement contains customary representations, warranties and covenants of the parties and indemnification and
contribution provisions under which the Company, on the one hand, and the Placement Agent, on the other hand, have agreed to indemnify
each other against certain liabilities.
As part of the close, we issued to the Placement Agent a warrant
(the “
Financing Warrant
”) pursuant to Section 4(a)(2) of the Act and Rule 506 promulgated thereunder.
The Financing Warrant is exercisable for a period of ten (10) years from the date of issuance with an exercise price to be determined
at the earlier of the Company’s completion of a $15 million qualified financing or July 1, 2018. The Financing Warrant
shall be adjusted both as to the number of shares and price to which they are exercisable, based on any splits, conversions, or
reorganizations that affect the Company’s common stock.
Financing Plans
The Debt Financing is critical to support the Company’s ongoing
operations while the Company prepares to conduct a Qualified Financing to be completed prior to the end of Q2 2018. Proceeds from
a Qualified Financing will be used to advance the Company’s key corporate goals including the following: (i) commencing a
Phase 2b study for RZ358 in Europe and the US; (ii) completing the Company’s ongoing Phase 1 study in the US for AB101; and
(iii) finalizing preclinical tasks and filing an investigational new drug application (IND) for RZ402.