Item 1.01.
Entry into a Material Definitive Agreement.
On June 21, 2018, InVivo Therapeutics Holdings Corp. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Ladenburg Thalmann & Co. Inc. (the “Representative”), as representative of the sole underwriter, relating to the public offering (the “Offering”) of (i) 388,403 shares of common stock, $.00001 par value per share, of the Company (the “Shares”), (ii) Series B warrants (the “Series B Warrants”) exercisable for an aggregate of 6,242,811 shares of common stock and (iii) Series A Warrants (the “Series A Warrants” and collectively with the Series B Warrants, the “Warrants”) exercisable for an aggregate of 6,631,214 shares of common stock.
The Series A Warrants will be immediately exercisable at a price of $2.00 per share of common stock, subject to adjustment in certain circumstances, and will expire five years from the date of issuance. The Series B Warrants will be immediately exercisable at a price of $0.01 per share of common stock, subject to adjustment in certain circumstances, and will expire twenty years from the date of issuance subject to certain conditions. The Shares and Series B Warrants were each offered together with the Series A Warrants, but the Shares and Warrants will be issued separately.
The offering price to the public is $2.00 per Share and Series A Warrant and $1.99 per Series B Warrant and Series A Warrant.
The Series B Warrants will be issued and sold to purchasers whose purchase of shares of common stock in the Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of the Company’s outstanding common stock immediately following the consummation of this Offering, if the purchaser so chooses in lieu of shares of common stock that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% of the Company’s outstanding common stock (or at the election of the purchaser, 9.99%).
In addition, the Company has granted the Representative a 45-day option
to purchase, in the aggregate, up to 989,997 shares of common stock and Series A Warrants to purchase up to 989,997 shares of Common Stock solely to cover over-allotments, if any.
The Shares and Warrants will be issued pursuant to a registration statement on Form S-1 that was filed with the Securities and Exchange Commission (“SEC”) on April 24, 2018 and declared effective by the SEC on June 20, 2018 (File No. 333-224424), and an additional registration statement filed pursuant to Rule 462(b) (File No. 333-
225768), which became effective when filed.
The closing of the Offering is subject to the satisfaction of customary closing conditions set forth in the Underwriting Agreement and is expected to occur on or about June 25, 2018. The Underwriting Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature. Pursuant to the Underwriting Agreement, the Company and its directors and officers agreed, subject to certain exceptions, not to offer, issue or sell any shares of common stock or securities convertible into or exercisable or exchangeable for shares of common stock for a period of ninety (90) days following June 21, 2018 without the prior written consent of Representative.
The net proceeds to the Company from the Offering are expected to be approximately $11.7 million, after deducting the underwriting discount and commissions and estimated offering expenses payable by the Company and excluding any proceeds that may be received from exercise of the Warrants. The Company intends to use the net proceeds from the Offering for initiation of a new clinical study of its Neuro-Spinal Scaffold implant or for other business development activities, as well as for working capital and general corporate purposes.
The foregoing descriptions of the Underwriting Agreement, the Series A Warrants and the Series B Warrants are not complete and are qualified in their entirety by reference to the full text of the Underwriting Agreement, the Series A Warrant and the Series B Warrant, copies of which are filed as Exhibit 1.1, Exhibit 4.5 and Exhibit 4.6 respectively, and incorporated by reference herein.
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