Item
1.01. Entry into a Material Definitive Agreement
On
February 19, 2021, 180 Life Sciences Corp. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with the purchasers identified on the signature pages thereto (the “Purchasers”) pursuant to which
the Company agreed to sell to the Purchasers an aggregate of 2,564,000 shares (the “Shares”) of the common stock,
par value $0.0001 per share, of the Company (“Common Stock”), and warrants to purchase up to an aggregate of 2,564,000
shares of Common Stock (the “Warrants”), at a combined purchase price of $4.55 per Share and accompanying Warrant
(the “Offering”). Aggregate gross proceeds from the Offering are expected to be approximately $11.7 million, prior
to deducting placement agent fees and estimated offering expenses payable by the Company. Net proceeds to the Company from the
Offering, after deducting the placement agent fees and estimated offering expenses payable by the Company, are expected to be
approximately $10.8 million. The Offering closed on February 23, 2021.
The
terms of the Warrants are as set forth in the form of Warrant attached as Exhibit 4.1 to this Current Report on Form 8-K. The
Warrants will have an exercise price equal to $5.00, will be immediately exercisable and will be subject to customary anti-dilution
adjustments for stock splits or dividends or other similar transactions. However, the exercise price of the Warrants will not
be subject to adjustment as a result of subsequent equity issuances at effective prices lower than the then-current exercise price.
The Warrants will be exercisable for 5 years following the closing date. The Warrants are subject to a provision prohibiting the
exercise of such Warrants to the extent that, after giving effect to such exercise, the holder of such Warrant (together with
the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates),
would beneficially own in excess of 4.99% of the outstanding Common Stock (which may be increased to 9.99% on a holder by holder
basis, with 61 days prior written consent of the applicable holder).
In
connection with the Offering, the Company also entered into a Registration Rights Agreement, dated as of February 23, 2021, with
the Purchasers (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company agreed
to file a registration statement with the Securities and Exchange Commission (the “SEC”) on or prior to April 24,
2021 to register the resale of the Shares and the shares of Common Stock issuable upon exercise of the Warrants (the “Warrant
Shares”), and to cause such registration statement to be declared effective on or prior to June 23, 2021 (or, in the event
of a “full review” by the SEC, August 22, 2021).
The
Company agreed in the Purchase Agreement that, until the earlier of (1) thirty (30) days after the date on which the registration
statement that is filed pursuant to the Registration Rights Agreement to register the resale by the Purchasers of the Shares and
the Warrant Shares is declared effective by the SEC (such date, the Effective Date”) and (2) thirty (30) days after such
date that the Shares may be sold without limitation pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities
Act”), neither the Company nor any subsidiary thereof would (i) issue, enter into any agreement to issue or announce the
issuance or proposed issuance of any shares of Common Stock (or Common Stock equivalents) or (ii) file any registration statement
or any amendment or supplement thereto, in each case other than (A) as contemplated pursuant to the Registration Rights Agreement
and (B) as contemplated by that certain Registration Rights Agreement, dated June 12, 2020, by and between the Company and the
parties signatory thereto.
Each
of the directors and executive officers of the Company has entered into a lock-up agreement with the Company in connection with
the Offering (each, a “Lock-Up Agreement”). Under the Lock-Up Agreements, from the date of the lock-up agreements
until the earlier of (x) sixty (60) days after the Effective Date and (y) November 6, 2021, the directors and executive officers
will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the director or executive officer), directly or indirectly, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, with respect to, any shares of Common Stock or securities convertible, exchangeable or exercisable
into, shares of Common Stock, subject to limited exceptions.
Maxim
Group LLC (the “Placement Agent”) acted as exclusive placement agent in connection with the Offering pursuant to an
Engagement Letter between the Company and the Placement Agent dated January 26, 2021 (together with the amendment letter dated
February 18, 2021 (such amendment letter, the “Amendment Letter”), the “Engagement Letter”). The Engagement
Letter provides, among other things, that the Placement Agent will receive a commission equal to seven percent (7%) of the aggregate
gross proceeds of the Offering.
The
Engagement Letter and the Purchase Agreement contain customary representations and warranties, agreements and obligations, conditions
to closing and termination provisions. The representations, warranties and covenants contained in the Engagement Letter and the
Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the
parties to the Engagement Letter and the Purchase Agreement, and may be subject to limitations agreed upon by the contracting
parties.
The
foregoing summaries of the material terms of the Purchase Agreement, the Engagement Letter, the Amendment Letter, the Registration
Rights Agreement, the form of Lock-Up Agreement and the form of Warrant are not complete and are qualified in their entirety by
reference to the full text thereof, copies of which are filed herewith as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 4.1, respectively,
and incorporated by reference herein.