Item 3.02 Unregistered Sales of Equity
Securities.
January 2021 Offerings
As
previously reported in the Prior 8-Ks (as defined below), on
January 6, 2021, AzurRx BioPharma, Inc. (the “Company”)
consummated the sale and issuance, in a concurrent registered
direct offering and private placement (the “Offerings”)
to a single accredited investor (the “Investor”), of
(i) an aggregate of 10,666.6666 shares of its Series C 9.00%
Convertible Junior Preferred stock, par value $0.0001 per share
(the “Series C Preferred Stock”), which were initially
convertible into an aggregate of 10,666,668 shares of its common
stock, par value $0.0001 per share (the “Common
Stock”), at an initial stated value of $750.00 per share and
an initial conversion price of $0.75 per share, together with (ii)
warrants to purchase up to an aggregate of 10,666,668 shares of
Common Stock (the “Investor Warrants”), at an initial
exercise price of $0.80 per share and an expiration term through
July 6, 2026. The aggregate purchase price in such offerings was
$750.00 per share of Series C Preferred Stock and related Investor
Warrants. In the Offerings, 5,333.3333 shares of Series C
Preferred Stock were issued in the registered direct offering, and
5,333.3333 shares of Series C Preferred Stock and all of the
Investor Warrants were issued in the concurrent private
placement.
In
addition, on January 8, 2021, the Company issued to First Wave Bio,
Inc. (“First Wave”) 3,290.1960 shares of Series C
Preferred Stock, which were initially convertible into an aggregate
of 3,290,196 shares of Common Stock, as part of the consideration
for entering into the License Agreement, dated as of December 31,
2020, between First Wave and the Company.
Pursuant to the
terms of the Series C Preferred Stock and the Investor Warrants,
the foregoing shares of Series C Preferred Stock issued to the
Investor and to First Wave were not convertible in excess of
certain specified thresholds, and the related Investor Warrants
were not exercisable at all, until the Company obtained certain
stockholder approvals. As a result of the approval of Proposals 1
and 2 (the “Stockholder Approvals”) reported in Item
5.07 below, all of the foregoing shares of Series C Preferred
Stock, and all of the related Investor Warrants, have now become
convertible or exercisable, as the case may be, into shares of
Common Stock without limitation.
The
Investor previously requested the conversion of shares of Series C
Preferred Stock into the maximum issuable amount of 6,186,966
shares of Common Stock. On February 24, 2021, the Company elected
to convert the remaining balance of such shares of Series C
Preferred Stock, including accrued and unpaid dividends thereon, in
full into 4,539,863 additional shares of Common Stock for the
account of the Investor and 3,329,138 shares of Common Stock for
the account of First Wave. Accordingly, the shares of Series C
Preferred Stock issued to the Investor and to First Wave are no
longer outstanding.
The
terms and conditions of the Offerings and of the Series C Preferred
Stock and the Investor Warrants were previously disclosed in the
Company’s Current Reports on Form 8-K filed January 5, 2021
and January 8, 2021 (the “Prior 8-Ks”), which are
incorporated herein by reference.
Series B Exchange Rights
As
previously reported in the Prior 8-Ks, the Company previously
issued certain shares of Series B Convertible Preferred Stock, par
value $0.0001 per share (the “Series B Preferred
Stock”), which carry a right to exchange the stated value,
plus accrued and unpaid dividends thereon, of the Series B
Preferred Stock (the “Exchange Amount”) for any
securities issued in a Subsequent Financing (as defined in the
Series B Certificate of Designations), on a dollar-for-dollar
basis, in lieu of any cash subscription payments therefor (the
“Series B Exchange Rights”). As a result of the
Offerings, pursuant to the Series B Exchange Rights, the Company
became obligated to issue additional shares of Series C Preferred
Stock and additional Investor Warrants to any holders of Series B
Preferred Stock who elect to exercise their Series B Exchange
Rights.
Pursuant to the
terms of the Series C Preferred Stock and the Investor Warrants,
the foregoing shares of Series C Preferred Stock were not to be
convertible in excess of certain previously approved thresholds,
and the related Investor Warrants were not to be exercisable at
all, until the Company obtained certain stockholder approvals. As a
result of the Stockholder Approvals reported in Item 5.07 below,
all of the foregoing shares of Series C Preferred Stock, and all of
the related Investor Warrants, issued or issuable in respect of the
Series B Exchange Right have now become, or upon issuance will be,
convertible or exercisable, as the case may be, into shares of
Common Stock without limitation.
As of February 24,
2021, holders of 1,055.554085 shares
of Series B Preferred Stock with an aggregate Exchange Amount of
approximately $8.2 million had
previously elected to exercise their Series B Exchange Rights into
Series C Preferred Stock, convertible into an aggregate of
10,905,306 shares of
Common Stock (which conversion the Company has elected to make in
full), and additional Investor Warrants exercisable for up to an
aggregate of 10,903,168 shares of
Common Stock. In addition, as of February 24, 2021, 1,466.753351 shares
of Series B Preferred Stock with an aggregate Exchange Amount of
approximately $11.4 million
currently remain outstanding, which are currently exchangeable for
Series C Preferred Stock convertible into an aggregate of up to
15,244,628 shares of
Common Stock and additional Investor Warrants exercisable for up to
an aggregate of 15,244,628 shares of
Common Stock.
The
further terms and conditions applicable to the Series B Exchange
Rights were previously disclosed in the Prior 8-Ks, which are
incorporated herein by reference.
Placement Agent Warrants
As
previously reported in the Prior 8-Ks, as part of its compensation
to in connection with the Offerings described above, the Company
previously issued to the placement agent or its designees certain
warrants to purchase up to 746,667 shares of Common Stock at an
initial exercise price of $0.9375 per share. Other than the
exercise price, the terms of the Placement Agent Warrants were
substantially the same as the Investor Warrants. As a result of the
Stockholder Approval reported in Item 5.07 below, all of the
Placement Agent Warrants have now become exercisable into shares of
Common Stock without limitation.