Item
1.01. | Entry
into a Material Definitive Agreement. |
On
August 12, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with those
institutional accredited investors identified on the signature page thereto (the “Purchasers”) pursuant to which the Company
offered for sale to the Purchasers an aggregate of 5,164,474 shares (the “Shares”) of its common stock, par value
$0.001 per share (the “Common Stock”), in a registered direct offering (the “Registered Direct Offering”). The
Shares were offered by the Company pursuant to its shelf registration statement on Form S-3 (File No. 333-237455) originally filed with
the Securities and Exchange Commission (the “Commission”) on March 27, 2020 (as amended, the “Registration Statement”),
and declared effective on April 3, 2020. Concurrently with the Registered Direct Offering and pursuant to the Securities Purchase Agreement,
the Company also commenced a private placement (the “Private Placement”) whereby it issued and sold Series 1 warrants to
purchase up to 5,164,474 shares of Common Stock (the “Series 1 Warrants”) and Series 2 warrants to purchase up to
5,164,474 shares of Common Stock (the “Series 2 Warrants,” collectively, with the Series 1 Warrants, the “Warrants”).
A copy of the press release announcing the consummation of the Registered Direct Offering and the Private Placement is attached
hereto as Exhibit 99.1.
The
purchase price for one Share in the Registered Direct Offering was $0.76, and closing of the Registered Direct Offering is expected
to occur on or about August 16, 2022. The Company expects the gross proceeds from the Registered Direct Offering to be approximately
$3.9 million. Assuming all of the Warrants are exercised for cash, the Company expects the gross proceeds from the Private Placement
to be approximately $9.8 million. The Company intends to use the gross proceeds for working
capital and other general corporate purposes, including financing the costs of implementing our strategic alternatives activities.
Pursuant
to the Private Placement, the Series 1 Warrants will become exercisable on the date that is six months following the issuance of the
Shares sold in the Registered Direct Offering (the “Exercise Date”) at an exercise price of $0.95 per share,
subject to adjustment. Each Series 2 Warrant will become exercisable on the Exercise Date at an exercise price of $0.95 per share,
subject to adjustment. The Warrants and the shares of Common Stock issuable upon the exercise of such Warrants (the “Warrant Shares”)
are not being registered under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to the shelf registration
statement on Form S-3 and are instead being offered in the Private Placement in reliance upon an exemption from the registration requirements
of the Securities Act as provided in Section 4(a)(2) under the Securities Act and Rule 506 promulgated thereunder. The Warrants are not
and will not be listed for trading on any national securities exchange. The Company has agreed to register the Warrant Shares under the
Securities Act at a later time. Each purchaser will be an “accredited investor,” as such term is defined in Rule 501(a) under
the Securities Act.
The
Securities Purchase Agreement contains customary representations, warranties and agreements by the Company and customary conditions to
closing.
The
foregoing summaries of the offering, the securities to be issued in connection therewith, the Securities Purchase Agreement and the Warrants
do not purport to be complete and are qualified in their entirety by reference to the definitive transaction documents. Copies of the
forms of Warrants and the Securities Purchase Agreement are attached hereto as Exhibits 4.1, 4.2 and 10.1 respectively, and are incorporated
herein by reference.
The
representations, warranties and covenants contained in the Securities 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 Securities Purchase Agreement and may be subject to limitations
agreed upon by the contracting parties. Accordingly, the Securities Purchase Agreement is incorporated herein by reference only to provide
investors with information regarding the terms of the Securities Purchase Agreement and not to provide investors with any other factual
information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic
reports and other filings with the Commission.
The
legal opinion, including the related consent, of Olshan Frome Wolosky LLP relating to the issuance and sale of the Shares is filed as
Exhibit 5.1 hereto.
In
connection with the Registered Direct Offering, the Company entered into a Placement Agency Agreement with Joseph Gunnar & Co., LLC
(the “Placement Agent”), pursuant to which the Company will pay an aggregate cash fee of $314,000 to the Placement
Agent. The Company will also reimburse the Placement Agent for up to $40,000 of expenses incurred by them in connection with the Registered
Direct Offering. The foregoing summary of the Placement Agency Agreement does not purport to be complete and is qualified in its entirety
by reference to the form of Placement Agency Agreement, a copy of which is attached hereto as Exhibit 10.2.
This
Current Report on Form 8-K does not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale
of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration
or qualification under the securities laws of any such state or jurisdiction.
Forward-Looking
Statements
This
Current Report on Form 8-K contains forward-looking statements that involve risks and uncertainties, such as statements related to the
amount of proceeds expected from the Registered Direct Offering. The risks and uncertainties involved include the Company’s financial
position, market conditions and other risks detailed from time to time in the Company’s periodic reports and other filings with
the Commission. You are cautioned not to place undue reliance on forward-looking statements, which are based on the Company’s current
expectations and assumptions and speak only as of the date of this Current Report on Form 8-K. The Company does not intend to revise
or update any forward-looking statement in this Current Report on Form 8-K as a result of new information, future events or otherwise,
except as required by U.S. federal securities law.