TMBR Timber Pharmaceuticals Inc

On November 2, 2021, Timber Pharmaceuticals, Inc. (the “Company” or “Timber”) entered into an underwriting agreement with H.C. Wainwright & Co., LLC, as representative of the several underwriters named in Schedule I thereto (the “Representative”), relating to the public offering, issuance and sale of 21,325,000 shares of its common stock and, to certain investors, pre-funded warrants to purchase 2,112,500 shares of common stock, and accompanying warrants to purchase up to an aggregate of 23,437,500 shares of its common stock (the “Offering”). Each share of common stock and pre-funded warrant to purchase one share of common stock is being sold together with a warrant to purchase one share of common stock. All of the securities sold in the Offering were sold by the Company. The public offering price of each share of common stock and accompanying common warrant is $0.64 and $0.639 for each pre-funded warrant and accompanying common warrant. The pre-funded warrants will be immediately exercisable at a price of $0.001 per share of common stock. The warrants will be immediately exercisable at a price of $0.70 per share of common stock and will expire five years from the date of issuance. The shares of common stock and pre-funded warrants, and the accompanying warrants, will be issued separately and will be immediately separable upon issuance. The Company also granted the Representative a 30-day over-allotment option, pursuant to the underwriting agreement, to purchase an additional 3,515,625 shares of common stock and/or additional warrants to purchase 3,515,625 shares of common stock at the public offering price per share and/or per warrant less the underwriters’ discounts and commissions. The Offering is expected to close on or about November 5, 2021, subject to the satisfaction or waiver of customary closing conditions.

The Company has agreed to pay the Representative a commission of up to 6.0% of the gross proceeds raised in the underwritten offering and agreed to pay an expense allowance consisting of (a) a management fee equal to 1.0% of the gross proceeds raised in the offering, (b) $50,000 for non-accountable expenses, (c) up to $100,000 for fees and expenses of legal counsel and other out-of-pocket expenses and (d) $15,950 clearing fees. The gross proceeds to the Company, before deducting underwriting discounts and commissions and other offering expenses, are expected to be approximately $15 million. The Company anticipates using the net proceeds from the Offering for general corporate purposes, including, but not limited to, ongoing research and pre-clinical studies, clinical trials, the development of new biological and pharmaceutical technologies, investing in or acquiring companies that are synergistic with or complementary to the Company’s technologies, and licensing activities related to the Company’s current and future product candidates and working capital.

The common stock, pre-funded warrants and common warrants are being offered by the Company pursuant to the Company’s shelf registration statement on Form S-3 (Registration Statement No. 333-255743) previously filed with the Securities and Exchange Commission (the “Commission”) and declared effective by the Commission on May 11, 2021. A preliminary prospectus supplement and prospectus supplement relating to the offering have been filed with the Commission.

A copy of the legal opinion and consent of Lowenstein Sandler LLP relating to the validity of the issuance and sale of the securities in the Offering is attached as Exhibit 5.1 to this Current Report on Form 8-K.

The Underwriting Agreement contains customary representations and warranties, agreements and obligations, conditions to closing and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. The Underwriting Agreement provides for indemnification by the Representative of the Company, its directors and certain of its executive officers, and by the Company of the Representative, for certain liabilities, including liabilities arising under the Securities Act of 1933, as amended, and affords certain rights of contribution with respect thereto.

The foregoing descriptions of the Underwriting Agreement, the Pre-Funded Warrants and the Warrants are qualified in their entirety by reference to the Underwriting Agreement, the form of Pre-Funded Warrant and the form of Warrant, each of which are attached as Exhibits 1.1, 4.1 and 4.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.