Item
1.01 Entry into a Material Definitive Agreement.
On
June 7, 2019 (the “
Execution Date
”), Anavex Life Sciences Corp. (the “
Company
”) entered
into a purchase agreement (the “
2019 Purchase Agreement
”) and a registration rights agreement (the “
RRA
”)
with Lincoln Park Capital Fund, LLC (“
LPC
”), an Illinois limited liability company, which will succeed the
Company’s purchase agreement with Lincoln Park dated October 21, 2015 (the “
2015 Purchase Agreement
”).
The Company is still able to make purchases under the 2015 Purchase Agreement until its termination pursuant to the terms thereof;
however, upon the satisfaction of the conditions to the Company’s right to commence sales under the 2019 Purchase Agreement,
the Company has the right, in its sole discretion, to sell to LPC up to $50,000,000 in shares of the Company’s common stock,
par value $0.001 per share (“
Common Stock
”) from time to time over a 36 month period pursuant to the terms
of the 2019 Purchase Agreement. On any business day and subject to certain customary conditions, the Company may direct LPC to
purchase up to 200,000 shares of Common Stock (such purchases, “
Regular Purchases
”). The amount of a Regular
Purchase may increase under certain circumstances based on the market price of the Common Stock; provided, however, that LPC’s
committed obligation under any Regular Purchase shall not exceed $2,000,000. The Company and LPC may also mutually agree to increase
the amount of shares to be purchased in a Regular Purchase to up to 1,000,000 shares and to make multiple Regular Purchases in
a given day. The purchase price of shares of Common Stock will be based on the then prevailing market prices of such shares at
the time of sales as described in the 2019 Purchase Agreement. There are no limits on the price per share that LPC may pay to
purchase Common Stock under the 2019 Purchase Agreement. In addition, if the Company has directed LPC to purchase the full amount
of Common Stock available as a Regular Purchase on a given day, it may direct LPC to purchase additional amounts as “accelerated
purchases” and “additional accelerated purchases” as set forth in the 2019 Purchase Agreement.
The 2019 Purchase
Agreement limits the Company’s sale shares of Common Stock to LPC to 10,076,680 shares of Common Stock, representing 19.99%
of the shares of the Common Stock outstanding on the date of the 2019 Purchase Agreement unless (i) shareholder approval is
obtained to issue more than such amount or (ii) the average price of all applicable sales of Common Stock to Lincoln Park
under the 2019 Purchase Agreement equals or exceeds the lower of (A) the closing price of the Common Stock on the Nasdaq Capital
Market immediately preceding the Execution Date or (B) the average of the closing price of the Common Stock on the Nasdaq Capital
Market for the five Business Days immediately preceding the Execution Date.
The 2019 Purchase
Agreement also prohibits the Company from directing Lincoln Park to purchase any shares of Common Stock if those shares, when aggregated
with all other shares of Common Stock then beneficially owned by Lincoln Park and its affiliates, would result in Lincoln Park
and its affiliates having beneficial ownership, at any single point in time, of more than 4.99% of the then total outstanding shares
of Common Stock, as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3
thereunder.
The
2019 Purchase Agreement contains customary representations, warranties, covenants, closing conditions and indemnification and termination
provisions by, among and for the benefit of the parties. LPC has covenanted not to cause or engage in any manner whatsoever, any
direct or indirect short selling or hedging of the Company’s Common Stock. The 2019 Purchase Agreement does not limit the
Company’s ability to raise capital from other sources at its sole discretion; provided, however, that the Company shall not
enter into any “Variable Rate Transaction” as defined in the 2019 Purchase Agreement, including the issuance of any
floating conversion rate or variable priced equity-like securities, but excluding any “At-the-Market” offering with
a registered broker-dealer, during the 36 month term of the 2019 Purchase Agreement.
In
consideration for entering into the 2019 Purchase Agreement, the Company issued to LPC 324,383 shares of Common Stock as a commitment
fee and shall issue up to 162,191 shares pro rata, when and if LPC purchases, at the Company’s sole discretion, the $50,000,000
Million aggregate commitment. The 2019 Purchase Agreement may be terminated by the Company at any time at its discretion without
any cost to the Company.
The
Offering is being made pursuant to the Company’s effective shelf registration statement on Form S-3 (SEC File No. 333-207600)
(the “
Registration Statement
”), which was declared effective by the Securities and Exchange Commission on September
6, 2016, and pursuant to a prospectus supplement dated June 12, 2019. Pursuant to the RRA, if the Registration Statement is no
longer available for sales under the 2019 Purchase Agreement, the Company will be required to file an additional registration
statement.
The
Company intends to use the proceeds from the 2019 Purchase Agreement for general corporate purposes, including for working capital,
capital expenditures and for funding additional clinical and preclinical development of the Company’s pipeline candidates.
The
foregoing descriptions of the 2019 Purchase Agreement and the RRA are qualified in their entirety by reference to the full text
of the 2019 Purchase Agreement and the RRA, a copy of each of which is attached hereto as
Exhibit 10.1
and
10.2
,
respectively, and each of which is incorporated herein in its entirety by reference.
The
Company is filing the opinion of Snell & Wilmer, L.L.P., regarding the validity of the shares of Common Stock issued pursuant
to the 2019 Purchase Agreement, as
Exhibit 5.1
hereto.