| Item 1.01 |
Entry into a Material Definitive Agreement. |
The Offering
On November 20, 2022, First
Wave BioPharma, Inc., a Delaware corporation (the “Company”), entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with a single institutional investor (the “Purchaser”), pursuant to which the Company agreed to issue, in
a private placement (the “Offering”), an aggregate of (i) pre-funded warrants (the “Pre-Funded Warrants”) to purchase
up to an aggregate of 4,166,667 shares (the “Pre-Funded Warrant Shares”) of the Company’s common stock, par value $0.0001
per share (the “Common Stock”), and (ii) common warrants (the “Common Warrants” and collectively with the Pre-Funded
Warrants, the “Warrants”), to purchase up to an aggregate of 8,333,334 shares of Common Stock (the “Common Warrant Shares”
and collectively with the Pre-Funded Warrant Shares, the “Warrant Shares”) at a purchase price of $0.5999 per Pre-Funded Warrant
and accompanying Common Warrant.
The Offering is expected to
close on November 22, 2022, subject to the satisfaction of customary closing conditions.
The issuance of the Pre-Funded
Warrant Shares in excess of 19.99% of the shares of Common Stock outstanding prior to the Offering and the issuance of the Common Warrant
Shares are subject to stockholder approval under Nasdaq rules (the “Stockholder Approval”). The Pre-Funded Warrants have an
exercise price of $0.0001 per share, are exercisable immediately upon issuance (subject to the limitation described above) and will expire
when exercised in full. The Common Warrants have an exercise price of $0.7685 per share, will be exercisable upon Stockholder Approval
and will expire five and one-half years from the initial exercise date.
The Purchase Agreement contained
customary representations and warranties and agreements of the Company and the Purchaser and customary indemnification rights and obligations
of the parties.
As compensation to H.C. Wainwright
& Co., LLC (the “Placement Agent”), as the exclusive placement agent in connection with the Offering, the Company agreed
to pay the Placement Agent a cash fee of approximately $175,000 (equal to 7.0% of the aggregate gross proceeds raised in the Offering)
and payment of certain expenses and legal fees.
The Company expects to receive
gross proceeds of approximately $2.5 million from the Offering, before deducting the Placement Agent fees and other Offering expenses.
The Company intends to use the net proceeds from the Offering for working capital purposes.
In connection with the Offering,
on November 20, 2022, the Company and the Purchaser entered into a Registration Rights Agreement (the “Registration Rights Agreement”)
pursuant to which the Company is required to file a registration statement with the Securities and Exchange Commission (the “SEC”)
to register for resale the Warrant Shares. Under the terms of the Registration Rights Agreement, the Company is obligated to file a registration
statement covering the Warrant Shares with the Securities and Exchange Commission (the “SEC”) on or before December 5, 2022
and to use its commercially reasonable efforts to cause the registration statement to be declared effective by the SEC by January 4, 2023.
The Purchase Agreement, the
Registration Rights Agreement and the forms of Pre-Funded Warrant and Common Warrant are attached as Exhibits 10.1, 10.2, 4.1 and 4.2
hereto, respectively. The description of the terms of the Purchase Agreement, the Registration Rights Agreement, the Pre-Funded Warrant
and the Common Warrant is not intended to be complete and is qualified in its entirety by reference to such exhibits.
Warrant Amendment
In connection with the Offering,
the Company entered into a warrant amendment agreement (the “Warrant Amendment Agreement”) with the Purchaser pursuant to
which the Company agreed to amend the Purchaser’s existing warrants to purchase up to 3,736,990 shares of Common Stock at a weighted
average exercise price of $4.21 per share (the “Existing Warrants”), in consideration for such Purchaser’s purchase
of $2.5 million of securities in the Offering (the “Purchase Commitment”), to (i) lower the exercise price of the Existing
Warrants to $0.7685 per share and (ii) extend the termination date of the Existing Warrants until the five and one-half year anniversary
of the Stockholder Approval (the “Warrant Amendment”), effective upon the consummation of the Offering and confirmation by
the Placement Agent that the Purchaser has satisfied the Purchase Commitment. The Warrant Amendment will be effective upon the date of
Stockholder Approval and the satisfaction of the other terms specified in the Warrant Amendment Agreement.
The form of the Warrant Amendment
Agreement is attached as Exhibit 4.3 hereto. The foregoing summary of the terms of the Warrant Amendment Agreement is subject to, and
qualified in its entirety by, the form of such document, which is incorporated herein by reference.
On November 20, 2022, the
Company issued a press release disclosing the Offering, a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K.
Neither the disclosures in
this Form 8-K nor the press release shall constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall
there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state or jurisdiction.