| Item 1.01 |
Entry into a Material Definitive Agreement. |
On February 24, 2022, Baudax Bio, Inc. (the “Company”), entered into an Underwriting Agreement (the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC, as sole underwriter (the “Underwriter”). Pursuant to the Underwriting Agreement, the Company agreed to sell, in a firm commitment public offering (the “Offering”), an aggregate of (i) 1,831,631 shares of its common stock, par value $0.01 per share (the “Common Stock”), (ii) pre-funded warrants exercisable for an aggregate of 1,677,141 shares of Common Stock (the “Pre-Funded Warrants”) and (iii) warrants exercisable for an aggregate of 3,508,772 shares of Common Stock (the “Investor Warrants”), as well as up to 526,315 additional shares of Common Stock and/or additional Investor Warrants to purchase up to an aggregate of 526,315 shares of Common Stock that may be purchased pursuant to a 30-day option to purchase additional securities granted to the Underwriter by the Company. The public offering price for each share of Common Stock and accompanying Investor Warrant to purchase one share of Common Stock is $2.85, and the public offering price for each Pre-Funded Warrant and accompanying Investor Warrant is $2.84. On February 28, 2022, the Underwriter partially exercised its option to purchase an additional 113,896 Investor Warrants.
The Offering, including the additional Investor Warrants sold pursuant to the partial exercise of the Underwriter’s option, is expected to close on March 1, 2022.
The net proceeds from the Offering, including the additional Investor Warrants and shares of Common Stock sold pursuant to the partial exercise of the Underwriter’s option, and after deducting underwriting discounts and commissions and other estimated Offering expenses payable by the Company and excluding the net proceeds, if any, from the exercise of the Investor Warrants, are approximately $8.8 million (or $10.2 million if the Underwriter exercises its option to purchase additional shares of Common Stock and/or Investor Warrants in full). The Company intends to use the net proceeds from the Offering for the commercialization of ANJESO, pipeline development activities, and general corporate purposes.
The Underwriting Agreement contains customary representations, warranties, covenants and closing conditions and customary indemnification rights and obligations of the parties. Pursuant to the Underwriting Agreement, the Company has also agreed to be subject to a lock-up period of 60 days following the date of the Underwriting Agreement in respect of certain equity issuances and a one year lock-up period in respect of certain issuances of securities that are subject to a price reset based on the trading prices of the Company’s Common Stock or upon a specified or contingent event in the future, in each case subject to certain exceptions set forth in the Underwriting Agreement.
Pursuant to the Underwriting Agreement, the Company agreed to pay the Underwriter a cash fee equal to 7.0% of the gross proceeds received in the Offering and a cash management fee equal to 1.0% of the gross proceeds received in the Offering and to issue to the Underwriter (or its designees) Underwriter Warrants (as described below). The Company also agreed to reimburse the Underwriter for certain expenses.
The Underwriting Agreement is filed as Exhibit 1.1 hereto and incorporated by reference into this Current Report on Form 8-K, and the foregoing description of the terms of the Underwriting Agreement is qualified in its entirety by reference to the full text of such exhibit.
Investor Warrants
Each Investor Warrant has an initial exercise price per share equal to $3.25. The Investor Warrants are immediately exercisable and may be exercised at any time until the five year anniversary of the original issuance date. The exercise price and number of shares of Common Stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Common Stock and the exercise price.