|
Item
1.01
|
Entry
into a Material Definitive Agreement.
|
On
September 25, 2019, Citius Pharmaceuticals, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting
Agreement”) with H.C. Wainwright & Co., LLC (the “Underwriter”), relating to an underwritten at-the-market
offering (the “Offering”) of (i) 6,760,615 units (“Units”), with each Unit being comprised of one share
of the Company’s common stock, par value $0.001 per share (the “Shares”), and one warrant (the “Warrants”)
to purchase one Share and (ii) 1,060,615 pre-funded units (the “Pre-Funded Units”), with each Pre-Funded Unit being
comprised of one pre-funded warrant (the “Pre-Funded Warrants”) to purchase one Share and one Warrant, which closed
on September 27, 2019.
The
offering price was $0.8951 per Unit and $0.895 per Pre-Funded Unit.
The
Warrants included in the Units and the Pre-Funded Units are immediately exercisable at a price of $0.77 per Share, subject to
adjustment in certain circumstances, and expire five years from the date of issuance. The Shares, or Pre-Funded Warrants in the
case of the Pre-Funded Units, and the Warrants were offered together, but the securities contained in the Units and the Pre-Funded
Units were issued separately.
The
Pre-Funded Units were offered and sold to purchasers whose purchase of Units in the Offering would otherwise result in the purchaser,
together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser,
9.99%) of the Company’s outstanding common stock immediately following the consummation of the Offering. Each Pre-Funded
Warrant contained in a Pre-Funded Unit is exercisable for one Share at an exercise price of $0.0001 per Pre-Funded Warrant. The
Pre-Funded Warrants are immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised
in full.
The
Underwriting Agreement contains customary representations and warranties, agreements and obligations, conditions to closing and
termination provisions. The Underwriting Agreement provides for indemnification by the Underwriter of the Company, its directors
and certain of its executive officers, and by the Company of the Underwriter, for certain liabilities, including liabilities arising
under the Securities Act of 1933, as amended, and affords certain rights of contribution with respect thereto.
The
net proceeds to the Company from the Offering is approximately $6.1 million, including proceeds of $0.0001 per Pre-Funded Warrant
from the assumed exercise of all of the Pre-Funded Warrants sold in this Offering and excluding the proceeds, if any, from the
exercise of the Warrants sold in this Offering, and after deducting underwriting discounts and commissions and payment of other
estimated expenses associated with the Offering that are payable by the Company. The Company intends to use the net proceeds of
the Offering for general corporate purposes, including its Phase 3 clinical Mino-Lok trial for the treatment of catheter related
bloodstream infections, the investigational new drug (IND) regulatory pathway for Mino-Wrap and its Phase 2b clinical trial of
Halo-Lido cream for the treatment of hemorrhoids, and working capital and capital expenditures.
Pursuant
to the Underwriting Agreement, the Company, upon closing of the Offering, issued to the Underwriter warrants to purchase up to
574,486 shares (the “Underwriter Warrants”), which is 7.0% of the aggregate number of Shares and Shares issuable upon
exercise of the Pre-Funded Warrants sold in the Offering. The Underwriter Warrants are exercisable at any time and from time to
time, in whole or in part, commencing from the effective date of the Offering and ending five years from effective date of the
Offering, at a price per share equal to $1.118875, which is 125% of the offering price per Unit.
A
registration statement on Form S-1 relating to the Offering (File No. 333-233759) was declared effective by the Securities and
Exchange Commission on September 24, 2019. The Offering was made only by means of a prospectus forming a part of the effective
registration statement.
The
foregoing descriptions of the Underwriting Agreement, the Warrants, the Pre-Funded Warrants and the Underwriter Warrants are not
complete and are qualified in their entirety by reference to the full text of the Underwriting Agreement and the forms of the
Warrant, the Pre-Funded Warrant and the Underwriter Warrant, copies of which are filed as Exhibit 1.1, Exhibit 4.1, Exhibit 4.2
and Exhibit 4.3, respectively, and incorporated by reference herein.