Item 8.01 Other Events.
On March 17, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an investor (the “Purchaser”) providing for the private placement (the “Private Placement”) to the Purchaser of 3,244,987 units (collectively, the “Units”), each Unit consisting of (i) one share of the Company’s common stock, par value $0.001 per share (“Common Stock”) (or, in lieu thereof, one pre-funded warrant to purchase one share of Common Stock (the “Pre-Funded Warrants”)), (ii) one warrant to purchase one share of Common Stock with a term of 24 months from the issuance date (the “24-Month Common Warrant”) and (iii) one warrant to purchase one share of Common Stock with a term of 66 months from the issuance date (the “66-Month Common Warrant” and together with the 24-Month Common Warrant, the “Common Warrants” and together with the Pre-Funded Warrants, the “Warrants”), for an aggregate purchase price of approximately $7.5 million (or $2.312 per unit, less $0.001 per Pre-Funded Warrant purchased in lieu of a share of Common Stock). The closing of the Private Placement occurred on March 21, 2022 (the “Closing”).
Each Pre-Funded Warrant has an exercise price of $0.001 per share of Common Stock, is immediately exercisable, may be exercised at any time, has no expiration date and is subject to customary adjustments. The Pre-Funded Warrants may not be exercised if the aggregate number of shares of Common Stock beneficially owned by the holder thereof would exceed 9.99% immediately after exercise thereof.
Each Common Warrant has an exercise price of $2.062 per share, becomes exercisable six months following the Closing, and is subject to customary adjustments. The Common Warrants may not be exercised if the aggregate number of shares of the Common Stock beneficially owned by the holder thereof would exceed 4.99% immediately after exercise thereof, which ownership cap may be increased by the holder up to 9.99% upon 61 days’ prior notice.
The Company intends to use the net proceeds from the Private Placement for working capital and general corporate purposes.
The securities issued to the Purchaser under the Purchase Agreement were offered in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. The Company relied on this exemption from registration based in part on representations made by the Purchaser, including that the Purchaser is an “accredited investor”, as defined in Rule 501(a) promulgated under the Securities Act.
Cantor Fitzgerald & Co. served as the placement agent in connection with the Private Placement, and the Company has agreed to pay Cantor Fitzgerald & Co. a fee of approximately $0.3 million plus reimbursement for certain out-of-pocket expenses.
The sale of the securities pursuant to the Purchase Agreement has not been registered under the Securities Act or any state securities laws. The securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Neither this Current Report on Form 8-K, nor the exhibits attached hereto, is an offer to sell or the solicitation of an offer to buy the securities described herein or therein.
The Company and the Purchaser also entered into a Registration Rights Agreement, dated March 17, 2022, pursuant to which the Company has agreed to prepare and file a registration statement with the Securities and Exchange Commission no later than 10th calendar day following the date on which the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, to register the resale of the shares of Common Stock included in the Units and the shares of Common Stock issuable upon exercise of the Warrants.
The foregoing description of the Purchase Agreement, the Pre-Funded Warrants, both forms of Common Warrants and the Registration Rights Agreement is only a summary and is qualified in its entirety by reference to the full text of such documents, which are filed as Exhibits 99.2, 4.1, 4.2, 4.3 and 4.4, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
On March 18, 2022, the Company issued a press release announcing the Private Placement. A copy of such press release is filed as Exhibit 99.3 to this Current Report on Form 8-K.