Item 1.01.
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Entry into a Material Definitive Agreement.
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On June 30, 2020, Iterum Therapeutics plc (the Company) entered into a securities purchase agreement (the Securities Purchase
Agreement) with certain institutional investors (the Purchasers) pursuant to which the Company agreed to issue and sell in a registered direct offering an aggregate of 3,372,686 ordinary shares (the Shares), $0.01
nominal value per share, at a purchase price per share of $1.4825 (the Shares), for aggregate gross proceeds to the Company of approximately $5.0 million, before deducting fees payable to the placement agent and other estimated
offering expenses payable by the Company (the Registered Offering). The Shares are being offered by the Company pursuant to a shelf registration statement on Form S-3, which was declared effective
by the Securities and Exchange Commission (the SEC) on July 16, 2019 (File No. 333-232569) (the Registration Statement), and a prospectus supplement thereunder.
Pursuant to the Securities Purchase Agreement, in a concurrent private placement, the Company has also agreed to issue and sell to the Purchasers warrants
(the Warrants) to purchase up to 1,686,343 ordinary shares (the Private Placement and together with the Registered Offering, the Offerings). The Warrants will be exercisable immediately at an exercise price of
$1.42 per ordinary share, subject to adjustment in certain circumstances, and will expire on January 2, 2026. The Offerings are expected to close on or about July 2, 2020, subject to customary closing conditions.
The Warrants and the ordinary shares issuable upon exercise of the Warrants (the Warrant Shares) have not been registered under the Securities Act
of 1933, as amended (the Securities Act), pursuant to the Registration Statement and were instead offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder.
The Company has agreed to pay H.C. Wainwright & Co., LLC (Wainwright) a cash fee of approximately $350,000, which represents 7.0% of the
gross proceeds of the Offerings. The Company will also reimburse Wainwrights reasonable and documented expenses in connection with the Offerings, including fees and expenses of outside counsel, in the amount of up to $90,000 and
Wainwrights clearing expenses in the amount of up to $12,900. In addition, Wainwright, or its designees, will also receive placement agent warrants (the Placement Agent Warrants) to purchase a number of ordinary shares equal to
7.0% of the aggregate number of Shares sold to the Purchasers (the Placement Agent Warrant Shares). The Placement Agent Warrants generally will have the same terms as the Warrants, except they will have an exercise price of $1.8531 and
will expire on June 30, 2025.
The Securities Purchase Agreement contains customary representations, warranties and agreements by the Company,
customary conditions to closing, indemnification obligations of the Company, including for liabilities arising under the Securities Act, other obligations of the parties and termination provisions. The representations, warranties and covenants
contained in the Securities Purchase Agreement were made only for the purposes of such agreement and as of the specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the
contracting parties.
Pursuant to the Securities Purchase Agreement, the Company has agreed to use commercially reasonable efforts to file a registration
statement as soon as practicable (and in any event within 45 calendar days of the date of the Securities Purchase Agreement), providing for the resale of Warrant Shares by the Purchasers of the Warrants in the Private Placement and for the resale of
ordinary shares issued and issuable upon exercise of warrants purchased by such Purchasers in the June Offering (as defined below). The Company has agreed to use commercially reasonable efforts to cause such registration statement to become
effective within 91 days following the closing date of the Private Placement and to keep such registration statement effective at all times until no Purchaser of the Warrants in the Private Placement owns any Warrants or Warrant Shares or the
Warrant Shares are subject to resale, assuming cashless exercise, by the holder thereof pursuant to Rule 144 promulgated under the Securities Act (Rule 144) without volume or manner-of-sale restrictions.
In the event that the registration statement has not been (i) filed on or
before the date that is 45 calendar days following the date of the Securities Purchase Agreement or (ii) declared effective by the SEC by the date that is 91 calendar days following the closing of the Private Placement, then the Company will
make pro rata payments to each Purchaser then holding Warrant Shares as liquidated damages in an amount equal to 1% of the aggregate exercise price of such Purchasers Warrants held by such Purchaser on the day of the failure to file the
registration statement or the failure of the registration statement to be declared effective and for each 30-day period (or pro rata for any portion thereof) until the earlier of (i) the date such failure
is cured and (ii) the date such Warrant Shares, assuming cashless exercise, become eligible for resale without volume or manner-of-sale restrictions and without
current public information requirements pursuant to Rule 144. In the event the Company fails to make such payments in a timely manner, such payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full.