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Item 1.01
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Entry into a Material Definitive Agreement.
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Private Placement
Securities Purchase Agreement
On July 26, 2021, Xenetic Biosciences, Inc., a Nevada corporation (the
“Company”), entered into a securities purchase agreement in connection with a private placement (the “Purchase Agreement”)
with the purchaser named on the signature page thereto (“Purchaser”), pursuant to which the Company agreed to issue and sell
to Purchaser, in a private placement priced at-the-market under Nasdaq rules, (i) 950,000 shares of the Company’s common stock,
par value $0.001 per share (the “Shares”), (ii) warrants to purchase an aggregate of 4,629,630 shares of the Company’s
common stock, with an exercise price of $3.30 per share (the “Series A Warrants”) which expire three and one half years from
the earlier of (a) the six month anniversary of the initial exercise date and (b) the date that the registration statement registering
all of the warrant shares underlying the Series A Warrants is declared effective, and (iii) pre-funded warrants to purchase
up to 3,679,630 shares of the Company’s common stock, with an exercise price of $0.001 per share (the “Series B Warrants”
and together with the Series A Warrants, the “Warrants”) with no expiration (the “Private Placement”), at a purchase
price of $2.70 per one Share and one Series A Warrant and $2.699 per one Series B Warrant and one Series A Warrant. The Private Placement
is expected to close on or about July 28, 2021, subject to the satisfaction of customary closing conditions.
The Company expects to receive aggregate gross proceeds from the Private
Placement of approximately $12.5 million, before deducting placement agent fees and offering expenses, and excluding the exercise of any
Warrants. The potential gross proceeds from the exercise of the Warrants, if fully exercised on a cash basis, will be approximately $15.3
million.
Pursuant to an engagement agreement dated as of July 25, 2021, the
Company engaged H.C. Wainwright & Co., LLC (“Wainwright”) to act as its exclusive placement agent in connection with the
Private Placement. The Company will pay Wainwright placement agent fees equal to 7.0% of the aggregate gross proceeds raised in the Private
Placement, as well as reimbursement of certain expenses.
The Warrants provide that the Company may not effect any exercise of
any Warrants, and a holder will not have the right to exercise any portion of any Warrant, to the extent that after giving effect to such
issuance after exercise, the holder (together with the holder’s affiliates, and any other persons acting as a group together with
the holder or any of the holder’s affiliates (such persons, “attribution parties”)), would beneficially own in excess
of the beneficial ownership limitation. The number of shares of common stock beneficially owned by the holder and its affiliates and attribution
parties includes the number of shares of common stock issuable upon exercise of the Warrant with respect to which such determination is
being made, but excludes the number of shares of common stock which would be issuable upon (i) exercise of the remaining, nonexercised
portion of the Warrant beneficially owned by the holder or any of its affiliates or attribution parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other common stock
equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the
holder or any of its affiliates or attribution parties. Except as set forth in the preceding sentence, beneficial ownership will be calculated
in accordance with Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations
promulgated thereunder. In addition, a determination as to any group status will be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. The beneficial ownership limitation is 4.99% of the number of shares
of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of a
Warrant. The holder, upon notice to the Company, may increase or decrease the beneficial ownership limitation provisions, provided that
the beneficial ownership limitation in no event exceeds 9.99% of the number of shares of the common stock outstanding immediately after
giving effect to the issuance of shares of common stock upon exercise of a Warrant held by the holder. Any increase in the beneficial
ownership limitation will not be effective until the 61st day after notice is delivered to the Company.
The Purchase Agreement contains customary representations, warranties
and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Purchaser, including
for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”), other obligations of the parties
and termination provisions.
Registration Rights Agreement
On July 26, 2021 (the “Agreement Date”), in connection
with the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”)
with Purchaser, pursuant to which the Company agreed to register for resale the Shares, as well as the shares of the Company’s common
stock issuable upon exercise of the Series A Warrants and the Series B Warrants (the “Warrant Shares”). Under the Registration
Rights Agreement, the Company has agreed to file a registration statement covering the resale by Purchaser of the Shares and
Warrant Shares (together, the “Registrable Securities”) within 30 days of the Agreement Date. The Company has agreed to use
commercially reasonable efforts to cause such registration statement to become effective and to keep such registration statement effective
until the date the Registrable Securities covered by such registration statement have been sold or may be resold pursuant to Rule 144
without restriction. The Company has agreed to be responsible for all fees and expenses incurred in connection with the registration of
the Registrable Securities.
In the event (i) the registration statement is not filed within
the time period specified above, (ii) the Company fails to file with the SEC a request for acceleration of the registration statement
in accordance with Rule 461 within five trading days of the date that the Company is notified by the SEC that the registration statement
will not be reviewed by the SEC staff or is not subject to further comment by the SEC staff, (iii) the Company fails to file a pre-effective amendment
and otherwise respond in writing to comments made by the SEC in respect of the registration statement within 15 days after the receipt
of comments by or notice from the SEC that such amendment is required in order for the registration statement to be declared effective,
(iv) the registration statement has not been declared effective (A) by the 60th day after the Agreement Date
(or, in the event of a “full review” by the SEC, the 90th day after the Agreement Date) or (B) within
five trading days following the date the Company is notified by the SEC that the registration statement will not be reviewed or is no
longer subject to further review and comments, or (v) after the registration statement is declared effective, the registration
statement ceases for any reason to remain continuously effective as to all Registrable Securities, or the holders of Registrable
Securities are otherwise not permitted to utilize the prospectus in the registration statement to resell such Registrable
Securities, for more than 15 consecutive days or more than an aggregate of 20 days during any 12-month period, then the Company
has agreed to make pro rata payments to each holder as liquidated damages in an amount equal to 1.5% of the aggregate amount invested
by each such holder in the Registrable Securities then held by the holder per 30-day period or pro rata for any portion thereof
for each such month during which such event continues, provided that the maximum aggregate amounts payable as liquidated
damages shall not exceed 6.0% of the aggregate amount invested by each such holder in the Registrable Securities then held by the holder.
The Company has granted Purchaser customary indemnification rights
in connection with the registration statement. Purchaser has also granted the Company customary indemnification rights in connection with
the registration statement.
The representations, warranties and covenants contained in the Purchase
Agreement, the Warrants and the Registration Rights Agreement were made solely for the benefit of the parties thereto and may be subject
to limitations agreed upon by the contracting parties. The foregoing descriptions of the Warrants, the Purchase Agreement and the Registration
Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Series A Warrant,
the Series B Warrant, the Purchase Agreement, the Registration Rights Agreement and the Engagement Letter, copies of which are filed as
Exhibits 4.1, 4.2, 10.1, 10.2 and 10.3 hereto, respectively, and incorporated by reference herein.