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Item 1.01
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Entry into a Material Definitive Agreement.
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On November 26, 2019, we entered into
a placement agency agreement with Dawson James Securities, Inc., as the placement agent, with respect to the issuance and sale
of an aggregate of up to 448,949 shares of common stock, par value $0.0001 per share, in a public offering. The final number of
shares sold in the offering was 446,577. The public offering price for each share was $3.50.
The shares of common stock were being offered
and sold to the public pursuant to the Company’s registration statement on Form S-3 and an accompanying prospectus (File
No. 333-221477), which was declared effective by the Securities and Exchange Commission on November 27, 2017, a preliminary prospectus
supplement dated November 25, 2019 and a final prospectus supplement filed with the Securities and Exchange Commission on November
27, 2019.
The net proceeds to us from the sale of
the shares of common stock are expected to be approximately $1.4 million, after deducting placement agent commissions and other
estimated offering expenses payable by us.
Pursuant to the placement agency
agreement, we agreed to pay the placement agent a cash fee equal to 8% of the aggregate gross proceeds raised in the public
offering. We also agreed to issue the placement agents warrants to purchase up to 5% of the shares of our common stock sold
in the offering. The placement agent warrants will be exercisable beginning on May 26, 2020 and ending on November 26, 2024 and
will have an exercise price of $4.375 per share. We also agreed to pay certain expenses of the placement agents, including
legal and diligence fees, not to exceed $50,000.
The placement agency agreement contains
customary representations, warranties and agreements by us, customary conditions to closing, indemnification obligations of us
and the placement agents, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties
and termination provisions. The representations, warranties and covenants contained in the placement agency agreement were made
only for purposes of such placement agency agreement and as of 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, including being qualified by confidential
disclosures exchanged between the parties in connection with the execution of the placement agent agreement.
The placement agency agreement provides
that we agree, for a period of 60 days from the date of this offering, that we will not (a) offer, sell, or otherwise transfer
or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable
for shares of our capital stock, except for the exercise of outstanding options and warrants, securities issued for compensation;
or (b) file or caused to be filed any registration statement relating to the offering of any shares of our capital stock or any
securities convertible into or exercisable or exchangeable for shares of our capital stock, other than pursuant to a registration
statement on Form S-8 for employee benefit plans.
Our officers and directors have also agreed,
subject to limited exceptions, for a period of 60 days after the date of the placement agency agreement, not to offer, sell, contract
to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of, directly or indirectly any shares of
common stock or any securities convertible into or exchangeable for our common stock either owned as of the date of the placement
agency agreement or thereafter acquired without the prior written consent of the placement agent. The placement agents may, in
their sole discretion and at any time or from time to time before the termination of the lock-up period, without notice, release
all or any portion of the securities subject to lock-up agreements.
With certain exceptions, Dawson James Securities,
Inc. shall be entitled to the same fees as provided in this offering with respect to any public or private offering or other financing
or capital-raising transaction of any kind to the extent that such financing or capital is provided to us by investors whom Dawson
James had introduced to us or that participated in this offering, if such financing is consummated at any time within the 6-month
period following completion of the offering. We also granted Dawson James the right of first refusal to act as lead managing underwriter
and sole bookrunner, or as lead placement agent, for any and all future equity, equity-linked or convertible debt offerings, excluding
revolving loan debt offerings, at the market sales or funds from certain purchasers, during such 6-months period, of the Company,
or any successor to or any subsidiary of the Company.
The foregoing descriptions of the placement
agency agreement and the placement agent warrant are not complete and are qualified in its entirety by reference to the full text
of the placement agency agreement and the securities purchase agreement, copies of which are filed herewith as Exhibits 4.1 and
10.1 to this Current Report on Form 8-K and are incorporated herein by reference. This Current Report on Form 8-K also incorporates
by reference the placement agency agreement, legal opinion and placement agent warrant into our shelf registration statement on
Form S-3 (File No. 333-221477) previously filed with the Securities and Exchange Commission.
This report does not constitute an offer
to sell or the solicitation of an offer to buy, and these securities cannot be sold in any state or jurisdiction in which this
offer, solicitation, or sale would unlawful prior to registration or qualification under the securities laws of any state or jurisdiction.
Any offer will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration
statement.
This report contains forward-looking statements.
Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies,
predictions or any other statements related to our future activities, our planned spin-off, or future events or conditions. These
statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made
by management. These statements are not guarantees of future performances and involve risks, uncertainties and assumptions that
are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in
the forward-looking statements due to numerous factors, including those risks discussed in our Annual Report on Form 10-K and in
other documents that we file from time to time with the Securities and Exchange Commission. Any forward-looking statements speak
only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect
events or circumstances after the date of this report, except as required by law.