Item 1.01
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Entry into a Material Definitive Agreement.
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On November 16, 2018, we entered into a placement agency
agreement with Dawson James Securities, Inc. with respect to the issuance and sale of an aggregate of up to 7,300,000 units, each
unit consisting of one share of common stock, par value $0.0001 per share or, in lieu of common stock, if purchasing common stock
would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of
the outstanding common stock, shares of series C convertible preferred stock convertible into shares of common stock, together
with one half of one warrant to purchase one share of common stock at an exercise price equal to $1.00 per whole share, in a public
offering. The public offering price for each unit was $1.00.
The shares of common stock or preferred
stock, the warrants and the shares issuable upon exercise of the warrants and/or the preferred stock are being offered and sold
to the public pursuant to the Company’s registration statement on Form S-1 and an accompanying prospectus (File No. 333-227806),
which was declared effective by the Securities and Exchange Commission on November 16, 2018, and a prospectus filed with the Securities
and Exchange Commission on November 20, 2018.
The warrants offered in the public offering
are Series C warrants and will terminate on the fifth anniversary of the date of issuance. Each full warrant will entitle the holder
to purchase one share of common stock at an initial exercise price of $1.00 per share.
The closing of the offering occurred on
November 21, 2018 and at such closing we sold 4,564,400 shares of common stock, 9.65 shares of Series C preferred stock (convertible
into 965,000 shares of common stock) and 2,764,700 warrants for gross proceeds of $5.5 million. The net proceeds to us from the
sale of the shares of common stock, or preferred stock, and the warrants are expected to be approximately $4.6 million, after
deducting placement agent commissions and other estimated offering expenses payable by us.
Pursuant to the placement agency
agreement, we agreed to pay Dawson James Securities, Inc. a cash fee equal to 8% of the aggregate gross proceeds raised in this
offering. We also agreed to pay fees and expenses of the placement agent, not to exceed $167,500, and to issue to Dawson James
Securities, Inc., on the closing date, a unit purchase option for the purchase of up to 276,470 units, equal to 5% of the aggregate
number of units sold in the public offering, with an exercise price of $1.25, or 125% of the price per unit. The Benchmark Company,
LLC provided us with financial advisory services
The placement agency agreement provides that we will agree,
subject to certain exceptions, for a period of six months 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, shares we are contractually obligated to issue; 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. Notwithstanding the foregoing, we may continue to grant shares of common stock, options and other
equity for compensation purposes consistent with past practices and we may file a registration statement on Form S-8.
Our officers and directors have also agreed,
subject to limited exceptions, for a period of 6 months after the date of the placement agency agreement, not to offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, lend, or otherwise dispose of, directly or indirectly any shares of capital stock or any securities convertible
into or exchangeable for our capital stock without the prior written consent of the placement agent. The placement agent 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.
The placement agency agreement contains
customary representations, warranties and agreements by us, customary conditions to closing, indemnification obligations of us
and Dawson James Securities, Inc., 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 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 agency agreement.
In furtherance of the offering, on November
21, 2018, we entered into a warrant agency agreement with Computershare, Inc. and its wholly-owned subsidiary, Computershare Trust
Company, N.A. pursuant to which Computershare agreed to act as our warrant agent with respect to the series C warrants.