Item 1.01. Entry into a Material Definitive Agreement.
On December 20, 2019, Savara Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and accredited investors (the “Investors”), pursuant to which the Company has agreed to issue and sell to the Investors in a private placement (the “Private Placement”), an aggregate of 9,569,430 shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), and, in lieu of shares of common stock,pre-funded warrants to purchase an aggregate of 5,780,537 shares of common stock, and accompanying warrants (the “Milestone Warrants”) to purchase an aggregate of up to 32,577,209 additional shares of common stock (orpre-funded warrants to purchase common stock in lieu thereof) at a price of $1.745 per share and accompanying Milestone Warrant (or $1.744 perpre-funded warrant and accompanying Milestone Warrant). The price perpre-funded warrant and accompanying Milestone Warrant represents the price of $1.745 per share and accompanying Milestone Warrant to be sold in the Private Placement, minus the $0.001 per share exercise price of each suchpre-funded warrant. The exercise price of the Milestone Warrants is $1.48 per share, or if exercised for apre-funded warrant in lieu thereof, $1.479 perpre-funded warrant (representing the Milestone Warrant exercise price of $1.48 per share minus the $0.001 per share exercise price of each suchpre-funded warrant). The Milestone Warrants are exercisable at any time prior to the earlier of 30 days following the achievement of a defined clinical milestone or two years after the closing date of the Private Placement. The pre-funded warrants are exercisable at any time after their original issuance and will not expire. Jefferies LLC and Evercore Group LLC have acted as the Company’s placement agents for the Private Placement.
The Milestone Warrants andpre-funded warrants to be issued in the Private Placement will provide that a holder of Milestone Warrants orpre-funded warrants will not have the right to exercise any portion of its Milestone Warrants orpre-funded warrants if such holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that each holder may increase or decrease the Beneficial Ownership Limitation by giving notice to the Company; but not to any percentage in excess of either 9.99% or 19.99%, as selected by the applicable Investor prior to issuance of the Milestone Warrants and the pre-funded warrants.
Subject to customary closing conditions, the Company expects the Private Placement to close on or about December 24, 2019. The Company expects to receive aggregate gross proceeds of approximately $75,000,000 before deducting placement agent fees and estimated offering expenses payable by the Company if the Milestone Warrants are exercised in full. The Company expects the net proceeds from the Private Placement to be used to fund a new clinical trial of Molgradex for the treatment of autoimmune pulmonary alveolar proteinosis (aPAP) and for other general corporate purposes.
The Purchase Agreement requires the Company to nominate and use its commercially reasonable efforts to have one individual designated by the Investors affiliated with Bain Capital Life Sciences Investors, LLC (collectively, “Bain Capital Life Sciences”) appointed to the Board for as long as Bain Capital Life Sciences holds a number of shares equal to the greater of (i) 50% of the number of shares of Common Stock (including shares of Common Stock issued or issuable upon exercise of thepre-funded warrants and Milestone Warrants described above) purchased pursuant to and on the date of the Purchase Agreement, and (ii) 5% of the outstanding shares of Common Stock (the “Bain Director Designation Right”). The Purchase Agreement also contains customary representations, warranties and covenants made solely for the benefit of the parties to the Purchase Agreement.
The Purchase Agreement is incorporated herein by reference, but only to provide information regarding the terms of the Purchase Agreement and not to provide with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the Securities and Exchange Commission (the “SEC”).
Also on December 20, 2019, in connection with the Private Placement and the Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which, among other things, the Company has agreed to prepare and file with the SEC a registration statement to register for resale the shares of Common Stock sold in the Private Placement and the shares of Common Stock underlying the Milestone Warrants andpre-funded warrants described above. The foregoing descriptions of the material terms of the Purchase Agreement, the Milestone Warrants, thepre-funded warrants and the registration rights agreement are qualified in their entirety by reference to the full text of the Purchase Agreement, the form of Milestone Warrant, the form ofpre-funded warrant and the registration rights agreement, which are filed as Exhibits 10.1, 4.1, 4.2 and 10.2, respectively, to this Current Report on Form8-K and incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
Pursuant to the Private Placement described in Item 1.01 of this Current Report on Form8-K, which description is incorporated by reference into this Item 3.02 in its entirety, the Company will sell the securities to “accredited investors,” as that term is defined in the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration
