| Item 1.01 | Entry into a Material Definitive Agreement. |
Registered Direct Offering of Shares
As previously reported, on May 6, 2022, Palisade Bio, Inc. (the “Company”) entered into securities purchase agreements (the “Purchase Agreements”) with certain institutional and accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue, in a registered direct offering, an aggregate of 3,646,690 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at a purchase price per share of $0.55 (the “Registered Offering”). The Shares were offered by the Company pursuant to an effective shelf registration statement on Form S-3, which was originally filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2022, as amended, and was declared effective on April 26, 2022 (File No. 333-263705) (the “Registration Statement”) and a prospectus supplement thereunder.
A copy of the legal opinion and consent of Cooley LLP relating to the legality of the issuance and sale of the Shares is filed as Exhibit 5.1 hereto.
Concurrent Private Placement
As previously reported, in a concurrent private placement, the Company also agreed to sell and issue to the Purchasers warrants (the “Purchase Warrants”) to purchase up to 3,646,690 shares of Common Stock at an exercise price of $0.7105 per share, the closing bid price of our Common Stock on May 5, 2022 (the “Concurrent Private Placement”). The Purchase Warrants are not exercisable until six months following the date of issuance and expire five and a half years from the date of issuance.
Placement Agent Warrants
Pursuant to a placement agency agreement dated as of May 6, 2022, the Company engaged Ladenburg Thalmann & Co. Inc. (the “placement agent”) to act as its exclusive placement agent in connection with the Hybrid Offering. The Company agreed to pay the placement agent a cash fee equal to 7.75% of the aggregate gross proceeds raised in the Hybrid Offering and to reimburse the placement agent’s expenses up to an aggregate of $85,000. In addition, the placement agent will also receive placement agent warrants on substantially the same terms as the Purchase Warrants in an amount equal to 6.0% of the aggregate number of Shares sold in the offering, or 218,801 shares of Common Stock, at an exercise price of $0.7105 per share and a five year term. The placement agent warrants are not exercisable until six months following the date of issuance.
The foregoing descriptions of the placement agency agreement and the placement agent warrants are not complete and are qualified in their entireties by reference to the full text of the placement agency agreement and the placement agent warrants copies of which are filed herewith as Exhibits 10.1 and 4.1 respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
