| Item 1.01 | Entry into a Material Definitive Agreement. |
On July 20, 2020, Histogen Inc., a Delaware corporation, (the “Company”), entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $10,000,000 of shares (the “Purchase Shares”) of its common stock, par value $0.0001 per share (the “Common Stock”). Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park, pursuant to which it agreed to provide Lincoln Park with certain registration rights related to the shares issued under the Purchase Agreement (the “Registration Rights Agreement”).
On the Commencement Date (as defined below), Lincoln Park shall purchase 328,516 Purchase Shares at a purchase price of $3.04399 per share. Beginning on the Commencement Date (as defined below) and thereafter, the Company has the right, in its sole discretion, to present Lincoln Park with a purchase notice (a “Regular Purchase Notice”), directing Lincoln Park to purchase up to 20,000 Purchase Shares (a “Regular Purchase”). The amount of Purchase Shares may be increased to up to 40,000 shares if the market price of the Common Stock at the time of sale is not below $5.00 per share, and up to 60,000 Purchase Shares if the market price of the Common Stock is not below $6.00 per share at the time of sale. Lincoln Park’s committed obligation under any single Regular Purchase will not, subject to limited exceptions, exceed $2,000,000; provided, however, that the Company and Lincoln Park may mutually agree to increase the share amount of any Regular Purchase on any purchase date at a purchase price to up to 500,000 shares, above the foregoing amounts. The Purchase Agreement provides for a purchase price per Purchase Share for each Regular Purchase (the “Purchase Price”) equal to the lesser of:
| | • | | the lowest sale price of the Common Stock on the Nasdaq Capital Market on the purchase date of such shares; and |
| | • | | the average of the three lowest closing sale prices for the Common Stock on the Nasdaq Capital Market during the ten consecutive business days ending on the business day immediately preceding the purchase date of such shares. |
In addition, on any date on which the Company submits a Purchase Notice for the maximum amount allowed for such a Regular Purchase to Lincoln Park, it also has the right, in its sole discretion, to present Lincoln Park with an accelerated purchase notice (an “Accelerated Purchase Notice”), directing Lincoln Park to purchase an amount of Purchase Shares (an “Accelerated Purchase”), which number of Purchase Shares will not exceed the lesser of (i) 300% of the number of shares purchased pursuant to such Purchase Notice and (ii) 30% of the aggregate shares of Common Stock traded during all or, if certain trading volume or market price thresholds specified in the Purchase Agreement are crossed on the applicable Accelerated Purchase date, the portion of the normal trading hours on the applicable Accelerated Purchase date prior to such time that any one of such thresholds is crossed (such period, the “Accelerated Purchase Measurement Period”), provided that Lincoln Park will not be required to buy Purchase Shares pursuant to an Accelerated Purchase Notice that exceeds the Purchase Share limits listed above. The purchase price per Purchase Share for each such Accelerated Purchase will be equal to the lesser of 95% of:
| | • | | the volume-weighted average price of the Common Stock on the Nasdaq Capital Market during the applicable Accelerated Purchase Measurement Period on the applicable Accelerated Purchase date; and |
| | • | | the closing sale price of the Common Stock on the Nasdaq Capital Market on the applicable Accelerated Purchase date. |
The Company may also direct Lincoln Park, on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been properly delivered to Lincoln Park in accordance with the Purchase Agreement, to make purchases upon the same terms as an Accelerated Purchase (an “Additional Accelerated Purchase”).
The purchase price of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases and the minimum closing sale price for a Regular Purchase will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the business days used to compute the purchase price. The aggregate number of shares that the Company can sell to Lincoln Park under the Purchase Agreement may in no case exceed 2,362,497 shares (subject to adjustment as described above) of the Common Stock (which is equal to approximately 19.99% of the shares of the Common Stock outstanding immediately prior to the execution of the Purchase Agreement) (the “Exchange Cap”), unless (i) stockholder approval is obtained to issue Purchase Shares above the Exchange Cap, in which case the Exchange Cap will no longer apply, or (ii) the average price of all applicable sales of Common Stock to Lincoln Park under the Purchase Agreement equals or exceeds $2.9769 per share (subject to adjustment as described above) (which represents the Minimum Price, as defined under Nasdaq Listing Rule 5635(d), on the Nasdaq Capital Market immediately preceding the signing of the Purchase Agreement, such that the transactions contemplated by the Purchase Agreement are exempt from the Exchange Cap limitation under applicable Nasdaq rules); provided that at no time may
��
2
