Upon the satisfaction of the conditions in the LPC Purchase Agreement, the Company will have the right, from time to time at its sole discretion over the36-month period from and after the Commencement Date, to direct Lincoln Park to purchase up to 200,000 shares of Common Stock on any business day (subject to certain limitations contained in the LPC Purchase Agreement), with such amounts increasing based on certain threshold prices set forth in the LPC Purchase Agreement; provided however, no regular purchase shall exceed $2,000,000 in total purchase proceeds up to 300,000 shares of Common Stock. The purchase price of shares of Common Stock that the Company elects to sell to Lincoln Park pursuant to the LPC Purchase Agreement will be based on the market prices of the Common Stock at the time of such purchases as set forth in the LPC Purchase Agreement.
In addition to regular purchases, as described above, the Company may also direct Lincoln Park to purchase additional amounts as accelerated purchases or as additional accelerated purchases if the closing sale price of the Common Stock is not below certain threshold prices, as set forth in the LPC Purchase Agreement. In all instances, the Company may not sell shares of its Common Stock to Lincoln Park if it would result in Lincoln Park beneficially owning more than 9.99% of the Common Stock at any time, and the Company also may not sell shares of its Common Stock to Lincoln Park under the LPC Purchase Agreement if it would result in the issuance of more than 19.99% of the number of shares of the Company’s Common Stock outstanding immediately prior to the signing of the LPC Purchase Agreement unless shareholder approval is obtained or certain other conditions are satisfied in compliance with the rules of the Nasdaq Global Market where the Common Stock is listed.
The LPC Purchase Agreement contains customary representations, warranties, covenants and indemnification provisions. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s common stock. Except for a prohibition on entering into any other variable rate transactions, there are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the LPC Purchase Agreement.
As consideration for Lincoln Park’s commitment to purchase shares of Common Stock pursuant to the LPC Purchase Agreement, the Company is issuing to Lincoln Park Capital a total of 413,349 shares of Common Stock (the “Commitment Shares”). The Company will not receive any cash proceeds from the issuance of the Commitment Shares.
The Company has no obligation to sell Lincoln Park any shares of Common Stock under the LPC Purchase Agreement, the Company has the right, by giving written notice as specified in the LPC Purchase Agreement, to terminate the LPC Purchase Agreement at any time. The Company intends to use the net proceeds, if any, from the sales pursuant to the LPC Purchase Agreement for working capital and general corporate purposes, which may include, among other things, funding commercialization efforts and research and development activities.
The Common Stock subject to the LPC Purchase Agreement was registered pursuant to the Registration Statement and the related base prospectus included in the Registration Statement, as supplemented by a prospectus supplement dated July 30, 2019.
The foregoing descriptions of the LPC Purchase Agreement and Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the LPC Purchase Agreement and Registration Rights Agreement, which are filed as Exhibits 10.2 and 4.1, respectively, to this Current Report on Form8-K.
This Current Report onForm 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On July 25, 2019, John McDonough notified the Company of his resignation as President and Chief Executive Officer (“CEO”) of the Company, effective as of the date on which his successor commences employment with the Company or such earlier date as determined by the Board of Directors of the Company (the “Separation Date”). Mr. McDonough’s employment with the Company will end on the Separation Date, and he will become the Chairman of the Board of Directors effective July 30, 2019.
3
