| Item 1.01 | Entry into a Material Definitive Agreement. |
Private Placement of Common Stock and Non-Voting Preferred Stock
On November 24, 2021, Regulus Therapeutics Inc., a Delaware corporation (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue (i) 58,923,352 shares of the Company’s common stock (“Common Stock”) at a purchase price of $0.36 per share, which is the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the Purchase Agreement, and (ii) 3,725,720 shares of newly designated non-voting Class A-4 convertible preferred stock of the Company, in lieu of shares of Common Stock, at a purchase price of $3.60 per share in a private placement transaction (the “Private Placement”). The closing of the Private Placement is expected to occur on or about November 30, 2021 (the “Closing”), subject to customary closing conditions. The total gross proceeds to the Company at the Closing are expected to be approximately $34.6 million. Each share of non-voting Class A-4 convertible preferred stock is convertible into 10 shares of Common Stock, subject to certain beneficial ownership conversion limitations.
Stelios Papadopoulos, Ph.D., the Company’s Chairman of the Board, is a Purchaser under the Purchase Agreement and has agreed to purchase 2,222,222 shares of Common Stock at the Closing at a purchase price of $0.36 per share of Common Stock for an aggregate purchase price of $799,999.92.
SVB Leerink LLC is acting as lead placement agent for the Private Placement and H.C. Wainwright & Co., LLC is acting as co-placement agent for the Private Placement. Each is entitled to receive a portion of a combined fee equal to 6.0% of the aggregate gross proceeds from the securities sold at the Closing, plus the reimbursement of certain expenses.
Under the terms of the Purchase Agreement, the Company has agreed to prepare and file, within 30 days after the Closing, one or more registration statements with the Securities and Exchange Commission (the “SEC”) to register for resale the Common Stock issued under the Purchase Agreement and the shares of Common Stock issuable upon conversion of the non-voting convertible preferred stock issued pursuant to the Purchase Agreement (the “Registrable Securities”), and generally to cause the applicable registration statements to become effective within 90 days after the Closing. Certain cash penalties will apply to the Company in the event of registration failures, as described in the Purchase Agreement.
The Purchase Agreement contains customary representations, warranties and covenants that were made solely for the benefit of the parties to the Purchase Agreement. Such representations, warranties and covenants (i) are intended as a way of allocating risk between the parties to the Purchase Agreement and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding the terms of transaction and not to provide investors with any other factual information regarding the Company. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures.
