UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):December 9, 2016
Enumeral Biomedical Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-55415 | 99-0376434 |
| (State or Other Jurisdiction | (Commission File | (I.R.S. Employer |
| of Incorporation) | Number) | Identification Number) |
200 CambridgePark Drive, Suite 2000 Cambridge, Massachusetts (Address of Principal Executive Offices) |
02140 (Zip Code) |
(617) 945-9146
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
1.01. Entry Into a Material Definitive Agreement.
Offer to Amend and Exercise Certain Warrants to Purchase Common Stock
On December 12, 2016, Enumeral Biomedical Holdings, Inc. (the “Company”) consummated its offer to amend and exercise (the “Offer to Amend and Exercise”) certain outstanding warrants (the “Original Warrants”) to purchase an aggregate of 21,549,510 shares of the Company’s common stock, $0.001 par value per share (“Common Stock”), originally issued to investors participating in the Company’s private placement financing with respect to which the closing occurred on July 31, 2014 (the “2014 PPO Unit Offering”).
The Offer to Amend and Exercise expired at 5:00 p.m. Eastern time on December 9, 2016 (the “Expiration Date”). Pursuant to the Offer to Amend and Exercise, an aggregate of 6,863,000 Original Warrants were tendered by their holders and were amended and exercised in connection therewith for gross proceeds to the Company of $3,431,500. Such tendered Original Warrants represented approximately 31.8% of the Company’s outstanding Original Warrants as of December 9, 2016.
The Original Warrants of holders who elected to participate in the Offer to Amend and Exercise were amended to (i) receive four shares of common stock for each warrant exercised rather than one, (ii) reduce the exercise price to $0.50 per warrant in cash (or $0.125 per share); (iii) shorten the exercise period so that it expired concurrently with the expiration of the Offer to Amend and Exercise at 5:00 p.m. (Eastern Time) on December 9, 2016, and (iv) delete any price-based anti-dilution provisions.
The warrant agent for the Offer to Amend and Exercise (the “Warrant Agent”) was paid an aggregate commission of approximately $255,000.
The Company plans to use the net proceeds from the Offer to Amend and Exercise to fund its ongoing operations and for general working capital purposes. As of the date hereof, and after giving effect to the net proceeds from the Offer to Amend and Exercise, the Company believes that it has sufficient liquidity to fund operations into May 2017. The Company continues to explore a range of potential transactions, which may include public or private equity offerings, debt financings, collaborations and licensing arrangements, and/or other strategic alternatives, including a merger, sale of assets or other similar transactions.
Following the amendment and exercise of the 6,863,000 Original Warrants pursuant to the terms of the Offer to Amend and Exercise, the issuance of the 4,880,655 Warrant Agent Warrants (as described below), the issuance of the shares of Common Stock pursuant to the Note Conversion (as described below), and the issuance of the Square 1 Shares (as described below), the Company had 128,343,122 shares of Common Stock issued and outstanding, excluding outstanding options and warrants to purchase 7,907,321 and 22,754,490 shares of the Company’s Common Stock, respectively.
The Company issued the Original Warrants in a private placement in reliance on the exemption from registration provided by Rule 506 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). In connection with such transaction, the holders of the Original Warrants represented that they were “accredited investors.” Similarly, the issuance of the shares of the Company’s Common Stock upon the amendment and exercise of the 6,863,000 Original Warrants was exempt from registration under the Securities Act pursuant to Rule 506 of Regulation D. In connection with the Offer to Amend and Exercise, all holders of tendered Original Warrants represented that they were “accredited investors.” The issuance of the Warrant Agent Warrants in connection with this transaction was exempt from registration under Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving any public offering.
Amendment of Certain Warrants to Purchase Common Stock
Effective as of December 12, 2016, the Company and holders of a majority of the Original Warrants approved an amendment to remove the price-based anti-dilution provisions in the Original Warrants. As a result, the priced-based anti-dilution provisions contained in the Original Warrants have been removed and are of no further force or effect as of December 12, 2016. Accordingly, those Original Warrants that were not tendered in the Offer to Amend and Exercise remain outstanding with an exercise price of $2.00 per share, and have been amended such that they no longer include price-based anti-dilution provisions.
Also in connection with the consummation of the Offer to Amend and Exercise, on December 12, 2016 the Company and holders of a majority of the outstanding warrants previously issued to the placement agent and its sub-agents in the Company’s 2014 PPO Unit Offering (the “Broker Warrants”) approved an amendment to remove the price-based anti-dilution provisions in the Broker Warrants and to reduce the exercise price of the Broker Warrants from $1.00 per share to $0.125 per share. None of the Broker Warrants were exercised in connection with the Offer to Amend and Exercise and all Broker Warrants remain outstanding as of the date of this filing.
Conversion of Certain Convertible Promissory Notes
Pursuant to the terms of certain 12% Senior Secured Promissory Notes (the “Notes”) in the aggregate principal amount of $3,038,256 issued to investors in the Company’s private placement financing with respect to which the closing occurred on July 29, 2016, such Notes automatically converted into 48,806,545 shares of Common Stock on December 12, 2016 in connection with the consummation of the Offer to Amend and Exercise (the “Note Conversion”). In connection with the Note Conversion, the Warrant Agent received warrants to purchase 4,880,655 shares of Common Stock (the “Warrant Agent Warrants”).
The Company issued the Notes in a private placement in reliance on the exemption from registration provided by Rule 506 of Regulation D under the Securities Act. In connection with such transaction, the holders of the Notes represented that they were “accredited investors.”
Registration Rights
On December 12, 2016, in connection with the consummation of the Offer to Amend and Exercise and the Note Conversion, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company has agreed that promptly, but no later than 90 calendar days from the Expiration Date, it will file a registration statement with the SEC (the “Registration Statement”) to register the resale of the shares of Common Stock issued upon exercise of the Amended Warrants and Notes and the Warrant Agent Warrants under the Securities Act (the “Registrable Shares”). The Company has agreed to use its commercially reasonable efforts to ensure that such Registration Statement is declared effective within 180 calendar days of the Expiration Date. If the Company is late in filing the Registration Statement or if the Registration Statement is not declared effective within 180 days of filing with the SEC, the Company will be required to pay the holders of Registrable Shares that have not been so registered, liquidated damages at a rate equal to 1.00% of the aggregate purchase price paid by such holder (x) for the Notes and (y) the aggregate exercise price paid by the holder with respect to the Amended Warrants, as applicable, for each full thirty (30) days (i) the Company is late in filing the Registration Statement, (ii) the Registration Statement is late in being declared effective by the SEC, (iii) after the Registration Statement is declared effective, the Registration Statement ceases for any reason to remain continuously effective or the holders of the Registrable Shares are otherwise not permitted to utilize the prospectus therein to resell the Registrable Securities for a period of more than 30 consecutive trading days, or (iv) the Registrable Shares, if issued, are not listed or included for quotation on a national exchange or an over-the-counter market, or trading of the Common Stock is suspended or halted on such exchange or market, which at the time constitutes the principal market for the Common Stock, for more than three (3) full, consecutive trading days; provided, however, a Registration Event (as defined shall not be deemed to occur if all or substantially all trading in equity securities (including the Common Stock) of the Company is suspended or halted on the Approved Market (as defined in the Registration Rights Agreement) for any length of time; provided, however, that in no event shall the aggregate of any such liquidated damages exceed 8% of (x) the aggregate purchase price paid by a holder for the July 2016 Notes and (y) the aggregate exercise price paid by the holder with respect to the Amended Warrants. No liquidated damages will accrue and accumulate with respect to (a) any Registrable Shares removed from the Registration Statement in response to a comment from the staff of the SEC limiting the number of shares of Common Stock which may be included in the Registration Statement (a “Cutback Comment”), or (b) after the shares may be resold under Rule 144 under the Securities Act or another exemption from registration under the Securities Act.
The Company is required to use its commercially reasonable efforts to keep the Registration Statement “evergreen” for 12 months from the date it is declared effective by the SEC or until Rule 144 is available to the holders of Registrable Shares who are not and have not been affiliates of the Company with respect to all of their registrable shares, whichever is earlier.
The holders of Registrable Shares (including any shares of Common Stock removed from the Registration Statement as a result of a cutback comment from the SEC) will have two “piggyback” registration rights for such shares with respect to any registration statement filed by the Company following the effectiveness of the Registration Statement that would permit the inclusion of such shares, subject to customary cut-backs on a pro rata basis if the underwriter or the Company determines that marketing factors require a limitation on the number of shares of stock or other securities to be underwritten.
The Company will pay all expenses in connection with any registration obligation provided in the Registration Rights Agreement, including, without limitation, all registration, filing, stock exchange fees, printing expenses, all fees and expenses of complying with applicable securities laws, and the fees and disbursements of its counsel and of its independent accountants. Each investor will be responsible for its own sales commissions, if any, transfer taxes and the expenses of any attorney or other advisor that such investor decides to employ.
All descriptions of the Registration Rights Agreement herein are qualified in their entirety by reference to the text of the form of such document filed as Exhibit 10.1 hereto, which is incorporated herein by reference.
Amendment and Exercise of Certain Warrants owned by Square 1 Bank
On December 12, 2016, the Company and Square 1 Bank (“Square 1”), which was subsequently acquired by PacWest Bancorp, entered into an amendment (the “Amendment”) to that certain Amended and Restated Warrant to Purchase Stock originally issued to Square 1 on July 31, 2014, which entitled Square 1 to purchase 54,245 shares of Common Stock (the “First Warrant”), and that certain Amended and Restated Second Warrant to Purchase Stock issued by the Company to Square 1 on July 31, 2014, which entitled Square 1 to purchase 12,329 shares of Common Stock (the “Second Warrant” and together with the First Warrant, the “Square 1 Warrants”). In accordance with the terms of the Amendment, the Square 1 Warrants were amended to (i) change the expiration date to December 12, 2016, (ii) reduce the exercise price to $0.125 per share and (iii) remove any anti-dilution provisions.
Immediately following the Amendment, an assignee of Square 1 delivered a cashless exercise notice with respect to the First Warrant and Second Warrant pursuant to which the Company issued 9,041 and 2,055 shares of Common Stock, respectively, for an aggregate issuance of 11,096 shares of Common Stock (the “Square 1 Shares”). There are no more shares available for issuance under the Square 1 Warrants.
All descriptions of the Amendment herein are qualified in their entirety by reference to the text of such document filed as Exhibit 10.2 hereto, which is incorporated herein by reference.
The Company issued the Square 1 Shares in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, which exempts transaction by an issuer not involving any public offering.
Item 3.02. Unregistered Sale of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.03. Material Modification to Rights of Security Holders.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On December 12, 2016, the Company issued a press release with respect to the Offer to Amend and Exercise. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Item 7.01 of this Current Report on Form 8-K, including the information contained in Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| 10.1 | Form of Registration Rights Agreement (Incorporated by reference to Exhibit (d)(2) of the tender offer statement on Schedule TO, as filed with the Securities and Exchange Commission on October 28, 2016 (005-88781)). |
| 10.2* | Amendment to Amended and Restated Warrants to Purchase Stock, dated as of December 12, 2016, between Enumeral Biomedical Holdings, Inc. and PacWest Bancorp. |
| 99.1** | Press Release, dated December 12, 2016. |
* Filed herewith
** Furnished herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENUMERAL BIOMEDICAL HOLDINGS, INC. | |||
| Dated: December 12, 2016 | By: | /s/ Kevin G. Sarney | |
| Name: | Kevin G. Sarney | ||
| Title: | Vice President of Finance, Chief Accounting Officer and Treasurer | ||