| Item 1.01. | Entry into a Material Definitive Agreement. |
On December 14, 2023, Heritage Insurance Holdings, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with JonesTrading Institutional Services LLC (the “Underwriter”) in connection with its previously announced underwritten public offering (the “Offering”) of 3,703,703 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), at a public offering price of $6.75 per share (“Public Offering Price”) less underwriting discounts and commissions. Under the terms of the Underwriting Agreement, the Company also granted the Underwriter an option, exercisable for 30 days from the date of the Underwriting Agreement, to purchase up to an additional 555,555 shares of Common Stock at the Public Offering Price less underwriting discounts and commissions.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriter, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties, and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties, and may be subject to agreed limitations.
On December 14, 2023, the Company entered into a securities purchase agreement (“Purchase Agreement”) pursuant to which (i) Raymond T. Hyer, a current holder of approximately 13.5% shares of our Common Stock, agreed to purchase directly from us, in a concurrent private placement, 148,148 shares of Common Stock at the Public Offering Price and (ii) Ernie Garateix, a director of the Company and the Company’s Chief Executive Officer and Paul L. Whiting, a director of the Company, agreed to purchase directly from us, in a concurrent private placement, an aggregate of 27,247 and 40,871, respectively, shares of our Common Stock at $7.34, the closing price of the Company’s Common Stock on December 14, 2023 (the “Private Placement”).
The aggregate net proceeds to the Company from the Offering and the Private Placement are expected to be approximately $24.8 million, or $28.3 million if the Underwriter exercises its option to purchase additional shares in full, in each case after deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for general corporate and operations purposes and to fund anticipated growth.
The Offering was made pursuant to a shelf registration statement on Form S-3 (File No. 333-254091) previously filed with the Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on April 22, 2021, and a related prospectus and prospectus supplement, in each case filed with the SEC.
The foregoing summary of the terms of the Underwriting Agreement and the Purchase Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Underwriting Agreement and the Purchase Agreement, each of which is attached hereto as Exhibit 1.1 and 1.2, respectively, and are incorporated herein by reference.
An opinion by Greenberg Traurig, P.A., counsel to the Company, as to the legality of the issuance and sale of the shares of Common Stock in the Offering is attached hereto as Exhibit 5.1 and is incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The information set forth in “Item 1.01 Entry into a Material Definitive Agreement” relating to the Private Placement is incorporated by reference herein in its entirety. The shares sold in the Private Placement were not registered under the Securities Act or the securities laws of any state, and were offered and sold in reliance upon the exemption from registration afforded by Section 4(a)(2) under the Securities Act and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering.
