On November 22, 2022, scPharmaceuticals Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with SVB Securities LLC and Cowen and Company, LLC, as representatives of the several underwriters named in Schedule A thereto (collectively, the “Underwriters”), relating to an underwritten offering of 6,620,000 shares (the “Shares”) of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), and, in lieu of Common Stock to a certain investor, a pre-funded warrant (the “Pre-funded Warrant”) to purchase 2,905,000 shares of Common Stock (the “Offering”). The closing of the Offering is expected to take place on November 25, 2022. All of the Shares and the Pre-funded Warrant are being sold by the Company. The offering price of the Shares to the public is $5.25 per share, and the offering price of the Pre-funded Warrant to the public is $5.249 per underlying share, which is equal to the price per share of Common Stock being sold in this offering, minus $0.001, which is the Pre-funded Warrant’s exercise price per share. The net proceeds from the Offering are expected to be approximately $46.6 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company does not intend to list the Pre-funded Warrant on Nasdaq or any other nationally recognized securities exchange or trading system.
The Pre-funded Warrant has an exercise price per share of Common Stock equal to $0.001 per share. The exercise price and the number of shares of Common Stock issuable upon exercise of the Pre-funded Warrant is subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock. The Pre-funded Warrant is exercisable from the date of issuance by means of a cashless exercise. Under the Pre-funded Warrant, the Company may not effect the exercise of the Pre-funded Warrant, and the holder will not be entitled to exercise any portion of the Pre-funded Warrant that, upon giving effect to such exercise, would result in: (i) the aggregate number of shares of Common Stock beneficially owned by such holder (together with its affiliates) exceeding 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise; or (ii) the combined voting power of the Company’s securities beneficially owned by such holder (together with its affiliates) exceeding 4.99% of the combined voting power of all of the Company’s securities outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-funded Warrant, which percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 19.99% upon 61 days’ notice to the Company.
In addition, in certain circumstances, upon a fundamental transaction, the holder of the Pre-funded Warrant will be entitled to receive, upon exercise of the Pre-funded Warrant, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Pre-funded Warrant immediately prior to the fundamental transaction; provided, however, that in the event of a fundamental transaction where the consideration consists solely of cash, solely of marketable securities or a combination thereof, the Pre-funded Warrant will be deemed to be exercised in full in a cashless exercise effective immediately prior to and contingent upon the consummation of such fundamental transaction.
The Company intends to use the net proceeds of the Offering to support the commercialization efforts for FUROSCIX, development of its pipeline, working capital and general corporate purposes. Based on the planned use of proceeds, the Company believes that the net proceeds from the Offering and existing cash, cash equivalents, restricted cash and investments will be sufficient to enable it to fund operating expenses, capital expenditure requirements and planned launch activities through at least 2024. This estimate is based on assumptions that may prove to be incorrect, and the Company could utilize available capital resources sooner than expected.
The Offering was made pursuant to a shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission (“SEC”) on March 23, 2021 and declared effective by the SEC on April 29, 2021 (File No. 333-254637). A prospectus supplement relating to the offering has been filed with the SEC.
The representations, warranties and covenants contained in the Underwriting Agreement were made solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Underwriting Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Underwriting Agreement and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.
