| Item 1.01. | Entry Into a Material Definitive Agreement. |
On May 1, 2024, Corvus Pharmaceuticals, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the investors named therein, including the Company’s chief executive officer and certain of the Company’s existing institutional investors, including investors affiliated with certain of the Company’s directors (collectively, the “Investors”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell to the Investors in a registered direct offering (the “Offering”) an aggregate of 13,512,699 shares (the “Shares”) of common stock, par value $0.0001 per share (“Common Stock”), and common warrants (the “Common Warrants”) to purchase up to 13,078,509 shares of Common Stock (or pre-funded warrants in lieu thereof) at a combined offering price of $1.7312 per Share and Common Warrant, and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 4,144,085 shares of Common Stock and Common Warrants to purchase up to 4,010,927 shares of Common Stock (or Pre-Funded Warrants in lieu thereof), at a combined offering price of $1.7311 per share underlying each Pre-Funded Warrant and Common Warrant, which equals the offering price per Share and Common Warrant less the $0.0001 exercise price per share of the Pre-Funded Warrants, under an effective shelf registration statement on Form S-3 (File No. 333-270921) and a related prospectus supplement filed with the Securities and Exchange Commission (“SEC”) on May 3, 2024 (the “Prospectus Supplement”). The closing of the Offering is expected to occur on or about May 6, 2024, subject to the satisfaction of customary closing conditions. The Pre-Funded Warrants and Common Warrants are not listed on the Nasdaq Global Market or any other securities exchange or trading system and the Company does not intend to list them.
The Company expects to receive net proceeds from the Offering of approximately $30.2 million, after deducting estimated offering expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the Pre-Funded Warrants and the Common Warrants sold in the Offering. The Company intends to use the net proceeds from the Offering, together with its existing cash and cash equivalents, for working capital and general corporate purposes, which may include capital expenditures and research and development and administrative expenses.
The Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Investors, including for liabilities under the Securities Act of 1933, as amended (the “Securities Act”), other obligations of the parties and termination provisions.
The Pre-Funded Warrants have an exercise price per share of Common Stock equal to $0.0001 per share. The exercise price and the number of shares of Common Stock issuable upon exercise of the Pre-Funded Warrants are 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 Warrants will be exercisable at any time after the date of issuance.
The Common Warrants have an exercise price per share of Common Stock equal to $3.50 per share (or $3.4999 per Pre-Funded Warrant). The exercise price and the number of shares of Common Stock (or Pre-Funded Warrants in lieu thereof) issuable upon exercise of the Common Warrants are 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 Common Warrants will be exercisable at any time after the date of issuance and will expire on June 30, 2025.
Under the terms of the Pre-Funded Warrants and the Common Warrants, a holder will not be entitled to exercise any portion of any such warrant, if, upon giving effect to such exercise, the aggregate number of shares of Common Stock beneficially owned by the holder (together with its affiliates, any other persons acting as a group together with the holder or any of the holder’s affiliates) would exceed either 4.99% or 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such warrant, which percentage may be increased at the holder’s election upon 61 days’ notice to the Company subject to the terms of such warrants, provided that such percentage may not exceed 19.99%.
The foregoing descriptions of the Purchase Agreement, Pre-Funded Warrants and Common Warrants are not complete and are qualified in their entirety by reference to the Purchase Agreement and forms of Pre-Funded Warrants and Common Warrants, which are filed as Exhibits 10.1, 4.1 and 4.2, respectively, to this Current Report on Form 8-K (the “Form 8-K”) and are incorporated by reference herein.
