Washington, D.C. 20549
Entera Bio Ltd.
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 (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 1.01 Entry into a Material Definitive Agreement.
On December 20, 2023, Entera Bio Ltd., a company organized under the laws of the State of Israel (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”), providing for the private placement (the “Private Placement”) to the Purchasers of an aggregate of 7,916,879 units (collectively, the “Units”), each Unit consisting of (i) one ordinary share, par value NIS 0.0000769 per share, of the Company (an “Ordinary Share”) (or, in lieu thereof, one pre-funded warrant to purchase one Ordinary Share (the “Pre-Funded Warrants”)) and (ii) one warrant to purchase one Ordinary Share (the “Ordinary Share Warrant”), for aggregate proceeds of approximately $6.6 million (or $0.835 per Unit, which represented the aggregate of the Nasdaq (“Nasdaq”) closing price on December 20, 2023, and $0.125 per Ordinary Share Warrant). The Private Placement was priced at the market under applicable Nasdaq rules. The closing of the Private Placement occurred on December 22, 2023 (the “Closing Date”).
Certain Purchasers elected to receive Pre-Funded Warrants in lieu of Ordinary Shares, as such warrants may not be exercised if the aggregate number of Ordinary Shares beneficially owned by the holder thereof would exceed 4.99% immediately after exercise thereof, subject to increase to 9.99% at the option of the holder. Each Pre-Funded Warrant has an exercise price of NIS 0.0000769 per Ordinary Share, is immediately exercisable and may be exercised at any time and has no expiration date, and is subject to customary adjustments.
Each Ordinary Share Warrant has an exercise price of $1.00 per share (a premium of 41% to the closing price of the Ordinary Shares on Nasdaq on December 20, 2023), is immediately exercisable, and expires five years from the date of issuance, and is subject to customary adjustments. The Ordinary Share Warrants purchased by certain of the Purchasers contain a provision pursuant to which such Ordinary Share Warrants may not be exercised if the aggregate number of Ordinary Shares beneficially owned by the holder thereof would exceed 4.99% immediately after exercise thereof, subject to increase to 9.99% at the option of the holder. If all Ordinary Share Warrants were exercised for cash, then the Company would receive additional proceeds of approximately $7.9 million. There can be no assurance that the holders of the Ordinary Share Warrants exercise their respective warrants for cash, or at all.
The Company intends to use the net proceeds from the Private Placement for general working capital purposes.
Ms. Miranda Toledano, the Company’s Chief Executive Officer, and Mr. Gerald Lieberman, Chairman of the Company’s Board of Directors, participated in the Private Placement on the same terms and subject to the same conditions as all other Purchasers.
The securities issued to the Purchasers under the Purchase Agreement were offered in reliance on an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder. The Company relied on this exemption from registration based in part on representations made by each Purchaser, including that each Purchaser is an “accredited investor”, as defined in Rule 501(a) promulgated under the Securities Act.
Network 1 Financial Securities Inc. (the “Placement Agent”) served as the placement agent in connection with the Private Placement, and the Company has agreed to (i) pay a customary cash placement fee to the Placement Agent and (ii) issue to the Placement Agent (or its designees) warrants (the “Placement Agent Warrants”) to purchase up to 487,496 Ordinary Shares. In addition, in connection with the introduction to certain non U.S. investors in connection with the Private Placement, the Company agreed to (i) pay a non-U.S. individual (the “Finder”) a customary cash finder fee and (ii) issue to the Finder warrants (the “Finder Warrants”) to purchase up to 179,640 Ordinary Shares. The Placement Agent Warrants and the Finder Warrants contain the same terms and each contains the same terms as the Ordinary Share Warrants, except that the exercise price of both the Placement Agent Warrants and the Finder Warrants is $0.71 per Ordinary Share.
The sale of the securities pursuant to the Purchase Agreement has not been registered under the Securities Act or any state securities laws. The securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Neither this Current Report on Form 8-K, nor the exhibits attached hereto, is an offer to sell or the solicitation of an offer to buy the securities described herein or therein.
The Company and the Purchasers also entered into a Registration Rights Agreement, dated December 22, 2023, pursuant to which the Company has agreed to prepare and file a registration statement with the Securities and Exchange Commission no later than 30 days following the Closing Date, to register the resale of the Ordinary Shares included in the Units and Ordinary Shares issuable upon exercise of the Investor Warrants. The Company agreed to use its best efforts to have such registration statement declared effective as promptly as possible after the filing thereof. Holders of the Ordinary Share Warrants, Pre-Funded Warrants, Placement Agent Warrants and Finder Warrants may exercise such warrants on a cashless basis at such time as there is no effective registration statement with respect to the resale of the Ordinary Shares issuable upon exercise thereof.
The foregoing description of the Purchase Agreement, the Pre-Funded Warrants, the Ordinary Share Warrants, the Placement Agent Warrants (and Finder Warrants) and the Registration Rights Agreement is only a summary and is qualified in its entirety by reference to the full text of such agreements, which are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference in response to this Item 3.02.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | | Description |
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| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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 thereunto duly authorized.
| | ENTERA BIO LTD. |
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| By: | /s/ Miranda Toledano |
| | | Name: Miranda Toledano Title: Chief Executive Officer |
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