| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 1, 2024, Gritstone bio, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with TD Securities (USA) LLC and Evercore Group L.L.C., as representatives of the several underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell (i) 8,333,333 shares of common stock (“Shares”) and accompanying common warrants (the “Accompanying Warrants”) to purchase up to 8,333,333 shares of common stock at a per share exercise price of $1.65 (the “Accompanying Warrant Shares”) (provided, however, that the purchaser may elect to exercise the Accompanying Warrants for pre-funded warrants (the “Accompanying Pre-Funded Warrants”) to purchase shares of common stock (the “Accompanying Pre-Funded Warrant Shares”) in lieu of shares of common stock at an exercise price of $1.65 minus $0.0001, the exercise price of each Accompanying Pre-Funded Warrant), at a combined purchase price of $1.50 per Share and Accompanying Warrant, and (ii) to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 13,334,222 shares of common stock at a per share exercise price of $0.0001 (the “Initial Pre-Funded Warrants” and together with the Accompanying Warrants and Accompanying Pre-Funded Warrants, the “Warrants” and collectively with the Shares, Accompanying Warrant Shares and Accompanying Pre-Funded Warrant Shares, the “Securities”) and Accompanying Warrants to purchase up to 13,334,222 Accompanying Shares or up to 13,334,222 Accompanying Pre-Funded Warrants, at a combined purchase price of $1.4999 per Initial Pre-Funded Warrant and Accompanying Warrant, which represents the per share combined purchase price for the Shares and Accompanying Warrants less the $0.0001 per share exercise price for each such Initial Pre-Funded Warrant.
The Accompanying Warrants are immediately exercisable and will expire on the twelve-month anniversary of the date of issuance. The Initial Pre-Funded Warrants and Accompanying Pre-Funded Warrants are exercisable at any time after the date of issuance and each expire on the date such warrant is exercised in full. A holder of Initial Pre-Funded Warrants or Accompanying Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. A holder of the Accompanying Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. A holder of Warrants may increase or decrease these percentages by providing at least 61 days’ prior notice to the Company.
The Underwriting Agreement contains customary representations and warranties, conditions to closing, market standoff provisions, termination provisions and indemnification obligations, including for liabilities under the Securities Act of 1933, as amended. The Offering is being made pursuant to the registration statement on Form S-3 (File No. 333-263455) (the “Registration Statement”) that was filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 10, 2022 and declared effective on May 6, 2022, and a related prospectus supplement.
The Company estimates that the gross proceeds from the Offering will be approximately $32.5 million, before deducting underwriting discounts and commissions and estimated Offering expenses. The Company expects the Offering to close on April 4, 2024, subject to customary closing conditions.
The Underwriting Agreement is filed as Exhibit 1.1 to this Current Report on Form 8-K, and the foregoing description of the terms of the Underwriting Agreement is qualified in its entirety by reference to such exhibit. The forms of Accompanying Warrant and Initial Pre-Funded Warrant are filed as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-K, and the foregoing description of the terms of the Warrants is qualified in its entirety by reference to such exhibits. A copy of the opinion of Fenwick & West LLP, relating to the validity of the Securities in connection with the Offering, is filed as Exhibit 5.1 to this Current Report on Form 8-K and is incorporated by reference into the Registration Statement.
