Item 1.01 Entry into a Material Definitive Agreement.
On February 3, 2021, Iterum Therapeutics plc (the “Company”) entered into an amended and restated underwriting agreement (the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), to issue and sell in an upsized firm commitment offering 34,782,609 ordinary shares of the Company, $0.01 nominal value per share (the “Shares”), in a firm commitment underwritten public offering with a public offering price of $1.15 per Share (the “Offering”). Wainwright has agreed to purchase the Shares from the Company at a price of $1.0695 per Share. In addition, the Company granted Wainwright an option for a period of 30 days to purchase up to an additional 5,217,391 ordinary shares on the same terms and conditions.
The Company estimates that the net proceeds from the Offering will be approximately $36.6 million, or approximately $42.1 million if Wainwright exercises in full its option to purchase additional Shares, in each case after deducting underwriting discounts and commissions and estimated offering expenses.
The Underwriting Agreement contains customary representations and warranties of the Company, termination rights of the parties, and certain indemnification obligations of the Company and ongoing covenants of the Company, including a prohibition on issuance of ordinary shares or securities convertible or exchangeable into ordinary shares by the Company for a period of 60 days after the closing of the Offering and a prohibition on the Company entering into variable rate transactions for a period of 12 months after the closing of the Offering, in each case subject to certain exceptions. The Underwriting Agreement also provides for a prohibition on the disposition of ordinary shares or securities convertible or exchangeable into ordinary shares by the Company’s directors and executive officers, for a period of 60 days after the date of the Underwriting Agreement, subject to certain exceptions.
The representations, warranties and covenants contained in the Underwriting Agreement were made only for the purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
The Shares and the Underwriter Warrants (as defined below) will be issued pursuant to a registration statement on Form S-3 that was initially filed with the Securities and Exchange Commission (“SEC”) on July 5, 2019 and declared effective on July 16, 2019 (File No. 333-232569). A prospectus supplement relating to the Offering has been filed with the SEC.
In accordance with the terms of the Underwriting Agreement, the Company has agreed to pay Wainwright a management fee of $140,000, which represents 0.35% of the gross proceeds of the Offering, and $12,900 for Wainwright’s clearing expenses, as well as reimburse Wainwright for its reasonable and documented out-of-pocket expenses incurred in connection with the Offering, including its legal expenses, in an amount of $90,000.
Pursuant to the Underwriting Agreement, the Company agreed to issue to Wainwright’s designees underwriter warrants (the “Underwriter Warrants”) to purchase 2,434,783 ordinary shares, which represents a number of ordinary shares equal to 7.0% of the aggregate number of Shares sold in the Offering. To the extent Wainwright exercises its option to purchase additional ordinary shares under the Underwriting Agreement, the Company has agreed to issue additional Underwriter Warrants equal to 7.0% of the additional ordinary shares purchased by Wainwright. The Underwriter Warrants have an exercise price of $1.4375 per ordinary share. The Underwriter Warrants are exercisable upon issuance and expire February 3, 2026.
The descriptions of terms and conditions of the Underwriting Agreement and the Underwriter Warrants set forth herein do not purport to be complete and are qualified in their entirety by the full text of the Underwriting Agreement and Form of Underwriting Warrant, which are filed as Exhibits 1.1 and 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
A copy of the legal opinion of A&L Goodbody as to the legality of the Shares is attached as Exhibit 5.1 hereto and a copy of the legal opinion of Wilmer Cutler Pickering Hale and Dorr, LLP as to the legality of the Underwriter Warrants is attached as Exhibit 5.2 hereto.
