Warrant Exchange and Warrant Exercise
As of December 31, 2018, the outstanding warrants to purchase shares of Class A common stock consisted of the following:
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December 31, 2018 |
Date Exercisable | | Number of
Warrants | | | Number of
Shares
Issuable | | | Exercise
Price | | | Exercisable
for | | | Classification | | | Expiration |
November 3, 2010 | | | 109,620 | | | | 109,620 | | | $ | 3.95 | | | | Common Stock | | | | Equity | | | Later of 8/31/2019 or upon repayment of the notes payable |
August 31, 2013 | | | 36,540 | | | | 36,540 | | | $ | 3.95 | | | | Common Stock | | | | Equity | | | Later of 8/31/2019 or upon repayment of the notes payable |
August 31, 2015 | | | 36,540 | | | | 36,540 | | | $ | 3.95 | | | | Common Stock | | | | Equity | | | Later of 8/31/2019 or upon repayment of the notes payable |
December 10, 2018 | | | 4,100,000 | | | | 2,050,000 | | | $ | 11.50 | | | | Common Stock | | | | Equity | | | December 10, 2023 |
December 10, 2018 | | | 31,000,000 | | | | 15,500,000 | | | $ | 11.50 | | | | Common Stock | | | | Equity | | | December 10, 2023 |
| | | | | | | | | | | | | | | | | | | | | | |
| | | 35,282,700 | | | 17,732,700 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
On July 22, 2019, the Company made an exchange offer (the “Exchange Offer”) to all holders of the Company’s 30,890,748 outstanding warrants, that were issued in connection with the Company’s initial public offering pursuant to a prospectus dated October 10, 2016 (the “Public Warrants”), to exchange 0.095 shares of Class A common stock for each Public Warrant tendered. On August 16, 2019, the expiration date of the Exchange Offer, a total of 29,950,150 warrants were tendered, resulting in the issuance of 2,845,280 shares of common stock.
On August 19, 2019, the Company executed an amendment to the warrant agreement, dated October 10, 2016, governing its outstanding Public Warrants to provide the Company with the right to require the Public Warrants holders to exchange one share of their Public Warrant for 0.0855 shares of the Company’s Class A common stock. Pursuant to the amendment, the Company issued 80,451 additional shares in exchange for all remaining untendered Public Warrants.
Pursuant to the terms of the Company’s previously announced Warrant Exchange Agreement dated July 12, 2019 with the PIPE Investors, the Company issued an aggregate of 389,501 shares of Class A common stock, to the PIPE Investors, at the same exchange ratio offered to the Public Warrant holders in the Exchange Offer, in exchange for an aggregate of 4,100,000 private placement warrants.
On August 13, 2019, the Company’s prior lenders net exercised outstanding warrants to purchase an aggregate of 182,700 shares of the Company’s Class A common stock at an exercise price of $3.95 per share. The Company issued an aggregate of 19,426 shares of common stock in connection with this net exercise.
As a result of these transactions, the Company issued an aggregate of 3,334,658 shares of common stock, representing approximately 3% of the total Class A common stock outstanding after such issuances.
In addition, in the first quarter of 2019, the Company issued 54,626 shares of common stock in connection with some Public Warrant holders’ exercise of Public Warrants and received cash proceeds of $628. As of December 31, 2019, no warrants were outstanding.
As the fair value of the warrants exchanged in the warrant exchange transactions immediately prior to the exchanges was less than the fair value of the common stock issued, the Company recorded anon-cash deemed dividend of $645 for the incremental fair value provided to the warrant holders in the year ended December 31, 2019.
Underwritten Public Offering
On November 21, 2019, the Company entered into an underwriting agreement, with Credit Suisse Securities (USA) LLC and SVB Leerink, as representatives of the underwriters, with respect to a public offering (the “Underwritten Public Offering”) of 9,000,000 shares of the Company’s Class A common stock, par value $0.0001 per share, at a price per share to the public of $5.00, less underwriting discounts and commissions. The Company also granted the underwriters an option to purchase up to an additional 1,350,000 shares of common stock within thirty days after November 21, 2019 at the public offering price, less underwriting discounts and commissions to cover any over-allotments made by the underwriters in the sale and distribution of the Company’s common stock.
In Connection with the Underwritten Public Offering, the Company entered into a fee letter agreement (the “Letter Agreement”) with Avista Capital Partners IV, L.P. (“Avista IV”), Avista Capital Partners (Offshore) IV, L.P. (“Avista IV Offshore” and together with Avista IV, the “Avista Funds”) and Avista Capital Holdings, L.P., an affiliate of the Avista Funds (the “Management Company”), pursuant to which the Company agreed to pay the Management Company a fee in consideration for certain services rendered in connection with the Avista Funds’ purchase of the Company’s Class A common stock in the Underwritten Public Offering. The fee paid to the Management Company was equal to the fee paid to the underwriters on aper-share basis for the third party funds raised. The Avista Funds purchased 6,000,000 shares of Class A common stock and the Company paid the Management Company a fee equal to $1,725. Joshua Tamaroff, one of the Company’s directors, is an employee of the Management Company to which the Company paid this fee.
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