UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 4, 2024
| QUOIN PHARMACEUTICALS LTD. |
| (Translation of registrant’s name into English) |
| State of Israel | | 001-37846 | | 92-2593104 |
(State or other jurisdiction
of incorporation) | | (Commission File Number) | | (I.R.S. Employer
Identification No.) |
42127 Pleasant Forest Court Ashburn, VA | | 20148-7349 |
| (Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (703) 980-4182
| Not applicable |
| (Former name or former address, if changed since last report) |
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):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| American Depositary Shares, each representing one (1) Ordinary Share, no par value per share | | QNRX | | The Nasdaq Stock Market LLC |
| Ordinary Shares, no par value per share* | | | | N/A |
| * | Not for trading, but only in connection with the registration of the American Depositary Shares pursuant to requirements of the Securities and Exchange Commission. |
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).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. Entry into a Material Definitive Agreement.
On March 7, 2024, Quoin Pharmaceuticals Ltd. (the “Company”), completed a public offering (the “Offering”) of approximately $6.5 million of the following securities: (i) 811,250 ordinary shares, no par value, of the Company (“Ordinary Shares”) represented by American Depositary Shares (“ADSs”), (ii) 4,062,500 Series D warrants (the “Series D Warrants”) to purchase 4,062,500 Ordinary Shares represented by ADSs (the “Series D Warrant ADSs”), (iii) 4,062,500 Series E warrants (the “Series E Warrants” and together with the Series D Warrants, the “Warrants”) to purchase 4,062,500 Ordinary Shares represented by ADSs (the “Series E Warrant ADSs”) and (iv) 3,251,250 pre-funded warrants (the “Pre-Funded Warrants”) to purchase 3,251,250 Ordinary Shares represented by ADSs (the Pre-Funded Warrant ADSs”). The ADSs, Series D Warrants, Series E Warrants, Pre-Funded Warrants, Series D Warrant ADSs, Series E Warrant ADSs and Pre-Funded Warrant ADSs are collectively referred to herein as the “Securities.”
Each ADS (or Pre-Funded Warrant to purchase one ADS in lieu thereof) was sold together with a Series D Warrant to purchase one ADS and a Series E Warrant to purchase one ADS. The ADSs and accompanying Warrants were sold at a combined public offering price of $1.60 and the Pre-Funded Warrants and accompanying Warrants were sold at a combined public offering price of $1.5999, which is equal to the combined purchase price per ADS and accompanying Warrants, minus the exercise price of each Pre-Funded Warrant of $0.0001.
In connection with the Offering, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) dated March 4, 2024, with certain institutional investors signatory thereto (the “Investors,” and each an “Investor”), pursuant to which the Company agreed to issue and sell to such investors, certain of the ADSs, Pre Funded-Funded Warrants and Warrants sold in the Offering. The Purchase Agreement contains customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification obligations of the Company and the Investors signatory thereto, including for liabilities under the Securities Act of 1933, as amended (the “Securities Act”), other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Purchase Agreement were made only for 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. Pursuant to the terms of the Purchase Agreement, the Company agreed, subject to certain exceptions, (i) to not enter into variable rate financings for a period of 180 days following the closing of the Offering, and (ii) to not enter into any equity financings for 90 days from closing of the Offering.
An Investor (together with its affiliates) may not exercise any portion of the Warrants or Pre-Funded Warrants to the extent that the Investor would own more than 4.99% (or, at the Investor’s option upon issuance, 9.99%) of the Company’s outstanding Ordinary Shares immediately after exercise. However, upon prior notice from the Investor to the Company, an Investor may increase or decrease the amount of ownership of outstanding Ordinary Shares up to 9.99% of the number of the Company’s Ordinary Shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Securities Exchange Act of 1934, as amended , provided that any increase shall not be effective until 61 days following notice to the Company.
The Securities were offered and sold by the Company pursuant to the Company’s Registration Statement on Form S-1 (Registration No. 333-277016) (as amended through the date hereof), filed by the Company with the U.S. Securities and Exchange Commission under the Securities Act.
A.G.P./Alliance Global Partners acted as the exclusive placement agent (the “Placement Agent”) for the Company in connection with the Offering. Pursuant to that certain placement agency agreement, dated March 4, 2024, by and between the Company and the Placement Agent (the “Placement Agency Agreement”), the Placement Agent was paid a cash fee of 7.0% of the aggregate gross proceeds to the Company from the sale of the ADSs, Pre Funded-Funded Warrants and Warrants in the Offering and the Company reimbursed the Placement Agent for (i) non-accountable expenses in an amount of 1.0% of the aggregate gross proceeds raised in the Offering and (ii) accountable expenses of the Placement Agent of $125,000 related to the legal fees. The Placement Agent and certain of its affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for the Company and its affiliates, for which they received or will receive customary fees and expenses.
The Pre-Funded Warrants are immediately exercisable upon issuance, have an exercise price of $0.0001 per share and may be exercised at any time until exercised in full. After the closing of the Offering on March 7, 2024, a total of 1,297,500 ADSs were issued upon the exercise of Pre-Funded Warrants, resulting in a total of 1,953,750 Pre-Funded Warrants that remain outstanding. The Series D Warrants and the Series E Warrants have an exercise price of $1.60 per share and are immediately exercisable. The Series D Warrants will expire two (2) years from the date of issuance and the Series E Warrants will expire five (5) years from the date of issuance. There is not expected to be any trading market for the Pre-Funded Warrants or the Warrants issued in the Offering.
The exercise price of the Pre-Funded Warrants and the Warrants, and the number ADSs issuable pursuant to the Pre-Funded Warrants and the Warrants will be subject to adjustment in the event of any stock dividend or split, reorganization or similar event, as described in the Pre-Funded Warrants or Warrants. In the event of a fundamental transaction, as described in the Warrants and generally including any reorganization, recapitalization or reclassification of our ADSs, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding ADSs, the holders of the Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants immediately prior to such fundamental transaction. Additionally, in the event of a fundamental transaction, we or any successor entity will, at the option of the holder of a Warrant exercisable at any time concurrently with or within 30 days after the consummation of the fundamental transaction (or, if later, the date of the public announcement thereof), purchase the Warrant from the holder by paying to the holder an amount of consideration equal to the value of the remaining unexercised portion of such Warrant on the date of consummation of the fundamental transaction based on the Black-Scholes option pricing model, determined pursuant to a formula set forth in the Warrants. The consideration paid to the holder will be the same type or form of consideration that was offered and paid to the holders of Ordinary Shares in connection with the fundamental transaction; provided that if no such consideration was offered or paid, the holders of ordinary shares will be deemed to have received ordinary shares of the successor entity in such fundamental transaction for purposes of this provision of the Warrants.
On March 7, 2024, the Company also entered into privately negotiated agreements with the holders of certain existing outstanding warrants to purchase up to 638,834 ADSs (the “Prior Warrants”) to, among other things, reduce the exercise price of such Prior Warrants to $1.60 and to extend the current expiration date of the Prior Warrants until March 7, 2029.
The foregoing summaries of the Offering, the Securities issued in the Offering, the Purchase Agreement, the Placement Agency Agreement, the Pre-Funded Warrants, the Series D Warrants, the Series E Warrants and the Warrant Amendments, do not purport to be complete and are qualified in their entirety by reference to the definitive transaction documents, copies of which are attached hereto as Exhibits 10.1, 1.1, 4.1, 4.2, 4.3, and 4.4, respectively, and are each incorporated herein by reference.
Item 8.01. Other Events.
On March 4, 2024, the Company issued a press release announcing that it had received clearance from the U.S. Food and Drug Administration to recruit teen subjects into its two ongoing clinical trials for QRX003, which is being developed as a potential treatment for Netherton Syndrome. Both trials are being conducted under the Company’s open Investigational New Drug Application (IND) for QRX003. All current clinical endpoints for both trials will remain the same. A copy of the press release is filed as Exhibit 99.1 to this Report and is incorporated by reference herein.
On March 5, 2024, the Company issued a press release announcing the pricing of the Offering. A copy of the press release is filed as Exhibit 99.2 to this Report and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed with this Current Report on Form 8-K:
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, hereunto duly authorized.
| Date: March 8, 2024 | QUOIN PHARMACEUTICALS LTD. |
| | |
| | |
| | By: | /s/ Gordon Dunn |
| | Name: | Gordon Dunn |
| | Title: | Chief Financial Officer |
