| Item 1.01 | Entry into a Material Definitive Agreement. |
Securities Purchase Agreement
On February 13, 2023, Disc Medicine, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with the investors identified therein. Pursuant to the Purchase Agreement, the Company agreed to sell and issue to the investors in a registered direct offering (the “Offering”) (i) an aggregate of 1,488,166 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), at a purchase price of $23.00 per Share, and (ii) with respect to certain investors, in lieu of Shares, pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 1,229,224 shares of Common Stock, at a purchase price of $22.9999 per Pre-Funded Warrant.
The price per Pre-Funded Warrant represents the price per Share to be sold in the Offering, minus the $0.0001 per share exercise price of each such Pre-Funded Warrant. Each Pre-Funded Warrant will have an exercise price equal to $0.0001 per share. The Pre-Funded Warrants are exercisable at any time after their original issuance and will not expire until exercised in full.
The Pre-Funded Warrants to be issued in the Offering will provide that a holder of Pre-Funded Warrants will not have the right to exercise any portion of its Pre-Funded Warrants if such holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that each holder may increase or decrease the Beneficial Ownership Limitation by giving 61 days’ notice to the Company, but not to any percentage in excess of 19.99%.
The Offering is expected to close on or about February 15, 2023, subject to the satisfaction of certain customary closing conditions. The Company expects to receive aggregate gross proceeds from the Offering of approximately $62.5 million, before deducting estimated offering expenses payable by the Company. The Company expects the net proceeds from the Offering to be used to fund research and clinical development of the Company’s current or additional product candidates, and the remainder for working capital and other general corporate purposes, which may include an in-license, acquisition or investment in complementary businesses or technologies.
The representations, warranties and covenants contained in the Purchase Agreement were made only for the purpose of such agreement and as of specific dates, were solely for the benefit of the parties to the Purchase Agreement and may be subject to limitations agreed upon by the parties thereto.
The shares of Common Stock and Pre-Funded Warrants were offered by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-269272), as amended, which was declared effective by the Securities and Exchange Commission on January 24, 2023.
The foregoing descriptions of the Purchase Agreement and the Pre-Funded Warrants do not purport to be complete and are qualified in their entirety by reference to such agreements, copies of which are filed as Exhibits 10.1 and 4.1 hereto, respectively, and incorporated by reference herein.
A copy of the legal opinion of Goodwin Procter LLP relating to the validity of the Shares and the Pre-Funded Warrants issued in the Offering is filed as Exhibit 5.1 to this Current Report on Form 8-K and incorporated herein by reference.
Forward-Looking Statements
This Item 1.01 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, statements regarding Disc’s anticipated use of net proceeds from the offering, statements regarding the completion and timing of the offering, development of and regulatory status of the Company’s product candidates, potential for in-licensing, acquisitions or investments in complementary businesses or technologies, and the Company’s strategy, business plans and focus. The words “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “target” and similar expressions are intended to identify forward-
