Section 1.01 Entry into Material Definitive Agreement
In consideration for entering into the Purchase Agreement, the Company agreed to issue 230,414 shares of common stock (the “Initial Commitment Shares”) to Lincoln Park as an Initial Commitment Fee. The Company will not receive any cash proceeds from the issue of Commitment Shares.
Upon signing the Purchase Agreement and Registration Rights Agreement on
Under the Purchase Agreement, on any business day after
January 14, 2022selected by the Company over the 36-month term of the Purchase Agreement (each, a "Purchase Date"), the Company may direct Lincoln Park to purchase up to 50,000 shares of Common Stock on such Purchase Date (a "Regular Purchase") if the closing sale price per share of the Common Stock on the Nasdaq Capital Market is not below $1.00on the applicable Purchase Date; provided, however, that (i) a Regular Purchase may be increased to up to 75,000 shares, if the closing sale price per share of the Common Stock on Nasdaq is not below $7.50on the applicable Purchase Date; and (ii) a Regular Purchase may be increased to up to 100,000 shares, if the closing sale price per share of the Common Stock on Nasdaq is not below $10.00on the applicable Purchase Date. In any case, Lincoln Park's maximum obligation under any single Regular Purchase will not exceed $2,000,000, unless the Company and Lincoln Park mutually agree to increase the maximum amount of such Regular Purchase. The above-referenced share amount limitations and closing sale price thresholds are subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the Purchase Agreement. The purchase price per share for each such Regular Purchase will be equal to the lesser of: •the lowest sale price for the Common Stock on the Nasdaq Capital Market on the date of sale; and •the average of the three lowest closing sale prices for the Common Stock on the Nasdaq Capital Market during the 10 consecutive business days ending on the business day immediately preceding the purchase date. The Company also has the right to direct Lincoln Park, on any business day on which the Company has properly submitted a Regular Purchase notice for the maximum amount the Company is then permitted to sell to Lincoln Park in such Regular Purchase, to purchase an additional amount of the Common Stock (an "Accelerated Purchase") of up to the lesser of: •300% of the number of shares to be purchased pursuant to such Regular Purchase; and •30% of the aggregate shares of the Common Stock traded on the Nasdaq CapitalMarket during all or, if certain trading volume or market price thresholds specified in the Purchase Agreement are crossed on the applicable Accelerated Purchase date, the portion of the normal trading hours on the applicable Accelerated Purchase date prior to such time that any one of such thresholds is crossed, which period of time on the applicable Accelerated Purchase date is referred to as the Accelerated Purchase Measurement Period.
The parties may mutually agree to increase the number of shares to be purchased by Lincoln Park under any accelerated purchase.
The purchase price per share for each such Accelerated Purchase will be equal to 97% of the lessor of: •the volume-weighted average price of the Common Stock on the
Nasdaq CapitalMarket during the applicable Accelerated Purchase Measurement Period on the applicable Accelerated Purchase date; and •the closing sale price of the Common Stock on the Nasdaq Capital Market on the applicable Accelerated Purchase date.
The Company also has the right to direct Lincoln Park on any Business Day on which an Accelerated Purchase has been made and all Shares to be purchased thereunder have been properly delivered to Lincoln Park in accordance with the Purchase Agreement to purchase an additional amount of Common Shares (an “Additional Accelerated Purchase”) up to the lesser of: • 300% of the number of shares purchased under the applicable corresponding Regular Purchase; and • 30% of the total common stock traded on the Nasdaq Capital Market throughout the term or, if certain trading volume or market price thresholds specified in the purchase agreement are exceeded on the date of purchase applicable Additional Accelerated Purchase Date, the portion of the normal course trading hours on the applicable Additional Accelerated Purchase Date prior to the time any such threshold is crossed, which period on the applicable Additional Accelerated Purchase Date is referred to as the additional expedited purchase measure.
The parties may mutually agree to increase the number of shares to be purchased by Lincoln Park pursuant to any additional accelerated purchase.
The Company may, in its sole discretion, submit multiple additional Accelerated Purchase Notices to Lincoln Park on a single Accelerated Purchase Date, provided that all previous Accelerated Purchases and additional Accelerated Purchases (including those that occurred earlier the same day) have been completed. and all shares to be purchased hereunder have been properly delivered to Lincoln Park in accordance with the purchase agreement.
The purchase price per share for each such Additional Accelerated Purchase will be equal to 97% of the lower of: the volume-weighted average price of the Common Shares on the Nasdaq capital market during the Measurement Period applicable Supplemental Accelerated Purchase on the applicable Supplemental Market Accelerated Purchase Date; and • the closing sale price of the common stock on the Nasdaq Capital Market on the applicable additional accelerated purchase date.
In the case of regular purchases, accelerated purchases and additional accelerated purchases, the purchase price per share will be adjusted equitably for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the business days used to calculate the purchase price. Other than as described above, there are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of any stock sales. ordinary in Lincoln Park.
The purchase agreement prohibits the company from directing Lincoln Park to purchase common stock if such stock, when aggregated with all other common stock then beneficially owned by Lincoln Park (as calculated in accordance in Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder), would cause
Under applicable Nasdaq capital market rules, the Company may not issue or sell to Lincoln Park under the purchase agreement more than 19.99% of the outstanding common stock immediately prior to the execution of the agreement. (the “Exchange Cap”) (or 5,622,718 shares, based on 28,127,657 shares outstanding immediately prior to the signing of the purchase agreement), unless (i) the Company obtains shareholder approval to issue common stock in excess of the exchange cap to Lincoln Park pursuant to the purchase agreement pursuant to applicable Nasdaq rules or (ii) the average price of all applicable sales of common stock at Lincoln Park under the Purchase Agreement is equal to or greater than
The Purchase Agreement does not limit the Company’s ability to raise capital from other sources at its sole discretion, except that, subject to certain exceptions, for a period specified in the Purchase Agreement, the Company will not may enter into no line of credit or similar continuing offer other than with Lincoln Park, excluding a “market offering” of common stock exclusively through one or more registered broker-dealers.
The Purchase Agreement and the Recording Rights Agreement each contain customary representations, warranties and covenants of the Company and Lincoln Park, indemnification rights and other obligations of the parties. The offer of common shares under the purchase agreement will end on the date on which all the shares offered by the purchase agreement have been sold or, if earlier, on the expiration or termination of the purchase contract. The Company has the right to terminate the Purchase Agreement at any time, without charge, penalty or cost to the Company.
Lincoln Park has agreed not to induce or engage in any direct or indirect short selling or hedging of the common stock.
The total net proceeds under the purchase agreement for the Company will depend on the frequency and the prices at which the common shares are sold at Lincoln Park. Actual sales of common stock to Lincoln Park under the Purchase Agreement and the amount of such net proceeds will depend on various factors to be determined by the Company from time to time, including (among other things) market conditions, the trading price of the Common Shares and the decisions of the Company as to other sources of financing available and appropriate for the Company. The Company expects to use any proceeds from the sale of the Purchase Shares to expand its product portfolio, for working capital and for general corporate purposes.
The issuance of the Buy Shares and Pledge Shares has been registered pursuant to the Company’s effective prior registration statement on Form S-3 (File No. 333-242372) (the “Registration Statement ”) and the related base prospectus included in the Registration Statement Statement, supplemented by a prospectus supplement filed on
The foregoing is a summary description of certain terms of the Purchase Agreement and the Registration Rights Agreement and, by its nature, is incomplete. Copies of the Purchase Agreement and the Recording Rights Agreement are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference. The foregoing descriptions of the Purchase Agreement and the Recording Rights Agreement are qualified in their entirety by reference to these exhibits.
The Purchase Agreement and the Recording Rights Agreement contain customary representations and warranties, covenants and indemnification provisions that the parties have made to each other and solely for their mutual benefit in the context of all the terms and conditions of these agreements and within the framework of the specific relationship between the parties. The provisions of the Purchase Agreement and the Registration Rights Agreement, including the representations and warranties contained therein, do not inure to the benefit of any party other than the parties and are not intended to serve as documents enabling investors and the public to obtain factual information about the state of affairs of the parties thereto. Investors and the public should instead consult other information contained in the annual, quarterly and current reports of the Company which the Company may file with the
The information contained in this current report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy the common stock discussed herein, and there will be no offer, solicitation or sale of the stock in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
This current report on Form 8-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the potential offering of securities under the purchase agreement, and other statements containing the words “expect”, “intend”, “may “, “will” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements due to various important factors, including uncertainties related to market conditions, the uncertainties inherent in the conduct of ongoing and planned clinical trials, and such other factors as set forth under the heading “Risk Factors” in
the company’s quarterly report on Form 10-Q for the quarter ended
Item 9.01 Financial Statements and Exhibits. Exhibit No. Description 5.1 Opinion of
Cooley LLP. 10.1 Purchase Agreement, dated as of January 14, 2022, by and between X4 Pharmaceuticals, Inc.and Lincoln Park Capital Fund, LLC. 10.2 Registration Rights Agreement, dated as of January 14, 2022, by and between X4 Pharmaceuticals, Inc.and Lincoln Park Capital Fund, LLC. 23.1 Consent of Cooley LLP(contained in Exhibit 5.1). 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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