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SEC Filings

S-3
SEELOS THERAPEUTICS, INC. filed this Form S-3 on 02/01/2019
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We intend to become a leading biopharmaceutical company focused on neurological and psychiatric disorders, including orphan indications. Our business strategy includes:

  • Advancing SLS-002 in suicidality in PTSD and in major depressive disorder;

  • Advancing SLS-006 in early stage and late stage Parkinson's disease as a monotherapy and adjunctive therapy, respectively;

  • Filing an IND for SLS-008 in pediatric esophagitis and another undisclosed indication;

  • Forming strategic collaborations in the European Union and Asian markets; and

  • Acquiring synergistic assets in the central nervous system therapy space through licensing and partnerships.

Private Placement of Common Shares and Warrants

On October 16, 2018, we entered into the SPA with STI and the Buyers, pursuant to which, among other things, (i) STI agreed to sell to the Buyers an aggregate of 1,187,336 shares of STI's common stock (the "Initial STI Shares") and deposit an additional 1,187,336 shares of STI's common stock into escrow for the benefit of the Buyers if 80% of the volume-weighted average trading price of a Common Share on Nasdaq for the first three trading days immediately following the closing date of the transactions is lower than the price paid by the Buyers for the Initial Shares (the "Additional STI Shares", together with the Initial STI Shares the "STI Financing Shares" and, together with the Warrants, the "Purchased Securities"), and (ii) we agreed to issue the Warrants, and the Buyers agreed to purchase the Purchased Securities, for an aggregate purchase price of approximately $18.0 million (the "Purchase Price"). STI issued the STI Financing Shares on January 24, 2019.

Upon the consummation of the Merger, each Initial STI Share was automatically converted into the right to receive a number of Common Shares equal to the exchange ratio (the "Initial Common Shares"). Further, upon consummation of the Merger, each Additional STI Share placed into escrow was automatically converted into the right to receive a number of Common Shares equal to the exchange ratio (the "Converted Additional Shares"). The number of Converted Additional Shares issuable pursuant to the SPA was determined by subtracting (i) the aggregate number of shares of Seelos common stock issued in exchange for the Initial Shares (as adjusted for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, reverse stock splits and similar events) from (ii) the quotient determined by dividing (a) the aggregate Purchase Price by (b) 80% of the average of the volume-weighted average price of a Common Share on Nasdaq for the first three trading days immediately following the closing date of the Pre-Merger Financing (the "Additional Vested Common Shares"). We issued the Warrants on January 31, 2019.

Series A Warrants

The Series A Warrants have an initial exercise price per share equal to $4.15, were immediately exercisable upon issuance and have a term of five years from the date of issuance.

Additionally, every ninth trading day up to and including the 45th trading day (each, a "Reset Date") following (i) each date on which a registration statement registering any Warrant Shares is declared effective or is available for use, (ii) if there is no registration statement registering all of the Warrant Shares, the earlier to occur of (a) the first date on which the holders can sell all the Warrant Shares without restriction or limitation pursuant to Rule 144 under the Securities Act and (b) July 24, 2019 (such earlier date, the "Six Month Reset Date") and (iii) in the event that we (a) fail for any reason to satisfy the requirements of Rule 144(c)(1) under the Securities Act or (b) have ever been an issuer described in Rule 144(i)(1)(i) under the Securities Act or becomes such an issuer in the future, and we fail to satisfy any condition set forth in Rule 144(i)(2) under the Securities Act (each of clauses (a) and (b), a "Public Information Failure") at any time following the Six Month Reset Date, then the earlier to occur of (1) the date the Public Information Failure is cured and no longer prevents the holder from selling all of the Warrant Shares pursuant to Rule 144 without restriction or limitation, (2) the first date on which the holders can sell all the Warrant Shares without restriction or limitation pursuant to Rule 144 under the Securities Act and without the requirement to be in compliance with Rule 144(c)(1), and (3) January 24, 2020 (such 45 trading day period, the "Reset Period" and each such 45th trading day after (i), (ii) or (iii), the "End Reset Date"), the exercise price will be adjusted to be the lesser of (i) the exercise price then in effect and (ii) 125% of 80% of the average of the five lowest volume-weighted average trading prices of a Common Share as quoted on Nasdaq during the applicable Reset Period to date and the number of Common Shares issuable upon exercise of the Series A Warrants will be proportionally increased accordingly, provided that we shall in no event issue Common Shares pursuant to the exercise of the Warrants, in the aggregate, in excess of 15,963,030 (the "Warrant Issuance Cap"). In the event that we are unable to issue Common Shares pursuant to an exercise of Warrants due to the application of the Warrant Issuance Cap, we will pay to the exercising holder an amount in cash per share equal to the difference between the last closing trade price of Common Shares and the applicable exercise price, to the extent not previously paid to us.

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