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SEC Filings

8-K
SEELOS THERAPEUTICS, INC. filed this Form 8-K on 02/06/2019
Entire Document
 

Item 1.01    Entry into a Material Definitive Agreement.

As previously reported by Seelos Therapeutics, Inc. (the "Company") in its Current Reports on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on each of October 17, 2018, November 16, 2018 and January 16, 2019, the Company entered into a Securities Purchase Agreement dated as of October 16, 2018, by and among the Company, the Delaware corporation that was previously known as "Seelos Therapeutics, Inc." and the buyers listed on the signature pages attached thereto (the "Investors"), as amended (the "Securities Purchase Agreement").

On January 31, 2019, pursuant to the terms of the Securities Purchase Agreement, the Company issued warrants (the "Warrants") to purchase an aggregate of 1,463,519 shares of its common stock, par value $0.001 per share ("Common Stock") to the Investors. The Warrants are comprised of two series of warrants, the Series A Warrants to Purchase Common Stock (the "Series A Warrants") and the Series B Warrants to Purchase Common Stock (the "Series B Warrants"). The Series A Warrants are initially exercisable for an aggregate of 1,463,519 shares of Common Stock and the Series B Warrants are initially not exercisable for any shares of Common Stock.

The Series A Warrants have an initial exercise price of $4.15, were immediately exercisable upon issuance and have a term of five years from the date of issuance. The Series A Warrants provide that, for the first three years following the issuance of the Series A Warrants, if the Company issues or sells, or is deemed to have issued or sold, any shares of Common Stock for a price per share lower than the exercise price then in effect, subject to certain limited exceptions, then the exercise price of the Series A Warrants shall be reduced to such lower price per share. If the Company issues or sells, or is deemed to have issued or sold any shares of Common Stock for a price per share lower than the exercise price then in effect after the first three years following the issuance of the Series A Warrants, subject to certain limited exceptions, then the exercise price of the Series A Warrants shall be reduced to an amount equal to the product of (i) the exercise price then in effect and (ii) the quotient determined by dividing (a) the sum of (x) the product derived by multiplying the exercise price then in effect and the number of shares of Common Stock outstanding immediately prior to the new issuance plus (y) the consideration received by the Company for the new issuance, by (b) the product derived by multiplying (1) the exercise price then in effect by (2) the number of shares of Common Stock outstanding immediately after the new issuance. In addition, the exercise price and the number of shares of Common Stock issuable upon exercise of the Series A Warrants will also be subject to adjustment in connection with stock splits, dividends or distributions or other similar transactions.

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 shares of Common Stock underlying the Warrants ("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 of 1933, as amended (the "Securities Act"), and (b) July 24, 2019 (such earlier date, the "Six Month Reset Date") and (iii) in the event that the Company (a) fails for any reason to satisfy the requirements of Rule 144(c)(1) under the Securities Act or (b) has ever been an issuer described in Rule 144(i)(1)(i) under the Securities Act or becomes such an issuer in the future, and the Company fails 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 share of Common Stock as quoted on the Nasdaq Capital Market during the applicable Reset Period to date and the number of shares of Common Stock issuable upon exercise of the Series A Warrants will be proportionally increased accordingly, provided that the Company shall in no event issue shares of Common Stock pursuant to the exercise of the Warrants, in the aggregate, in excess of 15,963,030 (the "Warrant Issuance Cap"). In the event that the Company is unable to

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