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SEC Filings

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

issue shares of Common Stock pursuant to an exercise of Warrants due to the application of the Warrant Issuance Cap, the Company will pay to the exercising holder an amount in cash per share equal to the difference between the last closing trade price of the Common Stock and the applicable exercise price, to the extent not previously paid to the Company.

Pursuant to the Series A Warrants, the Company agreed not to enter into, allow or be party to certain fundamental transactions, generally including any merger with or into another entity, sale of all or substantially all of the Company's assets, tender offer or exchange offer, or reclassification of the Common Stock (a "Fundamental Transaction") until the Reservation Date. Thereafter, the Company agreed not to enter into or be party to a Fundamental Transaction unless the successor entity in such transaction assumes in writing all of the Company's obligations under the Series A Warrants, upon which the Series A Warrants shall become exercisable for shares of Common Stock, shares of the common stock of the successor entity or the consideration that would have been issuable to the holders had they exercised the Series A Warrants prior to such Fundamental Transaction, at the holders' election. Additionally, if the successor entity is a publicly traded corporation, the holders may elect to receive an equivalent security of the successor entity, in exchange for the Series A Warrants. Any security issuable or potentially issuable to the holder pursuant to the terms of the Series A Warrants on the consummation of a Fundamental Transaction must be registered and freely tradable by the holder without any restriction or limitation or the requirement to be subject to any holding period pursuant to any applicable securities laws.

Additionally, at the request of a holder delivered before the 90th day after the consummation of a Fundamental Transaction, the Company or the successor entity must purchase such holder's Warrant for the value calculated using the Black-Scholes option pricing model as of the day immediately following the public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated.

The Series A Warrants also contain a "cashless exercise" feature that allows the holders to exercise the Series A Warrants without making a cash payment in the event that there is no effective registration statement registering the shares issuable upon exercise of the Series A Warrants. The Series A Warrants are subject to a blocker provision which restricts the exercise of the Series A Warrants if, as a result of such exercise, the holder, together with its affiliates and any other person whose beneficial ownership of shares of Common Stock would be aggregated with the holder's for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), would beneficially own in excess of 4.99% or 9.99% of the outstanding shares of Common Stock (including the shares of Common Stock issuable upon such exercise), as such percentage ownership is determined in accordance with the terms of the Series A Warrants.

The Series B Warrants have an exercise price of $0.001, were immediately exercisable upon issuance and will expire on the day following the later to occur of (i) the Reservation Date, and (ii) the date on which the Series B Warrants have been exercised in full (without giving effect to any limitation on exercise contained therein) and no shares remain issuable thereunder. The Series B Warrants are initially exercisable for no shares of Common Stock. On each Reset Date, the number of shares of Common Stock issuable upon exercise of the Series B Warrants shall be increased to the number (if positive) obtained by subtracting (i) 1,829,406 from (ii) the quotient determined by dividing (a) the pro rata portion of the purchase price paid by such holder pursuant to the Securities Purchase Agreement by (b) 80% of the average of the five lowest volume-weighted average trading price of a share of Common Stock as quoted on the Nasdaq Capital Market during the applicable Reset Period to date, 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 the Warrant Issuance Cap. In the event that the Company is unable to issue shares of Common Stock pursuant to an exercise of Warrants due to the application of the Warrant Issuance Cap, the Company will pay to the exercising holder an amount in cash per share equal to the difference between the last closing trade price of the Common Stock and the applicable exercise price, to the extent not previously paid to the Company.

Pursuant to the Series B Warrants, the Company also agreed not to enter into, allow or be party to a Fundamental Transaction until the Reservation Date. Thereafter, the Company agreed not to enter into or be party to a Fundamental Transaction unless the successor entity in such transaction assumes in writing all of the Company's obligations under the Series B Warrants, upon which the Series B Warrants shall become exercisable for shares of Common Stock, shares of the common

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