Item 1.01 Entry into a Material Definitive Agreement.
On January 21, 2021, Baudax Bio, Inc., (the "Company"), entered into an
inducement offer letter agreement to exercise common stock purchase warrants
(the "Letter Agreement") with an institutional investor named therein (the
"Purchaser"), pursuant to which the Company agreed to issue and sell, in an
offering (the "Offering"), warrants exercisable for an aggregate of 10,300,430
shares of common stock of the Company, par value, $0.01 per share ("Common
Stock") (the "Warrants") at an offering price of $0.125 per Warrant in exchange
for the exercise of the institutional investor's existing Series A warrants that
were issued to them on December 21, 2020, at an exercise price of $1.18 per
warrant (the "December Warrant Exercise"). The Warrants have an exercise price
of $1.60 per share. Each Warrant is exercisable for one share of Common Stock
and will be immediately exercisable and will expire five years from the issuance
date.
A holder (together with its affiliates) may not exercise any portion of the
Warrant to the extent that the holder would own more than 4.99% (or, at the
holder's option upon issuance, 9.99%) of the Company's outstanding Common Stock
immediately after exercise. However, upon at least 61 days' prior notice from
the holder to the Company, a holder with a 4.99% ownership blocker may increase
the amount of ownership of outstanding Common Stock after exercising the
holder's Warrant up to 9.99% of the number of the Company's Common Stock
outstanding immediately after giving effect to the exercise, as such percentage
ownership is determined in accordance with the terms of the Warrant.
The Letter Agreement contains customary representations and warranties and
agreements of the Company and the Purchaser and customary indemnification rights
and obligations of the parties. The closing of the Offering is expected to occur
on January 25, 2020. The Company is expected to receive gross proceeds of
approximately $13.4 million in connection with the Offering and the December
Warrant Exercise, before deducting placement agent fees and related offering
expenses.
As compensation to H.C. Wainwright & Co., LLC (the "Placement Agent") as
placement agent in connection with the Offering, the Company agreed to pay to
the Placement Agent a cash fee of 6.0% of the aggregate gross proceeds raised in
the Offering, plus a management fee equal to 1.0% of the gross proceeds raised
in the Offering and reimbursement of certain expenses and legal fees. The
Company will also issue to designees of the Placement Agent warrants to purchase
up to 6.0% of the aggregate number of shares of Common Stock underlying the
Warrants issued in the Offering, or warrants to purchase up to 618,026 shares of
Common Stock (the "Placement Agent Warrants"). The Placement Agent Warrants have
substantially the same terms as the Warrants, except that the Placement Agent
Warrants have an exercise price equal to 125% of the offering price per Warrant
(or $2.00 per share).
The foregoing summaries of the Letter Agreement, the Warrants and the Placement
Agent Warrants do not purport to be complete and are subject to, and qualified
in their entirety by, the forms of such documents attached as Exhibits 10.1, 4.1
and 4.2, respectively, to this Current Report on Form 8-K, which are
incorporated herein by reference.
The Warrants in the Offering and the Placement Agent Warrants were offered by
the Company pursuant to a registration statement on Form S-3 (File
No. 333-243488), which was filed with the Securities and Exchange Commission on
August 10, 2020 and was declared effective by the Commission on October 2, 2020
(the "Registration Statement"). A copy of the opinion of Troutman Pepper
Hamilton Sanders LLP relating to the legality of the issuance and sale of the
Securities in the Offering is attached as Exhibit 5.1 hereto. This Report shall
not constitute an offer to sell or the solicitation of an offer to buy
securities, nor shall there be any sale of securities in any state in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being filed herewith:
Exhibit
No. Document
4.1 Form of Warrant.
4.2 Form of Placement Agent Warrant.
5.1 Opinion of Troutman Pepper Hamilton Sanders LLP.
10.1 Form of Letter Agreement.
23.1 Consent of Troutman Pepper Hamilton Sanders LLP (included in Exhibit
5.1).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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