Item 1.01 Entry into a Material Definitive Agreement.
On February 10, 2021, Neuropathix, Inc. (f/k/a Kannalife, Inc.), a Delaware
corporation (the "Company"), entered into a letter agreement with Lyons Capital
LLC ("Lyons Capital"), pursuant to which the Company agreed to issue and sell to
Lyons Capital 3,500,000 shares of the Company's common stock, par value $0.0001
per share ("Common Stock"), and two warrants to purchase an aggregate of
3,500,000 additional shares of Common Stock, the terms of such warrants are
further discussed below, for an aggregate purchase price of $1,207,500 (the
"Transaction").
On February 17, 2021, the Company and Lyons Capital executed a Common Stock
Purchase Agreement (the "SPA") and two warrants (each a "Warrant, and together,
the "Warrants") memorializing the definitive terms of the Transaction. The
effective date of the SPA and Warrants is February 10, 2021.
The first warrant ("Warrant No. 1) grants Lyons Capital the right to purchase up
to 1,750,000 shares of Common stock at an exercise price of $0.22 per share. The
second warrant ("Warrant No. 2," and together with Warrant No. 1, the
"Warrants") grants Lyons Capital the right to purchase up to an additional
1,750,000 shares of Common stock at an exercise price of $0.27 per share. The
Warrants are exercisable immediately, will expire five years from the date of
issuance, and contain customary provisions allowing for adjustment to the
exercise price and number of shares of Common Stock issuable upon exercise in
the event of any stock dividend, recapitalization, reorganization,
reclassification, or similar transaction. Lyons Capital has the right to
exercise the Warrants at any time; provided, however, that subject to limited
exceptions, Lyons Capital may not exercise any portion of the Warrants if Lyons
Capital, together with any of its affiliates, would beneficially own in excess
of 4.99% of the number of shares of the Company's Common Stock outstanding
immediately after giving effect to such exercise.
In addition to the foregoing, the SPA and the Warrants provide Lyons Capital
with certain piggyback registration rights with respect to the shares of Common
Stock issued in connection with the Transaction and the shares of Common Stock
issuable upon exercise of the Warrants.
The foregoing descriptions of the SPA and Warrants are not complete and are
qualified in their entirety by references to the full text of the Common Stock
Purchase Agreement, Warrant No. 1 and Warrant No. 2, copies of which are
attached as Exhibits 10.1, 10.2, and 10.3, respectively, to this Current Report
on Form 8-K, and are incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 3.02.
The shares of Common Stock and the Warrants, together with any Common Stock
issuable upon exercise thereof, were sold and issued without registration under
the Securities Act of 1933 (the "Securities Act") in reliance on the exemptions
provided by Section 4(a)(2) of the Securities Act as transactions not involving
a public offering and Rule 506 promulgated under the Securities Act as sales to
accredited investors, and in reliance on similar exemptions under applicable
state laws.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
10.1 Common Stock Purchase Agreement, dated February 17, 2021
10.2 Warrant No. 1, effective February 10, 2021
10.3 Warrant No. 2, effective February 10, 2021
2
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