Item 1.01. Entry into a Material Definitive Agreement.
On January 11, 2021, PolarityTE, Inc. (the "Company") entered into a securities
purchase agreement (the "Purchase Agreement") with the purchaser named therein
(the "Purchaser"), pursuant to which the Company agreed to issue and sell, in a
previously disclosed registered direct offering (the "Offering"), 6,670,000
shares (the "Shares") of its common stock, par value $0.001 per share (the
"Common Stock"), pre-funded warrants to purchase up to 2,420,910 shares of
Common Stock (the "Pre-Funded Warrants") and accompanying common warrants to
purchase up to 9,090,910 shares of Common Stock (the "Warrants" and, together
with the Shares and the Pre-Funded Warrants, the "Securities"). Each Share and
Pre-Funded Warrant was sold together with a Warrant. The combined offering price
of each Share and accompanying Warrant was $1.100 and for each Pre-Funded
Warrant and accompanying Warrant was $1.099.
Each Warrant is exercisable for one share of the Company's Common Stock at an
exercise price of $1.200 per share. The Warrants are immediately exercisable and
will expire five years from the date of issuance. The exercise price of each
Pre-Funded Warrant is $0.001 per share. Each Pre-Funded Warrant is exercisable
for one share of our Common Stock. Subject to the ownership limits described in
the following paragraph, the Pre-Funded Warrants are immediately exercisable and
may be exercised at any time until all of the Pre-Funded Warrants are exercised
in full.
A holder (together with its affiliates) may not exercise any portion of the
Pre-Funded Warrant to the extent that the holder would own more than 4.99% of
the outstanding Common Stock immediately after exercise, which percentage may be
changed at the holder's election to a lower percentage at any time or to a
higher percentage not to exceed 9.99% upon 61 days' notice to the Company.
The Purchase 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 occurred on January
14, 2021. Furthermore, the Pre-Funded Warrant was exercised, and 2,420,910
common shares issued to the Purchaser on January 14, 2021. The Company received
gross proceeds of approximately $10.0 million in connection with the Offering,
before deducting placement agent fees and related offering expenses. A copy of
the press release announcing the completion of the Offering is attached hereto
as Exhibit 99.1, and is incorporated by reference herein.
As previously disclosed, the Company engaged H.C. Wainwright & Co., LLC as
placement agent (the "Placement Agent") in connection with the Offering pursuant
to a letter agreement, dated November 6, 2020, as amended on December 16, 2020
(the "Engagement Letter"). The Placement Agent agreed to use its reasonable best
efforts to arrange for the sale of the Securities. The Company agreed to pay the
Placement Agent a cash fee of 7.0% of the aggregate gross proceeds raised in the
Offering. The Company also agreed to pay the Placement Agent $35,000 for
non-accountable expenses, to reimburse the Placement Agent's legal fees and
other out-of-pocket expenses in an amount up to $50,000, and to pay up to
$12,900 for closing costs.
The Company also issued to designees of the Placement Agent warrants (the
"Placement Agent Warrants") to purchase up to 6.0% of the aggregate number of
Shares and Pre-Funded Warrants sold in the Offering (or warrants to purchase up
to 545,455 shares of Common Stock). 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 purchase price per share
(or $1.375 per share) and a term of five-years from the commencement of the
sales of the Offering. The Company also agreed to pay the Placement Agent,
subject to certain exceptions, a tail fee equal to the cash and warrant
compensation in the Offering, with respect to any public or private offering or
other financing or capital-raising transaction to the extent that such financing
or capital is provided to the Company by investors whom the Placement Agent had
back and forth correspondence during the term of its engagement or introduced to
the Company during the term of its engagement in connection with the Offering,
during the six-month period following the expiration or termination of the
Engagement Letter.
The foregoing descriptions of the Purchase Agreement, the Warrants, the
Pre-Funded Warrants and the Placement Agent Warrants are not complete and are
qualified in their entirety by reference to the forms of such documents, copies
of which are filed as Exhibits 10.1, 4.1, 4.2 and 4.3 to this report,
respectively, and are incorporated by reference herein.
The Securities in the Offering and the Placement Agent Warrants were offered
pursuant to a prospectus supplement filed with the Securities and Exchange
Commission (the "Commission") pursuant to Rule 424(b) of the Securities Act of
1933, as amended (the "Securities Act"), dated January 11, 2021, and an
accompanying prospectus dated February 22, 2019, pursuant to the Company's shelf
registration statement on Form S-3 (Registration Statement No. 333-229584) that
has been filed with and declared effective by the Commission. A copy of the
opinion of King & Spalding LLP relating to the legality of the issuance and sale
of the Securities in the Offering is attached as Exhibit 5.1 to this report.
This Current Report on Form 8-K 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.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
4.1 Form of Series A Common Stock Purchase Warrant
4.2 Form of Series B Pre-Funded Common Stock Purchase Warrant
4.3 Form of Placement Agent Common Stock Purchase Warrant
5.1 Opinion of King & Spalding LLP
10.1 Form of Securities Purchase Agreement
23.1 Consent of King & Spalding LLP (included in Exhibit 5.1)
99.1 Press Release, dated January 14, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
© Edgar Online, source Glimpses