VERASTEM, INC. Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On
The Company agreed to sell and issue in the first tranche of the Private
Placement 1,200,000 shares of Preferred Stock a purchase price of
In addition, the Company agreed to sell and issue in the second tranche of the
Private Placement 944,160 shares of Preferred Stock at a purchase price of
The Company expects to use the net proceeds from the Private Placement for general corporate purposes, which may include working capital, capital expenditures, research and development expenditures, clinical trial expenditures, commercial expenditures, milestone payments under in-license agreements, and possible acquisitions.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 3.02 Unregistered Sales of
To the extent required by Item 3.02 of Form 8-K, the information regarding the Preferred Stock set forth under Items 1.01 and 5.03 of this Form 8-K is incorporated by reference in this Item 3.02. The Company will issue the Preferred Stock in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act. The Company is relying on this exemption from registration for private placements based in part on the representations made by the Purchasers, including the representations with respect to each Purchaser's status as an accredited investor, as such term is defined in Rule 501(a) of the Securities Act, and each Purchaser's investment intent. The offer and sale of the Shares have not been registered under the Securities Act.
Item 3.03 Material Modification to Rights of Security Holders.
The information contained in Item 5.03 with respect to the Certificate of Designation (as defined below) is incorporated by reference into this Item 3.03.
Item 5.03 Amendments to the Articles of Incorporation; Change in Fiscal Year
Creation of Series B Convertible Preferred Stock
On
Converison
Each share of the Preferred Stock will be convertible into 42.3657 shares of the Company's common stock (the "Common Stock") at the option of the holder at any time, subject to certain limitations, including that the holder will be prohibited from converting Preferred Stock into Common Stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of Common Stock above a conversion blocker, which is initially set at 9.99% (the "Conversion Blocker") of the total Common Stock then issued and outstanding immediately following the conversion of such shares of Preferred Stock. Holders of the Preferred Stock are permitted to increase the Conversion Blocker to an amount not to exceed 19.99% upon 61 days' prior notice.
Ranking; Liquidation Preference
The Preferred Stock ranks (i) senior to the Common Stock; (ii) senior to all other classes and series of equity securities of the Company that by their terms do not rank senior to the Preferred Stock ("Junior Stock"); (iii) senior to all shares of the Company's Series A Convertible Preferred Stock; (iv) on parity with any class or series of capital stock of the Company hereafter created specifically ranking by its terms on parity with the Preferred Stock (the "Parity Stock"); (v) junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Preferred Stock ("Senior Stock"); and (vi) junior to all of the Company's existing and future debt obligations, including convertible or exchangeable debt securities, in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntarily or involuntarily and as to the right to receive dividends.
In the event of the liquidation, dissolution or winding up of the affairs of the
Company, whether voluntary or involuntary, after payment or provision for
payment of the debts and other liabilities of the Company, and subject to the
prior and superior rights of any Senior Stock, each holder of shares of
Preferred Stock will be entitled to receive, in preference to any distributions
of any of the assets or surplus funds of the Company to the holders of the
Common Stock and any of the Company's securities that are
Voting Rights
So long as any shares of the Preferred Stock remain outstanding, the Company shall not, without the affirmative vote or consent of the holders of majority of the shares of the Preferred Stock then-outstanding, given in person or by proxy, either in writing or at a meeting, in which the holders of the Preferred Stock vote separately as a class: (a) amend, alter, modify or repeal (whether by merger, consolidation or otherwise) the Certificate of Designation, the Certificate of Incorporation of the Company, or the Company's bylaws in any manner that adversely affects the rights, preferences, privileges or the restrictions provided for the benefit of, the Preferred Stock; (b) issue further shares of Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Preferred Stock; (c) authorize or issue any Senior Stock; or (d) enter into any agreement to do any of the foregoing that is not expressly made conditional on obtaining the affirmative vote or written consent of the majority of then-outstanding Preferred Stock.
Dividends
Shares of the Preferred Stock are entitled to receive any dividends payable to holders of Common Stock on an as-converted-to common-stock basis.
Exchange Listing
The Company does not intend to apply for listing of the Preferred Stock on any securities exchange or other trading system.
The foregoing description of the Certificate of Designation and the summary of the preferences, rights, and limitations of the Preferred Stock described above does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, a copy of which is being filed as Exhibit 3.1 hereto and is incorporated by reference herein.
Note Regarding Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements about the Company's future plans and prospects, and financial results. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement.
These risks and uncertainties include the risk that the Private Placement does
not close on the expected timing, or at all. Other risks and uncertainties
include those identified under the heading "Risk Factors" in the Company's
Quarterly Report on Form 10-Q for the quarterly periods ended
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
3.1 Certificate of Designation of Preferences, Rights and Limitations of
the Series B Convertible Preferred Stock
10.1* Purchase Agreement, dated as of January 24, 2023 , among Verastem,
Inc. and each purchaser party thereto
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished
to the
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