Item 1.01. Entry into a Material Definitive Agreement.
Background
On April 29, 2019, Innovate Biopharmaceuticals, Inc. (the "Company") entered
into a securities purchase agreement (the "SPA") with certain purchasers (the
"Purchasers"), whereby the Company, among other things, issued to the Purchasers
warrants (the "Purchaser Warrants") to purchase shares of the Company's common
stock ("Common Stock") on May 1, 2019. Prior to the Exchange (as defined below),
4,534,186 Purchaser Warrants were outstanding.
Offer to Exchange
On December 19, 2019, the Company and each of the Purchasers entered into
separate exchange agreements (the "Exchange Agreements"), pursuant to which the
Company agreed to issue to the Purchasers an aggregate of 5,441,023 shares of
Common Stock (the "Exchange Shares"), at a ratio of 1.2 Exchange Shares for each
Purchaser Warrants, in exchange for the cancellation and termination of all of
the 4,534,186 outstanding Purchaser Warrants (the "Exchange").
The exchange of the Exchange Shares for the Purchaser Warrants will be made in
reliance upon the exemption from registration provided by Section 3(a)(9) of the
Securities Act of 1933, as amended.
A copy of the form of the Exchange Agreement is attached hereto as Exhibit 10.1
and is incorporated herein by reference.
H.C. Wainwright & Co. LLC acted as a financial advisor to the Company in this
exchange.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Form of Exchange Agreement
3
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