Item 1.01. Entry into a Material Definitive Agreement.
On April 29, 2020, Marrone Bio Innovations, Inc. (the "Company") entered into a
Warrant Exchange Agreement (the "Warrant Exchange Agreement") with Ospraie Ag
Science LLC ("Ospraie"), Ardsley Partners Renewable Energy Fund, L.P.
("Ardsley"), National Securities Corporation ("NSC"), Ivan Saval ("Mr. Saval,
together with NSC, Ospraie and Ardsley, the "OAI Investors"), Ivy Science &
Technology Fund ("IS&T") and Ivy VIP Science & Technology ("Ivy VIP" and,
together with IS&T, the "Waddell Investors," and the Waddell Investors, together
with the OAI Investors, the "Investors").
Pursuant to the Warrant Exchange Agreement, the Investors have exchanged certain
previously issued and outstanding warrants (the "Prior Warrants") to purchase an
aggregate of up to 45,977,809 shares of the Company's common stock, par value
$0.00001 per share ("Common Stock") for new warrants (the "New Warrants") to
purchase an aggregate of up to 29,881,855 shares of Common Stock (the "Warrant
Shares"). All of the New Warrants were issued to the Investors upon execution of
the Warrant Exchange Agreement on April 29, 2020.
The New Warrants all have an exercise price of $0.75 per share, and expire in
five tranches, as follows: (i) May 1, 2020, with respect to 3,392,581 Warrant
Shares, (ii) September 15, 2020, with respect to 2,714,065 Warrant Shares, (iii)
December 15, 2020, with respect to 13,027,512 Warrant Shares, (iv) March 15,
2021, with respect to 5,862,380 Warrant Shares, and (v) and December 15, 2021
with respect to 4,885,317 Warrant Shares. In addition, the Investors have agreed
to exercise all the New Warrants subject to the first tranche, for an aggregate
of approximately $2.5 million, on or before May 1, 2020. The remaining four
tranches of New Warrants reflect an aggregate exercise price of approximately
$19.9 million.
The Prior Warrants held by the OAI Investors and exchanged pursuant to the
Warrant Exchange Agreement were originally issued pursuant to private placement
transactions on February 5, 2018 and pursuant to a warrant amendment and plan of
reorganization agreement entered into on August 6, 2019, and were exercisable
for an aggregate of 37,977,809 shares of Common Stock, of which 1,377,809 were
exercisable prior to December 31, 2020 at a purchase price of $1.00 per share,
14,600,000 were exercisable prior to December 31, 2021 at a purchase price of
$1.00 per share and 22,000,000 were exercisable prior to January 1, 2023 at a
purchase price of $1.75 per share. The Prior Warrants held by the Waddell
Investors and exchanged pursuant to the Warrant Exchange Agreement were
originally issued pursuant to private placement and debt exchange transactions
on August 20, 2015 and on February 5, 2018, respectively, and were exercisable
for an aggregate of 8,000,000 shares of Common Stock, of which 4,000,000 were
exercisable prior to December 31, 2020 at a purchase price of $1.25 per share
and 4,000,000 were exercisable prior to August 23, 2023 at a purchase price of
$1.91 per share.
The New Warrants will be exercisable in cash, provided that they may be
exercised via cashless "net" exercise if the Company does not have an
registration statement registering the shares underlying the New Warrants
effective as of March 31, 2021. In addition, the Company will redeem the New
Warrants upon the occurrence of any Fundamental Transaction (as defined in the
New Warrants), and the exercise price of the New Warrants will be subject to
weighted-average antidilution provisions.
In connection with the Warrant Exchange Agreement, the Company entered into a
registration rights agreement (the "Registration Rights Agreement") with the
Investors pursuant to which the Company has agreed to file a registration
statement with the Securities and Exchange Commission no later than December 31,
2020 covering the resale of the New Warrant Shares and to maintain the
effectiveness of the registration statement until the date upon which the New
Warrant Shares held by the Investors cease to be Registrable Securities (as that
term is defined in the Registration Rights Agreement).
The Warrant Exchange Agreement, the form of New Warrant and the Registration
Rights Agreement and are filed herewith as Exhibits 10.1, 4.1 and 10.2,
respectively, and are incorporated herein by reference, and the foregoing
descriptions are qualified in their entirety by the terms contained therein.
Item 3.02. Unregistered Sale of Equity Securities.
The information regarding the issuance of the New Warrants and the Warrant
Shares in Item 1.01 of this Report is incorporated herein by reference. The New
Warrants and the Warrant Shares are being issued in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Securities Act")
in reliance on Sections 4(a)(2) under the Securities Act. Each of the Investors
is representing in connection with the transaction that such person is an
accredited investor, has been provided with such information about the Company
as has been requested by such person, and will acquire the securities of the
Company without a view toward public sale or distribution, except pursuant to
sales registered under, or exempted from, the registration requirements of the
Securities Act.
Item 8.01. Other Events.
On February 5, 2018, in addition to the issuance of certain of the Prior
Warrants to the Investors, the Company also issued certain warrants to other
parties involved in the private placement transactions as an investor or
placement agent (the "February 2018 Warrants"). As of immediately prior to the
entry into the Warrant Exchange Agreement, the February 2018 Warrants were
exercisable as to 5,372,667 shares at an exercise price of $1.00 per share (the
"Investor Warrants") and as to 1,064,830 shares at an exercise price of $1.25
per share (the "Lender Warrants"). The February 2018 Warrants include a weighted
average price-based anti-dilution adjustment provision. Accordingly, as a result
of the transactions contemplated by the Warrant Exchange Agreement, the exercise
price of the Investor Warrants has been decreased to $0.96. Due to the
antidilutive effect of the overall reduction in outstanding warrants due to the
transactions contemplated by the Warrant Exchange Agreement, the exercise price
of the Lender Warrants remains $1.25 per share.
On April 30, 2020, the Company issued a press release announcing its entry into
the Warrant Exchange Agreement. A copy of the press release is attached hereto
as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
4.1 Form of Warrant issuable pursuant to the Warrant Exchange Agreement.
10.1 Warrant Exchange Agreement dated as of April 29, 2020, by and among
Marrone Bio Innovations, Inc., Ospraie Ag Science LLC, Ardsley Partners
Renewable Energy Fund, L.P., National Securities Corporation, Ivan
Saval, Ivy Science & Technology Fund and Ivy VIP Science & Technology.
10.2 Registration Rights Agreement, dated April 29, 2020, by and among
Marrone Bio Innovations, Inc. and the investors named therein.
99.1 Press Release related to the Warrant Exchange Agreement, dated April
30, 2020.
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