Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On March 31, 2020, Phio Pharmaceuticals Corp. (the "Company") entered into a
securities purchase agreement with certain institutional and accredited
investors (the "Purchase Agreement") relating to the offering and sale of
1,713,064 shares of Company common stock, par value $0.0001 per share (the
"Common Stock") at a purchase price of $2.21 per share (the "Offering").
Concurrently with the Offering, and pursuant to the Purchase Agreement, the
Company also commenced a private placement whereby it issued and sold warrants
(the "Warrants") exercisable for an aggregate of up to 1,713,064 shares of
Common Stock, which represents 100% of the shares of Common Stock sold in the
Offering, with a purchase price of $0.125 per underlying warrant share and an
exercise price of $2.21 per share (the "Private Placement"). The net proceeds to
the Company from the Offering and the Private Placement is approximately $3.5
million, after deducting fees and expenses. Subject to certain ownership
limitations, the Warrants are exercisable upon issuance. The Warrants will
expire on the 5.5 year anniversary of the date of issuance. None of the
Warrants, nor the Warrants Shares, have been registered under the Securities Act
of 1933, as amended.
Pursuant to an engagement letter, dated as of January 31, 2020, between the
Company and H.C. Wainwright & Co., LLC, or the placement agent, the Company
agreed to pay the placement agent a cash fee of 7.5% and a management fee of
1.0% of the aggregate gross proceeds of the Offering and the Private Placement.
The Company also agreed to pay the placement agent $90,000 for non-accountable
expenses and $12,900 for clearing fees. In addition, the Company issued to the
placement agent warrants to purchase up to 128,480 shares of Common Stock (the
"Placement Agent Warrants"), or 7.5% of the aggregate number of shares of Common
Stock sold in the Offering. The Placement Agent Warrants are immediately
exercisable at an exercise price of $2.9188 per share of Common Stock and expire
on March 31, 2025.
The Offering and Private Placement closed on April 2, 2020.
The 1,713,064 shares of Common Stock sold in the Offering (but not the Warrants
or the Warrant Shares) were offered and sold pursuant to a prospectus, dated
March 31, 2020, in connection with a takedown from the Company's shelf
registration statement on Form S-3 (File No. 333-224031).
The Warrants, the Warrant Shares, the Placement Agent Warrants and the shares of
Common Stock issuable thereunder were sold and issued without registration under
the Securities Act of 1933, as amended (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.
The foregoing descriptions of the Purchase Agreement and the Warrants are not
complete and are qualified in their entirety by references to the full text of
the Purchase Agreement and the Warrants, which are filed as exhibits to this
report and are incorporated by reference herein.
A copy of the opinion of Gibson, Dunn & Crutcher, LLP relating to the validity
of the securities issued in the Public Offering is filed herewith as Exhibit
5.1.
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Item 3.02 Unregistered Sales of Equity Securities.
The disclosures in Item 1.01 of this Form 8-K regarding the Warrants, and
Warrant Shares, the Placement Agent Warrants and the shares of Common Stock
issuable thereunder are incorporated by reference into this Item 3.02.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
4.1 Form of Common Stock Warrant
5.1 Opinion of Gibson, Dunn & Crutcher, LLP
10.1 Securities Purchase Agreement, dated March 31, 2020, by and between
the Company and the Purchasers signatory therein.
23.1 Consent of Gibson, Dunn & Crutcher, LLP (contained in Exhibit 5.1)
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