Item 1.01 Entry into a Material Definitive Agreement
On
The Company also agreed to sell to the Investors, in a concurrent private
placement, unregistered warrants to purchase up to an aggregate of 3,750,003
shares of Common Stock at an exercise price of
Net proceeds to the Company from the sale of the Shares and the Warrants (such
transaction, the "Offering"), after deducting estimated offering expenses and
placement agent fees, are expected to be approximately
With respect to the Shares, the Offering is being made pursuant to the Company's
effective shelf registration statement on Form S-3 (File No. 333-230686), which
was originally filed with the
The Purchase Agreement prohibits the Company from issuing any Common Stock (or Common Stock equivalents) for 90 calendar days (the "90-day Period") following the closing of the Offering, and from entering into any agreement to effect any "variable rate transaction" from the date of the Purchase Agreement to the second year anniversary of the closing of the Offering. However, upon the completion of the 90-day Period, the Company may enter into and effect sales pursuant to an at-the-market offering facility with the Placement Agent.
The Warrants provide that, if at any time while the Warrants are outstanding, the Company consummates a fundamental transaction, as described in the Warrants, and which term generally includes, but is not limited to: (i) any consolidation or merger into another corporation, (ii) the consummation of a transaction whereby another person or entity acquires more than 50% of our outstanding voting stock, or (iii) the sale of all or substantially all of our assets, then each holder, concurrently with or within 30 calendar days after the consummation of the fundamental transaction, will have the right to require the Company (or any successor thereto) to repurchase such holder's Warrants for an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of such holder's Warrants.
The foregoing description the Purchase Agreement, the Engagement Agreement, the form of Warrant and the form of Placement Agent's warrant does not purport to be complete and is qualified in its entirety by reference to the full texts of the Purchase Agreement, the Engagement Agreement, the form of Warrant and the form of Placement Agent's warrant, a copy of each is attached hereto as Exhibit 10.1, Exhibit 10.2, Exhibit 4.1 and Exhibit 4.2, respectively, and is incorporated herein by reference.
A copy of the opinion of
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Item 3.02 Unregistered Sales of
The information contained in Item 1.01 with respect to the issuance of the Warrants and the Placement Agent's warrants and the shares of common stock issuable thereunder is incorporated herein by reference.
The Warrants and the Placement Agent's warrants and the shares of Common Stock issuable thereunder are not being registered under the Securities Act. The Warrants and the Placement Agent's warrants are being offered pursuant to the exemption provided in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 4.1 Form of the Investor's Common Stock Purchase Warrant 4.2 Form of the Placement Agent's Common Stock Purchase Warrant 5.1 Opinion ofFlangas Law Group 10.1 Form of Securities Purchase Agreement datedJune 1, 2020 10.2 Engagement Agreement datedMay 31, 2020 23.1 Consent ofFlangas Law Group (included in Exhibit 5.1) 99.1 Press release ofChina Jo-Jo Drugstores, Inc. 2
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