Item 1.01 Entry Into a Material Definitive Agreement
On April 7, 2020, Akers Biosciences, Inc. (the "Company"), entered into a
Securities Purchase Agreement (the "Purchase Agreement") with certain
institutional and accredited investors (the "Purchasers"), pursuant to which the
Company agreed to issue and sell in a registered direct offering (the
"Offering") an aggregate of 766,667 shares (the "Shares") of common stock of the
Company, no par value (the "Common Stock"), at an offering price of $6.00 per
share, for gross proceeds of approximately $4.6 million before the deduction of
placement agent fees and offering expenses. The Shares are being offered by the
Company pursuant to a shelf registration statement on Form S-3 (File No. 333-
234449), which was initially filed with the Securities and Exchange Commission
(the "Commission") on November 1, 2019, and was declared effective by the
Commission on April 7, 2020, and a related prospectus.
The closing of the Offering is subject to satisfaction of customary closing
conditions set forth in the Purchase Agreement and is expected to occur on or
about April 8, 2020. The representations, warranties and covenants contained in
the Purchase Agreement were made solely for the benefit of the parties to the
Purchase Agreement. In addition, such representations, warranties and covenants
(i) are intended as a way of allocating the risk between the parties to the
Purchase Agreement and not as statements of fact, and (ii) may apply standards
of materiality in a way that is different from what may be viewed as material by
stockholders of, or other investors in, the Company. Accordingly, the Purchase
Agreement is filed with this report only to provide investors with information
regarding the terms of transaction, and not to provide investors with any other
factual information regarding the Company. Moreover, information concerning the
subject matter of the representations and warranties may change after the date
of the Purchase Agreement, which subsequent information may or may not be fully
reflected in public disclosures.
On April 7, 2020, the Company entered into an engagement letter (the "Engagement
Letter") with H.C. Wainwright & Co., LLC (the "Placement Agent"), pursuant to
which the Placement Agent agreed to serve as the exclusive placement agent for
the Company, on a reasonable best efforts basis, in connection with the
Offering. The Company has agreed to pay the Placement Agent an aggregate cash
fee equal to 7.5% of the gross proceeds received in the Offering and a
management fee of 1.0% of the gross proceeds received in the Offering. In
addition, the Company has agreed to grant to the Placement Agent warrants to
purchase up to shares of 61,333 Common Stock at an exercise price of $7.50 (the
"Placement Agent Warrants") in a private placement. The Placement Agent Warrants
will be exercisable at any time and from time to time, in whole or in part,
following the date of issuance and for a term of five years from the effective
date of the Offering. The Company will also pay the Placement Agent $50,000 for
its non-accountable expenses and $12,900 for clearing expenses.
Neither the Placement Agent Warrants nor the shares of Common Stock issuable
upon the exercise of the Placement Agent Warrants (the "Placement Agent Warrant
Shares") will be registered under the Securities Act or any state securities
laws. The Placement Agent Warrants and the Placement Agent Warrant Shares will
be issued in reliance on the exemptions from registration provided by Section
4(a)(2) under the Securities Act and Regulation D promulgated thereunder. The
Placement Agent has represented that it is an accredited investor, as defined in
Rule 501 of Regulation D promulgated under the Securities Act.
The net proceeds to the Company from the Offering, after deducting the Placement
Agent's fees and expenses and the Company's estimated offering expenses, and
excluding the proceeds, if any, from the exercise of the Placement Agent
Warrants, are expected to be approximately $4.1 million. The Company currently
intends to use $250,000 of the net proceeds from the Offering to pay the former
members of Cystron Biotech, LLC (approximately one-third of which is payable to
certain associated persons of the Placement Agent), pursuant to the terms of
that certain Membership Interest Purchase Agreement, dated as of March 23, 2020,
and the remaining net proceeds from this offering for working capital and
general corporate purposes.
The description of terms and conditions of the Engagement Letter, the form of
Purchase Agreement and the form of Placement Agent Warrant set forth herein do
not purport to be complete and are qualified in their entirety by the full text
of the Engagement Letter, the form of Purchase Agreement and the form of
Placement Agent Warrant, which are attached hereto as Exhibits 99.1, 10.1 and
4.1, respectively.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K in
relation to the Placement Agent Warrants and Placement Agent Warrant Shares is
incorporated herein by reference.
Item 8.01 Other Events.
On April 7, 2020, the Company issued a press release regarding the transaction
described above under Item 1.01 of this Current Report on Form 8-K. A copy of
the press release is attached hereto as Exhibit 99.2 and is incorporated herein
by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
4.1 Form of Placement Agent Warrant
10.1 Form of Securities Purchase Agreement
99.1 Engagement Letter, dated April 7, 2020, by and between Akers
BioSciences, Inc. and H.C. Wainwright & Co., LLC
99.2 Press release, dated April 7, 2020
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