Item 1.01. Entry into a Material Definitive Agreement.
On October 28, 2020, Titan Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), entered into an underwriting agreement (the "Underwriting
Agreement") with Maxim Group LLC, as representative of the underwriters,
pursuant to which the Company sold to the underwriters in a public offering (the
"Offering") an aggregate of 80,000,000 units at a public offering price of $0.10
per unit, with each unit consisting of (i) one share of common stock (the
"Common Stock and (ii) a warrant (the "Warrants") to purchase one share of
Common Stock.
The Company entered into a warrant agency agreement (the "Warrant Agency
Agreement") with its transfer agent, Continental Stock Transfer & Trust Company,
who will act as warrant agent for the Company, setting forth the terms and
conditions of the Warrants sold in the Offering. The Warrants have an exercise
price of $0.10, will be exercisable commencing on the effective date of an
increase in our authorized shares of common stock or a reverse split in an
amount sufficient to permit the exercise in full of the warrants and will expire
on the fifth anniversary of the initial exercise date.
The Offering closed on October 30, 2020. The Company conducted the Offering
pursuant to a Registration Statement on Form S-1 (File No. 333-249550), which
was declared effective by the Securities and Exchange Commission on October 28,
2020 (the "Registration Statement").
The foregoing descriptions of the Underwriting Agreement and the Warrant Agency
Agreement are not complete and are qualified in their entirety by reference to
the full text of the Underwriting Agreement, which is filed as Exhibit 1.1 to
this Current Report on Form 8-K (this "Report"), and the Warrant Agency
Agreement (including the form of warrant certificate), the form of which was
filed as Exhibit 4.10 to the Registration Statement and both of which are
incorporated herein by reference.
On October 28, 2020, the Company issued a press release announcing the pricing
of the Offering, a copy of which is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 8.01 Other Events.
On November 2, 2020, the Company announced the closing of the transactions
contemplated by the previously announced Debt Settlement and Release Agreement
(the "DSRA") with Molteni & C. dei F.lli Alitti Società di Esercizio S.p.A and
Horizon Credit LLC II, and the Asset Acquisition Agreement with JT
Pharmaceuticals, Inc. A copy of the press release is attached hereto as Exhibit
99.2 and is incorporated herein by reference.
On August 18, 2020, we received a notice from the Nasdaq Capital Market, or
Nasdaq, that because our stockholders' equity was less than $2.5 million, we
were no longer in compliance with the minimum stockholders' equity requirement
for continued listing pursuant to Nasdaq Listing Rule 5550(b)(1). The letter
noted that the Company's Quarterly Report on Form 10-Q for the period ended June
30, 2020 reported stockholders' equity of $1.56 million. In October 2020, Titan
provided a plan to regain compliance with the minimum stockholders' equity
standard, which plan included the wind down of the Company's commercial
operations, the elimination of outstanding debt to the Company's secured lenders
and an equity offering. By letter dated October 30, 2020, Nasdaq provided the
Company until December 1, 2020 to regain compliance.
The aggregate net proceeds of the Offering to the Company, after deducting
underwriting discounts and commissions and other expenses, were approximately
$7.4 million, $1.6 million of which were used as part of the settlement of
approximately $5.2 million of outstanding indebtedness (the "Debt Settlement")
in accordance with the DSRA. As a result of the closing of the Offering and the
Debt Settlement, the Company believes that as of the date hereof it has regained
compliance with the minimum stockholders' equity requirement. Nasdaq will
continue to monitor the Company's ongoing compliance with Nasdaq Listing Rule
5550(b) (1) and, if at the time of the Company's next periodic report or
thereafter it does not evidence compliance with the stockholders' equity
requirement or otherwise fails to comply with Nasdaq's requirements for
continued listing, Nasdaq may take steps to de-list the common stock.
Importantly, the Company is not currently in compliance with the $1.00 minimum
bid price requirement for continued listing and has until November 30, 2020 to
regain compliance. The Company is seeking stockholder approval of a reverse
split that should have the effect of regaining compliance with the minimum bid
price requirement, if approved in a timely manner.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
1.1 Underwriting Agreement dated October 28, 2028 between Titan
Pharmaceuticals, Inc. and Maxim Group LLC
99.1 Press Release dated October 28, 2020
99.2 Press Release dated November 2, 2020
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