Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On October 15, 2021, Trevi Therapeutics, Inc., a Delaware corporation (the
"Company"), entered into a securities purchase agreement (the "Securities
Purchase Agreement") with New Enterprise Associates 16, L.P., an existing
stockholder of the Company (the "Purchaser"), pursuant to which the Company
agreed to issue and sell to the Purchaser, in a private placement, 1,851,852
shares (the "Shares") of the Company's common stock, par value $0.001 per share
(the "Common Stock") and accompanying warrants to purchase an aggregate of
3,703,704 shares of Common Stock (the "Private Placement"). The accompanying
warrants to purchase Common Stock are referred to herein collectively as the
"Warrants." Pursuant to the Securities Purchase Agreement, each Share and
accompanying warrants to purchase Common Stock were sold together at a combined
price of $1.62, for gross proceeds of approximately $3.0 million. The Private
Placement closed on October 18, 2021 (the "Closing Date").
Of the Warrants, warrants to purchase an aggregate of 1,851,852 shares of Common
Stock will expire 3.5 years from the Closing Date and warrants to purchase an
aggregate of 1,851,852 shares of Common Stock will expire seven years from the
Closing Date. The Warrants have an exercise price of $1.37 per share and became
exercisable immediately upon issuance.
In addition, in certain circumstances, upon a fundamental transaction of the
Company, the holders of Warrants will have the right to require the Company to
repurchase such warrants at their fair value using a Black Scholes option
pricing formula; provided that (i) such holder may not require the Company or
its successor entity to repurchase such warrants for the Black Scholes value in
connection with a fundamental transaction that is not approved by the Board of
Directors, and therefore not within the Company's control, and (ii) in the event
that the alternate consideration payable to holders of Common Stock in such
fundamental transaction consists of equity securities of the successor or
acquirer that are quoted or listed on a nationally recognized securities
exchange, then the holder of the warrants shall only be entitled to receive the
same type or form of consideration (and in the same proportion), determined in
accordance with the Black Scholes option pricing formula.
The Securities Purchase Agreement contains customary representations, warranties
and agreements by the Company and indemnification obligations of the Company and
the Purchaser, including for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act").
Registration Rights Agreement
On October 15, 2021, in connection with the Private Placement, the Company
entered into a registration rights agreement (the "Registration Rights
Agreement") with the Purchaser, pursuant to which the Company agreed to register
for resale the Shares, as well as the shares of Common Stock issuable upon
exercise of the Warrants (the "Warrant Shares"). Under the Registration Rights
Agreement, the Company has agreed to file a registration statement covering the
resale by the Purchaser of the Shares and Warrant Shares (together, the
"Registrable Securities") within 15 days following the date on which the
Securities and Exchange Commission (the "SEC") declares effective the
registration statement on Form S-3 filed by the Company on October 15, 2021 (the
"Filing Date"). The Company has agreed to use commercially reasonable efforts to
cause such registration statement to become effective and to keep such
registration statement effective until the date the Shares and Warrant Shares
covered by such registration statement have been sold or may be resold pursuant
to Rule 144 without restriction (the "Effectiveness Period"). The Company has
agreed to be responsible for all fees and expenses incurred in connection with
the registration of the Registrable Securities.
In the event (i) the registration statement is not filed on or prior to the
Filing Date, (ii) the Company fails to file with the SEC a request for
acceleration of the registration statement in accordance with Rule 461 within
five trading days of the date that the Company is notified by the SEC that the
registration statement will not be reviewed by the SEC staff or is not subject
to further comment by the SEC staff, (iii) the Company fails to file a
pre-effective amendment and otherwise respond in writing to comments made by the
SEC in respect of the registration statement within 15 days after the receipt of
comments by or notice from the SEC that such amendment is required in order for
the registration statement to be declared effective, (iv) the registration
statement has not been declared effective (A) by the 15th day after the Filing
Date (or, in the event of a "full review" by the SEC, the 45th day after the
Filing Date) or (B) within five trading days following the date the Company is
notified by the SEC that the registration statement
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will not be reviewed or is no longer subject to further review and comments, or
(v) after the registration statement is declared effective but prior to the end
of the Effectiveness Period, the registration statement ceases for any reason to
remain continuously effective as to all Registrable Securities, or the holders
of Registrable Securities are otherwise not permitted to utilize the prospectus
in the registration statement to resell such Registrable Securities, for more
than 30 consecutive days or more than an aggregate of 60 days during any
12-month period, then the Company has agreed to make pro rata payments to each
holder as liquidated damages in an amount equal to 1.0% of the aggregate amount
invested by each such holder in the Registrable Securities then held by the
holder per 30-day period or pro rata for any portion thereof for each such month
during which such event continues, provided that the maximum aggregate amounts
payable as liquidated damages shall not exceed 10.0% of the aggregate amount
invested by each such holder in the Registrable Securities then held by the
holder.
The Company has granted the Purchaser customary indemnification rights in
connection with the registration statement. The Purchaser has also granted the
Company customary indemnification rights in connection with the registration
statement.
The representations, warranties and covenants contained in the Securities
Purchase Agreement, the Warrants and the Registration Rights Agreement were made
solely for the benefit of the parties thereto and may be subject to limitations
agreed upon by the contracting parties. The foregoing descriptions of the
Warrants, the Securities Purchase Agreement and the Registration Rights
Agreement do not purport to be complete and are qualified in their entirety by
reference to the full text of the form of 7-Year Warrant, the form of 3.5-Year
Warrant, the form of Securities Purchase Agreement and the form of Registration
Rights Agreement, copies of which are filed as Exhibits 4.1, 4.2, 99.1 and 99.2
hereto, respectively, and incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained above in Item 1.01 related to the Private Placement is
hereby incorporated by reference into this Item 3.02. Based in part upon the
representations of the Purchaser in the Securities Purchase Agreement, the
offering and sale of the Shares and the Warrants will be exempt from
registration under Section 4(a)(2) of the Securities Act. The sales of the
Shares and the Warrants by the Company in the Private Placement will not be
registered under the Securities Act or any state securities laws and the Shares
and the Warrants may not be offered or sold in the United States absent
registration with the SEC or an applicable exemption from the registration
requirements. The sale of such securities will not involve a public offering and
will be made without general solicitation or general advertising. In the
Securities Purchase Agreement, the Purchaser represented that it is an
accredited investor, as such term is defined in Rule 501(a) of Regulation D
under the Securities Act, and it is acquiring the Shares and the Warrants for
investment purposes only and not with a view to any resale, distribution or
other disposition of the Shares and the Warrants in violation of the United
States federal securities laws.
Item 8.01 Other Events.
SVB Covenant
The Company announced that the proceeds from the Private Placement, together
with amounts previously raised since June 1, 2021, satisfy the Company's
obligation under its loan and security agreement with Silicon Valley Bank to
raise at least $15.0 million in net proceeds from the sale of equity securities
during the period from June 1, 2021 through October 31, 2021.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
4.1 Form of 7-Year Warrant
4.2 Form of 3.5-Year Warrant
99.1 Form of Securities Purchase Agreement
99.2 Form of Registration Rights Agreement
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document)
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Forward-Looking Statements
Any statements in this Current Report on Form 8-K about the Company's future
expectations, plans and prospects, as well as any other statements regarding
matters that are not historical facts, may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are subject to risks and uncertainties and actual
results may differ materially from those expressed or implied by such
forward-looking statements. Such statements include statements containing the
words "believes," "anticipates," "plans," "expects," and similar expressions.
Risks that contribute to the uncertain nature of the forward-looking statements
include: uncertainties regarding the success, cost and timing of the Company's
product candidate development activities and ongoing and planned clinical
trials; uncertainties regarding the Company's ability to execute on its
strategy; the risk that positive results from a clinical trial may not
necessarily be predictive of the results of future or ongoing clinical trials;
potential regulatory developments in the United States and foreign countries;
uncertainties inherent in estimating the Company's cash runway, future expenses
and other financial results; uncertainties regarding the Company's ability to
continue as a going concern; uncertainties regarding the scope, timing and
severity of the COVID-19 pandemic, the impact of the COVID-19 pandemic on the
Company's clinical operations and actions taken in response to the pandemic; as
well as other risks and uncertainties set forth in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2021 filed with the
SEC and in subsequent filings with the SEC. All forward-looking statements
contained in this Current Report on Form 8-K speak only as of the date hereof,
and the Company specifically disclaims any obligation to update any
forward-looking statement, whether because of new information, future events or
otherwise.
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