On December 18, 2019 Selecta Biosciences, Inc. (the "Company") reported that it has entered into a Securities Purchase Agreement (the "Purchase Agreement") with the purchasers named therein (the "Investors"), including certain members of the board of directors of the company (Filing, 8-K, Selecta Biosciences, DEC 18, 2019, View Source [SID1234552606]).
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Pursuant to the Purchase Agreement, the Company agreed to sell (i) an aggregate of 37,634,883 shares of its common stock (the "Shares"), par value $0.0001 per share (the "Common Stock"), at a purchase price equal to $1.46 per share, which was equal to the most recent consolidated closing bid price on the Nasdaq Global Market on December 18, 2019, (ii) warrants to purchase an aggregate of 22,988,501 shares of Common Stock (the "Common Warrants"), at a purchase price equal to at $0.125 per share underlying each Common Warrant , and (iii) pre-funded warrants to purchase an aggregate of 8,342,128 shares of Common Stock (the "Pre-Funded Warrants" and, together with the Common Warrants, the "Warrants"), at a purchase price equal to at $1.46 per share underlying each Pre-Funded Warrant, to the Investors for aggregate gross proceeds of approximately $70.0 million (collectively, the "Offering"). The closing of the Offering occurred on December 23, 2019.
Each Common Warrant has an exercise price per share of Common Stock equal to $1.46 per share. Each Pre-Funded Warrant has an exercise price per share of Common Stock equal to $0.0001 per share. The exercise price and the number of shares of Common Stock issuable upon exercise of each Warrant is subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock. In addition, in certain circumstances, upon a fundamental transaction, a holder of Warrants will be entitled to receive, upon exercise of the Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Warrants immediately prior to the fundamental transaction; provided, however, that in the event of a fundamental transaction where the consideration consists solely of cash, solely of marketable securities or a combination thereof, each Warrant will be deemed to be exercised in full in a cashless exercise effective immediately prior to and contingent upon the consummation of such fundamental transaction. Each Warrant is exercisable from the date of issuance and has a term of five years.
The Company may not effect the exercise of certain Common Warrants, and the applicable holder will not be entitled to exercise any portion of any such Common Warrant, which, upon giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the holder of the Common Warrant (together with its affiliates) to exceed 4.999% or 9.999%, as applicable, of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Common Warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from the holder to the Company subject to the terms of the Common Warrants.
On December 23, 2019, in connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement (the "Registration Rights Agreement") with the Investors. Pursuant to the Registration Rights Agreement, the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission (the "SEC") within 45 days after the closing of the Offering for purposes of registering the resale of the Shares, shares of Common Stock issuable upon exercise of the Warrants, and any shares of Common Stock issued as a dividend or other distribution with respect to the Shares or shares of Common Stock issuable upon exercise of the Warrants. The Company agreed to use its reasonable best efforts to cause this registration statement to be declared effective by the SEC within 90 days after the closing of the Offering (or within 120 days if the SEC reviews the registration statement).
The Company has also agreed, among other things, to indemnify the Investors, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and to pay all fees and expenses (excluding any legal fees of the selling holder(s), and any underwriting discounts and selling commissions) incident to the Company’s obligations under the Registration Rights Agreement
The Offering is exempt from registration pursuant to Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. The Investors have acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends have been affixed to the securities issued in this transaction.