On June 1, 2020, Humanigen, Inc. (the "Company") reported that entered into a securities purchase agreement (the "Purchase Agreement") with certain accredited investors (the "Investors") to complete a private placement (the "Private Placement") of the Company’s common stock, par value $0.001 per share (the "Common Stock") (Filing, 8-K, Humanigen, JUN 1, 2020, View Source [SID1234560838]). The closing of the Private Placement occurred on June 2, 2020 (the "Closing Date"). At the closing, the Company issued and sold 82,528,718 shares of Common Stock (the "Shares") at a purchase price of $0.87 per share, for aggregate gross proceeds of approximately $71.8 million. The purchase price represented a 7% discount from the volume weighted average price of the Common Stock over the prior 20 trading days ending May 29, 2020. Effective upon completion of the Private Placement, the Company has an aggregate of 208,931,973 shares of Common Stock outstanding.
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On the Closing Date, the Company and the Investors also entered into a registration rights agreement (the "Registration Rights Agreement") pursuant to which the Company agreed to prepare and file a registration statement (the "Resale Registration Statement") for the resale of the Shares with the Securities and Exchange Commission (the "SEC"), within 10 business days of the Closing Date, and use reasonable best efforts to have the Resale Registration Statement declared effective by the SEC at the earliest possible date. Subject to certain limitations and an overall cap, the Company may be required to pay liquidated damages to the investors at a rate of 2% of the invested capital for each instance in which:
·The Company fails to make the initial filing of the Resale Registration Statement by June 16, 2020;
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The Company fails to cause the Resale Registration Statement to be declared effective prior to the earlier of (i) three business days after the SEC informs the Company that no review of the Resale Registration Statement will be made or that the SEC has no further comments on the Resale Registration Statement (but subject to the last sentence of Section 9.7 of the Purchase Agreement), or (ii) July 2, 2020 (or August 31, 2020 if the Staff has informed the Company that it will be reviewing or monitoring the Resale Registration Statement); or
·The prospectus included in the Resale Registration Statement ceases to be available for use by the investors for more than 30 consecutive days or more than 50 days in any 12-month period.
The Purchase Agreement also provides that the Company will use its commercially reasonable efforts to achieve a listing of the Common Stock on a national securities exchange, subject to certain limitations set forth in the Purchase Agreement. The Company’s ability to obtain approval of the listing of the Common Stock on a national securities exchange will require the Company to satisfy a number of conditions, including the effectiveness of the Resale Registration Statement, the Company’s ability to obtain certain stockholder and third party consents and approvals, and the Company’s ability to meet certain listing criteria including a minimum stock price and total value of public float. Accordingly, the Company may not be able to achieve a listing of the Common Stock on a national securities exchange in any particular time frame or at all.