On June 26, 2020, Veru Inc. (the "Company") reported that it entered into a common stock purchase agreement (the "Purchase Agreement") with Aspire Capital Fund, LLC, an Illinois limited liability company ("Aspire Capital"), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company has the right, from time to time in its sole discretion during the 36-month term of the Purchase Agreement, to direct Aspire Capital to purchase up to $23.9 million of the Company’s common stock (the "Common Stock") in the aggregate (Filing, 8-K, Veru, JUN 26, 2020, View Source [SID1234561499]). Upon execution of the Purchase Agreement, the Company issued and sold to Aspire Capital under the Purchase Agreement 1,644,737 shares of Common Stock at a price per share of $3.04, for an aggregate purchase price of $5,000,000 (the "Initial Purchase Shares"). Based on information currently available including giving effect to the sale of the Initial Purchase Shares to Aspire Capital under the Purchase Agreement, the Company expects its cash and cash equivalents as of June 30, 2020 to be approximately $13.5 million, compared to $2.6 million as of March 31, 2020.

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Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the "Registration Rights Agreement"), pursuant to which the Company agreed to file with the Securities and Exchange Commission (the "SEC") one or more registration statements (each, a "Registration Statement") as necessary to register for sale under the Securities Act of 1933, as amended (the "Securities Act"), the Initial Purchase Shares, the Commitment Shares (as defined below) and the additional shares of Common Stock that may be issued to Aspire Capital under the Purchase Agreement. The Company has filed with the SEC a prospectus supplement to the Company’s effective shelf registration statement on Form S-3 (File No. 333-221120) registering all of the shares of Common Stock that may be offered to Aspire Capital from time to time under the Purchase Agreement.

Under the Purchase Agreement, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a "Purchase Notice"), directing Aspire Capital (as principal) to purchase up to 200,000 shares of Common Stock per business day at a per share price (the "Purchase Price") equal to the lesser of the lowest sale price of the Common Stock on the purchase date or the arithmetic average of the three lowest closing sale prices for the Common Stock during the ten consecutive trading days ending on the trading day immediately preceding the purchase date.

In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount equal to 200,000 shares of Common Stock and the closing sale price of the Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a "VWAP Purchase Notice") directing Aspire Capital to purchase shares of Common Stock equal to up to 30% of the aggregate shares of the Common Stock traded on its principal market on the next trading day (the "VWAP Purchase Date"), subject to a maximum number of shares of Common Stock the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 97% of the volume-weighted average price for the Common Stock traded on its principal market on the VWAP Purchase Date.

The Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed.

The Purchase Agreement provides that the Company and Aspire Capital shall not effect any sales under the Purchase Agreement on any purchase date where the closing sale price of the Common Stock is less than $0.25 per share. There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of sales of shares of Common Stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, the Company issued to Aspire Capital 212,130 shares of Common Stock (the "Commitment Shares"). The Purchase Agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of the Common Stock during any time prior to the termination of the Purchase Agreement. Any proceeds the Company receives under the Purchase Agreement are expected to be used for working capital and general corporate purposes, which may include research and development, clinical trial and marketing expenditures.

The foregoing is a summary description of certain terms of the Purchase Agreement and the Registration Rights Agreement and, by its nature, is incomplete. Copies of the Purchase Agreement and Registration Rights Agreement are filed herewith as Exhibits 10.1 and 10.2, respectively, to this report and are incorporated herein by reference. All readers are encouraged to read the entire text of the Purchase Agreement and the Registration Rights Agreement.