Entry into a Material Definitive Agreement

On June 29, 2023, CytomX Therapeutics, Inc. (the "Company") reported to have entered into a unit purchase agreement (the "Purchase Agreement") with certain accredited investors (the "Purchasers") (Filing, CytomX Therapeutics, JUN 29, 2023, View Source [SID1234633030]). The Purchase Agreement provides for the sale and issuance by the Company of an aggregate of: (i) pre-funded warrants (the "Pre-Funded Warrants") to purchase up to 14,423,077 shares of the Company’s common stock, $0.00001 par value per share (the "Common Stock"), (ii) Tranche 1 Warrants (the "Tranche 1 Warrants") to purchase up to 5,769,231 shares of Common Stock (or Pre-Funded Warrants in lieu thereof) and (iii) Tranche 2 Warrants (the "Tranche 2 Warrants" and collectively with the Tranche 1 Warrants, the "Tranche Warrants", and further, the Tranche Warrants collectively with the Pre-Funded Warrants, the "Securities") to purchase up to 5,769,231 shares of Common Stock (or Pre-Funded Warrants in lieu thereof) (collectively, the "Private Placement"). The combined price per Pre-Funded Warrant and accompanying Tranche Warrants is $2.08. The Pre-Funded Warrants are immediately exercisable at an exercise price of $0.00001 per share and have a term of 20 years. The Pre-Funded Warrants and the Tranche Warrants are immediately separable and were issued separately. The closing of the Private Placement is expected to occur on July 3, 2023 (the "Closing"), subject to the satisfaction of customary closing conditions.

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A holder (together with its affiliates) may not exercise any portion of a Pre-Funded Warrant or Tranche Warrant to the extent that the holder would own more than 9.99% of the Company’s Common Stock outstanding immediately after exercise. However, upon at least 61 days’ prior notice from the holder to the Company, a holder with a 9.99% ownership blocker may increase or decrease the amount of ownership of outstanding Common Stock after exercising the holder’s Warrant up to 19.99% of the Company’s Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants and Tranche Warrants.

The Tranche Warrants are immediately exercisable. Each Tranche 1 Warrant has an initial exercise price of $4.16 per share of Common Stock and each Tranche 2 Warrant has an initial exercise price of $6.24 per share of Common Stock, in each case subject to certain adjustments. The Tranche 1 Warrants expire on July 3, 2025 and the Tranche 2 Warrants expire on July 3, 2026.

If, prior to the expiration date of either the Tranche 1 Warrants or Tranche 2 Warrants, the Company sells shares of Common Stock or derivative securities convertible into or exercisable for Common Stock (other than Exempted Securities as defined in the Tranche Warrant) in one or more related transactions primarily for the purpose of raising capital at a Weighted-Average Price (as described below) below the exercise price of $4.16, then the initial exercise price of both the Tranche 1 Warrants and Tranche 2 Warrants will be automatically reset upon exercise to an exercise price (the "Adjusted Exercise Price") that is the midpoint between the initial exercise price of the Tranche 1 Warrant and the Tranche 2 Warrant, as applicable, and the lowest Weighted-Average Price per share at which the Company sells shares of Common Stock or derivative securities convertible into or exercisable for Common Stock in such subsequent offering prior to the exercise date; provided, that the Adjusted Exercise Price will not be reduced below $2.08 per share. The Weighted-Average Price shall be calculated as the weighted-average common stock equivalent price of the equity securities sold in such transaction(s) (excluding any derivative securities with an exercise or conversion price that is above the closing sale price as of the time of pricing such offering(s)). In no event will the exercise price for the Tranche Warrants be adjusted more than once pursuant to this adjustment mechanism.

The exercise price and the number of shares of Common Stock issuable upon the exercise of the Pre-Funded Warrants and the Tranche Warrants are subject to adjustment upon the occurrence of specific events, including stock dividends, stock splits, reclassifications and combinations of the Company’s Common Stock.

The aggregate gross proceeds to the Company from this offering are approximately $30.0 million, excluding any proceeds the Company may receive upon exercise of the Tranche Warrants and the Pre-Funded Warrants. No underwriter or placement agent participated in the offering.

The Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to Closing and indemnification obligations of the Company and the Purchasers. The representations, warranties and covenants contained in the Purchase Agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties.

The Company has agreed to file a resale registration statement with the Securities and Exchange Commission on or before the date that is 60 calendar days after the Closing, to register the resale of the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants and the Tranche Warrants. The foregoing description of the Purchase Agreement, Pre-Funded Warrants and Tranche Warrants is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, form of Pre-Funded Warrant and form of Tranche Warrant, which are filed as Exhibits 10.1, 4.1 and 4.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.