UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 2018
RITTER PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-37428 | 26-3474527 | ||
| (State or other jurisdiction | (Commission | (I.R.S. Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 1880 Century Park East, Suite 1000 | ||
| Los Angeles, California | 90067 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (310) 203-1000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01 Entry into a Material Definitive Agreement.
On October 30, 2018, Ritter Pharmaceuticals, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with the purchasers named therein (the “Purchasers”), pursuant to which the Company agreed to sell 6,000 shares of its newly designated Series B convertible preferred stock, with a stated value of $1,000 per share (the “Series B Shares”), together with common stock purchase warrants (the “Warrants”) to purchase 2,307,692 shares of its common stock (representing 50% of the aggregate number of shares of common stock into which the Series B Shares are convertible) to the Purchasers for aggregate gross proceeds of $6 million to the Company (the “Offering”). The initial conversion price of the Series B Shares is $1.30 per share, which is above the $1.23 per share closing price of the Company’s common stock as reported on the Nasdaq Capital Market on October 30, 2018. The initial conversion price of the Series B Shares is subject to customary adjustment in the event of future stock dividends and stock splits. The Warrants are immediately exercisable for a period of five years and have an initial exercise price of $1.30 per share, subject to customary adjustment in the event of future stock dividends and stock splits.
Pursuant to the terms of the Securities Purchase Agreement, certain Purchasers who owned shares of the Company’s Series A convertible preferred stock were also permitted to exchange (the “Exchange”) at the closing of the Offering, on a 1-for-1 share basis, their shares of Series A convertible preferred stock for shares of the Company’s newly designated Series C convertible preferred stock, with a stated value of $1,000 per share and convertible into shares of the Company’s common stock at an initial conversion price per share of $1.64 (the “Series C Shares” and, together with the Series B Shares, the Warrants and the shares of common stock issuable upon conversion of the Series B Shares and the Series C Shares and upon exercise of the Warrants, the “Securities”). The initial conversion price of the Series C Shares is subject to customary adjustment in the event of future stock dividends and stock splits. The maximum aggregate number of shares of common stock that may be issued by the Company upon conversion of the Series C convertible preferred stock is limited to 1,146,354 shares (the “Exchange Cap”), representing 19.99% of the shares of the Company’s common stock outstanding immediately prior to execution of the Securities Purchase Agreement, unless the Company obtains stockholder approval to issue shares in excess of the Exchange Cap in accordance with the applicable rules of the Nasdaq Capital Market.
The Company also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Purchasers on October 30, 2018, pursuant to which it agreed to file a registration statement covering the resale of the common stock issuable upon conversion of the Series B Shares and the Series C Shares and upon exercise of the Warrants acquired by the Purchasers in the Offering and the Exchange, as applicable.
The Offering closed on November 5, 2018. A.G.P./Alliance Global Partners (the “Placement Agent”) served as the exclusive placement agent and Roth Capital Partners acted as a financial advisor for the Offering. Pursuant to the terms and conditions of the Placement Agency Agreement, entered into by the Company and the Placement Agent on October 30, 2018, the Company agreed to pay the Placement Agent an aggregate cash fee equal to 7% of the aggregate gross proceeds raised in the Offering (less $750,000 paid by one of the Purchasers) and to reimburse the Placement Agent for up to $35,000 of certain of its expenses with respect to the Offering.
The Offering and the Exchange are intended to be exempt from registration pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder. The Securities were not registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements.
The foregoing description of the Offering and the Exchange is qualified in its entirety by reference to the Securities Purchase Agreement, the Warrants, the Registration Rights Agreement and the Placement Agency Agreement (the “Transaction Documents”), copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018. The representations, warranties and covenants contained in Transaction Documents were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to the Transaction Documents, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Transaction Documents are incorporated herein by reference only to provide investors with information regarding the terms of the Transaction Documents, and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the Commission.
Item 3.02 Unregistered Sales of Equity Securities.
The information called for by this Item 3.02 is contained in Item 1.01, which is incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On October 31, 2018, the Company filed Certificates of Designation of Preferences, Rights and Limitations (the “Certificates of Designation”) with the Secretary of State of Delaware, establishing the rights, preferences, privileges, qualifications, restrictions, and limitations relating to the Series B Shares and the Series C Shares, respectively. The Certificates of Designation became effective with the Secretary of the State of Delaware upon filing. Copies of the Certificates of Designation will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.
Item 8.01 Other Events.
On October 31, 2018, the Company issued a press release announcing that it had entered into the Securities Purchase Agreement with the Purchasers. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RITTER PHARMACEUTICALS, INC. | ||
| By: | /s/ Andrew J. Ritter | |
| Name: | Andrew J. Ritter | |
| Title: | President and Chief Executive Officer | |
Dated: November 5, 2018
Exhibit 99.1
Ritter Pharmaceuticals Announces Agreement for $6.0 Million At-Market Private Placement of Series B Convertible Preferred Stock and Warrants
LOS ANGELES (October 31, 2018) – Ritter Pharmaceuticals, Inc. (Nasdaq: RTTR) (“Ritter Pharmaceuticals” or the “Company”), a developer of novel therapeutic products that modulate the gut microbiome to treat gastrointestinal diseases (GI) with an initial focus on the development of RP-G28, a drug candidate with the potential to be the first FDA-approved treatment for lactose intolerance (LI), today announced that it has entered into a definitive agreement with certain accredited investors, including two current institutional holders of our Series A convertible preferred stock, a key vendor and a member of the Company’s board of directors, for a private placement of newly designated Series B convertible preferred stock and warrants.
The private placement is expected to close on November 2, 2018, subject to satisfaction of customary closing conditions. At closing, the Company expects to receive gross proceeds of approximately $6.0 million, before deducting placement agent fees and other offering expenses payable by the Company.
Ritter intends to use the net proceeds from the private placement to fund operations, including the Company’s ongoing Phase 3 clinical trial for RP-G28 through its completion and dissemination of top-line results, and for working capital and general corporate purposes.
The securities being offered in the private placement consist of 6,000 shares of a newly designated Series B convertible preferred stock of the Company, with a stated value of $1,000 per share and convertible into shares of our common stock at an initial conversion price per share of $1.30 (subject to adjustment), which is above the $1.23 per share closing price of our common stock as reported on the Nasdaq Capital Market on October 30, 2018. In addition, each investor will receive a warrant to purchase a number of shares of common stock equal to 50% of the aggregate number of shares of common stock into which their Series B convertible preferred stock is initially convertible. The warrants will be exercisable immediately for a five-year period and have an initial exercise price of $1.30 per share (subject to adjustment). Certain investors in the private placement who currently own shares of our Series A convertible preferred stock will also exchange, on a 1-for-1 share basis, their Series A preferred shares for shares of a newly designated Series C convertible preferred stock of the Company, with a stated value of $1,000 per share and convertible into shares of our common stock at an initial conversion price per share of $1.64 (subject to adjustment). The maximum aggregate number of shares of common stock that may be issued by the Company upon conversion of the Series C convertible preferred stock will be limited to 1,146,354 shares, representing 19.99% of the shares of our common stock outstanding immediately prior to execution of the definitive agreement for the private placement, unless we obtain stockholder approval to issue shares in excess of the Exchange Cap in accordance with applicable rules of the Nasdaq Capital Market.
A.G.P./Alliance Global Partners is serving as the exclusive placement agent for the transaction.
The securities issued and sold in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act. The Company has agreed to file a registration statement with the Securities and Exchange Commission to register the resale of the shares of common stock issuable upon conversion of the Series B preferred shares and the Series C preferred shares and upon exercise of the warrants described above.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. Any offering of the securities under the resale registration statement described above will only be by means of a prospectus.
About Ritter Pharmaceuticals
Ritter Pharmaceuticals, Inc. (www.RitterPharma.com, @RitterPharma) develops novel therapeutic products that modulate the gut microbiome to treat gastrointestinal diseases. The Company’s lead product candidate, RP-G28, has the potential to become the first FDA-approved treatment for lactose intolerance, a condition that affects millions of people worldwide. RP-G28 is in Phase 3 clinical development with its first Phase 3 study current underway. The Company is further exploring the therapeutic potential that gut microbiome changes may have on treating/preventing a variety of diseases including: gastrointestinal diseases, cancer, metabolic, and liver disease.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that express the current beliefs and expectations of Ritter Pharmaceuticals’ management, including but not limited to statements related to Ritter’s ability to complete the financing and its use of proceeds. Any statements contained herein that do not describe historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results, performance and achievements to differ materially from those discussed in such forward-looking statements. Some of the factors that could affect our actual results are included in the periodic reports on Form 10-K and Form 10-Q that we file with the Securities and Exchange Commission. Ritter cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to update or revise forward-looking statements, except as otherwise required by law, whether as a result of new information, future events or otherwise.
Contacts
Investor Contact:
John
W. Beck
310-203-1000
john@ritterpharma.com
Media Contact:
Jules
Abraham
CoreIR
917-885-7378
julesa@coreir.com