UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry Into a Material Definitive Agreement. |
Private Placement
On October 18, 2023, Celcuity Inc., a Delaware corporation (the “Company”), entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain investors (the “Investors”) pursuant to which the Company agreed to sell to the Investors in a private placement (the “Private Placement”) pre-funded warrants (the “Warrants”) to purchase up to 5,747,787 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). Each Warrant to purchase one share has a purchase price of $8.699 per share, and an exercise price of $0.001 per share for the Common Stock issuable upon exercise of the Warrant (the “Warrant Shares” and together with the Warrants, the “Securities”) (for aggregate consideration equating to $8.70 per Warrant Share).
The closing of the Private Placement occurred on October 20, 2023 (the “Closing Date”) and resulted in gross proceeds to the Company of approximately $50 million, before deducting offering expenses payable by the Company. The Company expects to use the net proceeds to advance clinical development of gedatolisib and for general corporate purposes.
Each Warrant is immediately exercisable and will not expire. Under the terms of the Warrants, the Company may not effect the exercise of any such Warrant, and a holder will not be entitled to exercise any portion of any Warrant, if, upon giving effect to such exercise, the aggregate number of shares of Common Stock beneficially owned by the holder (together with its affiliates, other persons acting or who could be deemed to be acting as a group together with the holder or any of the holder’s affiliates, and any other persons whose beneficial ownership of Common Stock would or could be aggregated with the holder’s or any of the holder’s affiliates for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) would exceed 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Securities and Exchange Commission (the “Maximum Percentage”). A holder may reset the Maximum Percentage to a higher percentage (not to exceed 19.99%), effective 61 days after written notice to the Company, or a lower percentage, effective immediately upon written notice to the Company. Any such increase or decrease will apply only to that holder and not to any other holder of Warrants.
The Securities Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties and termination provisions.
Registration Rights Agreement
On October 18, 2023, in connection with the Securities Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to register for resale the (i) Warrant Shares then issued or issuable upon exercise of the Warrants and (ii) any other securities issued or issuable with respect to, in exchange for or in replacement of, the Warrant Shares issued and sold pursuant to the Securities Purchase Agreement (collectively, the “Registrable Securities”). Under the Registration Rights Agreement, the Company has agreed to file a registration statement covering the resale by the Investors of the Registrable Securities no later than 30 days following the Closing Date (the “Filing Deadline”). The Company has agreed to use commercially reasonable efforts to cause such registration statement to become effective and to keep such registration statement effective until such time as there are no longer Registrable Securities held by the Investors. The Company has agreed to be responsible for all fees and expenses incurred in connection with the registration of the Registrable Securities.
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In the event that a registration statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, or if (A) a registration statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five business days after the SEC informs the Company that no review of such registration statement will be made or that the SEC has no further comments on such registration statement and (ii) the 60th day after the Closing Date (or the 90th day if the SEC reviews such registration statement), or (B) after a registration statement has been declared effective by the SEC, sales cannot be made pursuant to such registration statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update such registration statement), but excluding any Allowed Delay (as defined in the Registration Rights Agreement) or, if the registration statement is on Form S-1, for a period of 20 days following the date on which the Company files a post-effective amendment to incorporate the Company’s Annual Report on Form 10-K, then the Company has agreed to make pro rata payments to each holder as liquidated damages in an amount equal to 1.0% of the aggregate amount paid pursuant to the Securities Purchase Agreement by such Investor for each 30-day period or pro rata for any portion thereof for each such month during which such event continues, provided that the maximum aggregate amounts payable as liquidated damages shall not exceed 6.0% of the aggregate amount invested by each such holder in the Registrable Securities then held by the holder.
The Company has granted the Investors customary indemnification rights in connection with the registration statement, including for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”). The Investors have also granted the Company customary indemnification rights in connection with the registration statement.
The representations, warranties and covenants contained in the Warrants, the Securities Purchase Agreement and the Registration Rights Agreement were made solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties. The foregoing summaries do not purport to be complete and are qualified in their entirety by reference to the full text of the form of Warrant, the Securities Purchase Agreement, and the Registration Rights Agreement, which are filed as Exhibits 4.1, 10.1, and 10.2 hereto, respectively, and incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information contained above in Item 1.01 related to the Private Placement is hereby incorporated by reference into this Item 3.02.
Based in part upon the representations of the Investors in the Securities Purchase Agreement, the offering and sale of the Securities is exempt from registration under Section 4(a)(2) of the Securities Act, Rule 506 of Regulation D promulgated under the Securities Act, and corresponding provisions of state securities or “blue sky” laws. The sale of the Securities by the Company in the Private Placement was not registered under the Securities Act or any state securities laws and the Securities may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements. The sale of the Securities did not involve a public offering and was made without general solicitation or general advertising. In the Securities Purchase Agreement, each Investor represented that it is an accredited investor, as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and was acquiring the Securities for investment purposes only and not with a view to any resale, distribution or other disposition of the Securities in violation of the United States federal securities laws.
| Item 8.01 | Other Events. |
On October 18, 2023, the Company issued a press release announcing the Private Placement. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Securities discussed herein, nor shall there be any offer, solicitation, or sale of such Securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 4.1 | Form of Pre-Funded Warrant |
| 10.1 | Securities Purchase Agreement, dated October 18, 2023, by and among the Company and the Investors named therein |
| 10.2 | Registration Rights Agreement, dated October 18, 2023, by and among the Company and the Investors named therein |
| 99.1 | Press Release, dated October 18, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
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.
Date: October 23, 2023
| CELCUITY INC. | ||
| By: | /s/ Brian F. Sullivan | |
| Brian F. Sullivan | ||
| Chief Executive Officer | ||
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