Item 1.01 Entry into a Material Definitive Agreement
On January 9, 2020, Cidara Therapeutics, Inc. (the "Company") entered into an
Investment Agreement (the "Investment Agreement") with a certain affiliate of
BVF Partners L.P. ("BVF") and Stonepine Capital, LP, each an existing security
holder of the Company (together, the "Backstop Parties"). Pursuant to the
Investment Agreement, the Backstop Parties agreed to purchase shares of the
Company's common stock, par value $0.0001 per share (the "Common Stock") and/or
Series X convertible preferred stock, par value $0.0001 per share (the
"Preferred Stock") having an aggregate value equal to the value of all shares
(if any) offered but not purchased pursuant to the exercise of rights in the
Company's proposed rights offering, including any exercise of rights by the
Backstop Parties (the "Rights Offering"), up to $30,000,000 (the "Backstop
Commitment"). Pursuant to the Investment Agreement, the Common Stock and/or
Preferred Stock will be issued and sold for a subscription price of $2.51 and
$25.10 per share, respectively. The Investment Agreement contains customary
representations, warranties and covenants by the parties, customary conditions
to closing, other obligations of the parties, and termination provisions. The
closing of the transactions contemplated under the Investment Agreement are
expected to occur as soon as practicable following two business days after the
expiration of the Rights Offering, currently contemplated to be February 13,
2020. The offer and sale of the Common Stock and/or Preferred Stock are made in
reliance on the exemption from registration afforded by Section 4(a)(2) of the
Securities Act of 1933, as amended.
Each share of Preferred Stock is convertible into 10 shares of Common Stock.
Each share will be convertible at the option of the holder at any time, provided
that the holder will be prohibited from converting into Common Stock if, as a
result of such conversion, the holder, together with its affiliates, would
beneficially own a number of shares above a conversion blocker, which is
initially set at 9.99% of the total Common Stock then issued and outstanding
immediately following the conversion of such shares. In the event of the
Company's liquidation, dissolution or winding up, holders of Preferred Stock
will participate pari passu with any distribution of proceeds to holders of
Common Stock. Holders of Preferred Stock are entitled to receive dividends on
shares of Preferred Stock equal (on an as-converted basis) to and in the same
form as dividends actually paid on the Common Stock or other junior securities.
Shares of Preferred Stock generally have no voting rights, except as required by
law.
As of January 8, 2020, BVF beneficially owned approximately 7.9% of the
Company's total outstanding shares of Common Stock (and approximately 21.1% on
an as-converted basis).
The Company will not pay a fee to the Backstop Parties in connection with the
Backstop Commitment, however, the Company has agreed to reimburse up to $50,000
of the Backstop Parties' reasonable and documented legal fees and expenses in
connection with the Investment Agreement and the Rights Offering.
The above description of the Investment Agreement does not purport to be
complete and is qualified in its entirety by reference to the Investment
Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated herein by reference.
A summary of the rights, preferences and privileges of the Preferred Stock
described above does not purport to be complete and is qualified in its entirety
by reference to the Certificate of Designation of Preferences, Rights and
Limitations of Series X Convertible Preferred Stock, which is filed as Exhibit
3.1 to the Company's Current Report on Form 8-K, filed with the Securities and
Exchange Commission on May 21, 2018.
Item 8.01 Other Events.
On January 10, 2020, the Company issued a press release announcing the record
date and the commencement and expiration dates of the Rights Offering. A copy of
the press release is filed as Exhibit 99.1 hereto.
In addition, on January 10, 2020, the Company is announcing that it now
currently expects to announce topline results for the Phase 3 ReSTORE Treatment
trial in late 2020.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Investment Agreement, dated January 9, 2020, by and among the Company
and the signatories thereto.
99.1 Press release dated January 10, 2020.
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