Attached files
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): January 6,
2020
Edesa Biotech,
Inc.
(Exact Name of
Registrant as Specified in its Charter)
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British Columbia, Canada
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001-37619
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N/A
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(State or Other Jurisdiction of
Incorporation)
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(Commission File
Number)
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(IRS Employer Identification
No.)
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100 Spy Court
Markham, Ontario, Canada L3R 5H6
(Address of Principal Executive
Offices)
(289)
800-9600
Registrant’s telephone
number, including area code
N/A
(Former name or former
address, if changed since last report)
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))
Securities registered pursuant to
Section 12(b) of the Act:
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Title of each
class
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Trading
Symbol(s)
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Name of exchange on which
registered
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Common Shares
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EDSA
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The Nasdaq Stock Market
LLC
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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 ☒
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 January 6, 2020, Edesa Biotech,
Inc. (“we”, “us”, “our”, or the
“company”) entered into a Securities Purchase Agreement
(the “Securities Purchase Agreement”) with certain
United States resident investors and Subscription Agreements (the
“Subscription Agreements”) with certain non-U.S.
investors providing for the issuance and sale by the company
of an aggregate of 1,355,380 of the company’s common
shares, no par value (the “Common Shares”), in a
registered direct offering (the “Offering”). In a
concurrent private placement (the “Private Placement”),
the company agreed to sell to such investors (i) Class A Purchase
Warrants to purchase an aggregate of up to 1,016,553 Common Shares,
or 0.75 of a Common Share for each Common Share purchased in the
Offering (the “Class A Purchase Warrants”), and (ii)
Class B Purchase Warrants to purchase an aggregate of up to 677,703
Common Shares, or 0.50 of a Common Share for each Common Share
purchased in the offering (the “Class B Purchase
Warrants,” and together with the Class A Purchase Warrants,
the “Purchase Warrants”). The price per Common Share
and associated Purchase Warrants is (i) $3.20 for investors other
than investors that are officers, directors, employees or
consultants of the company and (ii) $4.11 for each investor that is
an officer, director, employee or consultant of the company. The
closing of the Offering and concurrent Private Placement is
expected to occur on or about January 8, 2020, subject to the
satisfaction of customary closing conditions.
The Class A Purchase Warrants will
be exercisable at any time on or after the six (6) month
anniversary of the closing date of the Private Placement (the
“Class A Purchase Warrant Initial Exercise Date”), at
an exercise price of $4.80 per share and will expire on the third
anniversary of the Class A Purchase Warrant Initial Exercise Date.
The Class B Purchase Warrants will be exercisable at any time on or
after the six (6) month anniversary of the closing date of the
Private Placement (the “Class B Purchase Warrant Initial
Exercise Date”), at an exercise price of $4.00 per share and
will expire on the four month anniversary of the Class B Purchase
Warrant Initial Exercise Date. The exercise price and number of
Warrant Shares issuable upon the exercise of the Purchase Warrants
will be subject to adjustment in the event of any share dividends
and splits, reverse share split, recapitalization, reorganization
or similar transaction, as described in the Purchase Warrants.
Subject to limited exceptions, a holder of Purchase Warrants will
not have the right to exercise any portion of its Purchase Warrants
if the holder, together with its affiliates, would beneficially own
in excess of 9.99% of the number of Common Shares outstanding
immediately after giving effect to such exercise (the
“Beneficial Ownership Limitation”); provided, however,
that upon 61 days’ prior notice to the company, the holder
may increase the Beneficial Ownership Limitation, provided that in
no event shall the Beneficial Ownership Limitation exceed
9.99%.
Brookline Capital Markets, a
division of Arcadia Securities, LLC (“Brookline”), is
acting as placement agent in the United States in connection with
the Offering and Private Placement pursuant to a Financial Advisory
Agreement between us and Brookline dated November 5, 2019, as
amended. Upon the closing of the Offering and Private Placement,
Brookline will receive a placement agent fee equal to 6.5% of the
gross proceeds from sales arranged by Brookline (or 3.5% in the
case of sales to investors introduced by the company, or Company
Investors). Brookline will not receive any cash placement fee with
respect to non-U.S. investors. As additional compensation,
the company will issue to Brookline a warrant to purchase an
aggregate number of Common Shares equal to 1.25% of the number of
Common Shares sold in the Offering and concurrent Private Placement
to investors introduced by Brookline (the “Brookline
Warrant”). The Brookline Warrant will have a term of five
years and be exercisable at a price of $3.20 per share. Brookline
will not be entitled to any warrant compensation for securities
issued to non-U.S investors. The company has also agreed to
reimburse Brookline for certain expenses incurred by Brookline up
to an amount not to exceed $55,000.
In addition, the Financial Advisory
Agreement provides that, upon the successful completion of the
Offering, for a period of nine (9) months from the closing date of
the Offering, Brookline has a right of first refusal to act as a
co-manager for any financing of the company by means of a fully
marketed public offering, with no less than 20% of the total fees
paid to the underwriters.
The company estimates that the net
proceeds from the Offering and Private Placement will be $3.88
million, after deducting expenses and the placement agent fee
payable to Brookline. The company intends to use the net
proceeds from the Offering and Private Placement for general
corporate purposes, which may include working capital, capital
expenditures, and research and development
expenses.
The Common Shares are being offered
by the company pursuant to a shelf registration statement on
Form S-3 (File No. 333-233567) (the “Registration
Statement”), which was declared effective on September 12,
2019 by the Securities and Exchange Commission (the
“SEC”). The Common Shares may be offered only by
means of a prospectus, including a prospectus supplement, forming a
part of the effective Registration Statement. A prospectus
supplement relating to the offering will be filed with the SEC and
will be available on the SEC’s website at
http://www.sec.gov.
The Purchase Warrants, Warrant
Shares, the Brookline Warrant and the Common Shares issuable upon
exercise of the Brookline Warrant are not being registered under
the Securities Act of 1933, as amended (the “Securities
Act”) pursuant to the Registration Statement. The Purchase
Warrants, Warrant Shares, Brookline Warrant and the Common Shares
issuable upon exercise of the Brookline Warrant are being offered
pursuant to an exemption from the registration requirement of the
Securities Act provided in Section 4(a)(2) of the Securities Act
and Rule 506(b) promulgated thereunder. The Purchase Warrants,
Warrant Shares, Brookline Warrant and the Common Shares issuable
upon exercise of the Brookline Warrant may not be offered or sold
in the United States in the absence of an effective registration
statement or exemption from the registration requirement of the
Securities Act.
The company has agreed to register
for resale the Warrant Shares under the Securities Act within 45
calendar days of entering into the Securities Purchase Agreement
and is required to use commercially reasonable efforts to cause
such registration statement to become effective within 75 days of
the closing of the Offering and Private Placement, subject to
certain exceptions, and to keep such registration statement
effective at all times until no investor owns any Purchase Warrants
or Warrant Shares. After the initial exercise date of the Purchase
Warrants, if and only if no effective registration statement
registering, or no current prospectus available for, the resale of
the Warrant Shares is available, the investors may exercise the
Purchase Warrants by means of a “cashless
exercise.”
Attached as Exhibit 5.1 is the
opinion of Fasken Martineau DuMoulin LLP relating to the validity
of the issuance and sale of the Common Shares.
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The foregoing summaries of the
Financial Advisory Agreement, Securities Purchase Agreement,
Subscription Agreements, Purchase Warrants and the Brookline
Warrant do not purport to be complete and are qualified in their
entirety by reference to the definitive transaction documents,
copies of which are filed as exhibits to this Current Report.
Each of the Financial Advisory Agreement, Securities Purchase
Agreement and Subscription Agreements contain representations and
warranties that the respective parties made to, and solely for the
benefit of, the other parties thereto in the context of all of the
terms and conditions of that agreement and in the context of the
specific relationship between the parties. The provisions of the
Financial Advisory Agreement, Securities Purchase Agreement and
Subscription Agreements, including the representations and
warranties contained therein, are not for the benefit of any party
other than the parties to such agreements or as stated therein and
are not intended as documents for investors and the public to
obtain factual information about the current state of affairs of
the parties to those documents and agreements. Rather, investors
and the public should look to other disclosures contained in the
company’s filings with the SEC.
This Current Report does not
constitute an offer to sell Common Shares or Purchase Warrants or a
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state or jurisdiction in
which such an offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any
such state or jurisdiction.
This Current Report contains
forward-looking statements that involve risks and uncertainties,
such as statements related to the anticipated closing of the
Offering and Private Placement and the amount of net proceeds
expected from the Offering and Private Placement. The risks
and uncertainties involved include the company’s ability to
satisfy certain conditions to closing on a timely basis or at all,
as well as other risks detailed from time to time in the
company’s SEC filings.
Item 3.02.
Unregistered Sale of Equity Securities.
The information contained in Item
1.01 of this Current Report on Form 8-K in relation to the Purchase
Warrants, Warrant Shares and the Brookline Warrant is incorporated
herein by reference.
Item 8.01. Other Events
On January 6,
2020, the company issued a press release regarding the transactions
described in Item 1.01, a copy of which is attached hereto as
Exhibit 99.1 and incorporated herein by
reference.
Item 9.01. Financial Statements and
Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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Financial Advisory Agreement, dated
November 5, 2019, between Edesa Biotech, Inc. and Brookline Capital
Markets, a division of Arcadia Securities, LLC
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Amendment to Financial Advisory
Agreement, dated December 20, 2019, between Edesa Biotech, Inc. and
Brookline Capital Markets, a division of Arcadia Securities,
LLC
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Form of Class A Purchase Warrant to
be issued to investors
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Form of Class B Purchase Warrant to
be issued to investors
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Form of Warrant to be issued to
Brookline Capital Markets, a division of Arcadia Securities,
LLC
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Opinion of Fasken Martineau
DuMoulin LLP
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Form of Securities Purchase
Agreement between Edesa Biotech, Inc. and certain
investors
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Form of Subscription Agreement
between Edesa Biotech, Inc. and certain
investors
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23.1
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Consent of Fasken Martineau
DuMoulin LLP (included in Exhibit 5.1)
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Press release issued by Edesa
Biotech, Inc. dated January 6, 2020
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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.
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Edesa Biotech,
Inc.
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Date:
January 6, 2020
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By:
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/s/ Kathi
Niffenegger
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Name: Kathi Niffenegger |
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Title: Chief Financial Officer |
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