Item 1.01. Entry into Material Definitive Agreement.
On
December, 22, 2022, Indaptus Therapeutics, Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”)
and a registration rights agreement (the “Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln
Park”), pursuant to which Lincoln Park has committed to purchase up to $20.0 million of the Company’s common stock, $0.01
par value per share.
Under
the terms and subject to the conditions of the Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln
Park, and Lincoln Park is obligated to purchase up to $20.0 million of the Company’s common stock. Such sales of common stock by
the Company, if any, will be subject to certain limitations, and may occur from time to time, at the Company’s sole discretion,
over the 36-month period (unless extended to a 48-month period pursuant to the Purchase Agreement) commencing on the date that a registration
statement covering the resale of shares of common stock that have been and may be issued under the Purchase Agreement, which the Company
agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is
declared effective by the SEC and a final prospectus in connection therewith is filed and the other conditions set forth in the Purchase
Agreement are satisfied.
Lincoln
Park has no right to require the Company to sell any shares of common stock to Lincoln Park, but Lincoln Park is obligated to make purchases
as the Company directs, subject to certain conditions. There are no upper limits on the price per share that Lincoln Park must pay for
shares of common stock. Actual sales of shares of common stock to Lincoln Park will depend on a variety of factors to be determined by
the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock and
determinations by the Company as to the appropriate sources of funding for the Company and its operations.
The
net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of
its stock to Lincoln Park. The Company expects that any proceeds received by the Company from such sales to Lincoln Park will be used
for working capital and general corporate purposes.
The
Company has agreed with Lincoln Park that it will not enter into certain “variable rate” transactions with any third
party for a period defined in the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any
direct or indirect short selling or hedging of the Company’s shares.
As
consideration for Lincoln Park’s irrevocable commitment to purchase shares of the Company’s common stock upon the terms of
and subject to satisfaction of the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, the Company
(i) issued to Lincoln Park 142,450 shares of common stock, as the initial commitment shares, and (ii) will issue additional commitment
shares, of common stock equal to $125,000 divided by the arithmetic average of the ten (10) Nasdaq Official Closing Prices for the common
stock immediately preceding the date that the Company has sold over $10,000,000 purchase shares to Lincoln Park, (to be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction)
provided that the additional commitment shares number shall be no greater than 76,220.
The
Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification
obligations of the parties. The Company has the right to terminate the Purchase Agreement at any time following the satisfaction of conditions
for the commencement of sales under the Purchase Agreement, without fee, cost or penalty upon one business day notice. During any “event
of default” under the Purchase Agreement, Lincoln Park does not have the right to terminate the Purchase Agreement; however, the
Company may not initiate any regular or other purchase of shares by Lincoln Park, until such event of default is cured. In addition,
in the event of bankruptcy proceedings by or against the Company, the Purchase Agreement will automatically terminate.
The
foregoing descriptions of the Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to
the full text of such agreements, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and each of which is incorporated
herein in its entirety by reference. The representations, warranties and covenants contained in such 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.