| Item 1.01 |
Entry into a Material Definitive Agreement. |
Securities Purchase Agreement
On April 26, 2022, Tempest Therapeutics, Inc. (the “Company”), entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional accredited investors named therein (the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers in a private placement (the “Private Placement”), (i) an aggregate of 3,149,912 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $2.36 per share, and (ii), in lieu of shares of Common Stock to certain Purchasers, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 3,206,020 shares of Common Stock (the “Warrant Shares”) at a purchase price of $2.359 per Pre-Funded Warrant (representing the $2.36 per Share purchase price less the exercise price of $0.001 per share). Each Pre-Funded Warrant has an exercise price of $0.001 per Warrant Share. The Pre-Funded Warrants are exercisable at any time after their original issuance and will not expire.
Versant Vantage II, L.P. (together with its affiliated funds, “Versant”), a beneficial owner of more than 5% of the Company’s common stock, is a Purchaser in the Private Placement. Additionally, Thomas Woiwode, Ph.D., a member of the Company’s Board of Directors (the “Board”), is an affiliate of Versant. The Private Placement was approved unanimously by the disinterested members of the Board.
The Pre-Funded Warrants to be issued in the Private Placement will provide that the holder of the Pre-Funded Warrants will not have the right to exercise any portion of its Pre-Funded Warrants if such holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that the holder may increase or decrease the Beneficial Ownership Limitation by giving 61 days’ notice to the Company, but not to any percentage in excess of 19.99%.
The Private Placement closed on April 29, 2022. The Company received aggregate gross proceeds from the Private Placement of approximately $15.0 million, before deducting estimated offering expenses payable by the Company.
The foregoing descriptions of the Securities Purchase Agreement and the Pre-Funded Warrants do not purport to be complete and are qualified in their entirety by reference to such agreements, copies of which are filed as Exhibits 10.1 and 4.1 hereto, respectively, and incorporated by reference herein.
Registration Rights Agreement
Also on April 26, 2022, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Purchasers, pursuant to which the Company agreed to register for resale the Shares and the Warrant Shares held by the Purchasers (the “Registrable Securities”). Under the Registration Rights Agreement, the Company has agreed to file a registration statement covering the resale of the Registrable Securities by no later than May 23, 2022 (the “Filing Deadline”). The Company has agreed to use reasonable efforts to cause such registration statement to become effective as soon as practicable, but in any event no later than the 30th calendar day following the filing of the registration statement (or, in the event of a “limited” or a “full review” by the SEC, the 45th or 60th day, respectively, following the such filing date), provided, the Company is not required to cause the initial registration statement to become effective prior to June 7, 2022. The Company also agreed to use reasonable efforts to keep such registration statement effective until the date the Shares and Warrant Shares covered by such registration statement have been sold or may be resold pursuant to Rule 144 without restriction. The Company has agreed to be responsible for all fees and expenses incurred in connection with the registration of the Registrable Securities.
In the event (i) the registration statement has not been filed by the Filing Deadline, (ii) the registration statement has not been declared effective prior to the earlier of (A) two business days after the date which the Company is notified by the U.S. Securities and Exchange Commission (the “SEC”) that the registration statement will not be reviewed by the SEC staff or is not subject to further comment by the SEC staff (provided, that the Company shall not be required to cause the registration statement to become effective prior to June 7, 2022), or (B) 30 days following the Filing Deadline (or, in the event of “limited review” or “full review” by the SEC, 45 or 60 days, respectively, following the Filing Deadline) or (iii) after the registration statement has been declared effective by the SEC, sales cannot be made pursuant to the registration statement for any reason including by reason of a stop order or the Company’s failure to update such registration statement, subject to certain limited exceptions, then the Company has agreed to make pro rata payments to the Purchasers as liquidated damages in an amount equal to 1% of the aggregate amount invested by the Purchasers in the Registrable Securities per 30-day period or pro rata for any portion thereof for each such month during which such event continues, subject to certain caps set forth in the Registration Rights Agreement.
