Item 1.01. Entry into a Material Definitive Agreement.
On November 18, 2022, Cassava Sciences, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Agreement”) with certain investors (each, including its successors and assigns, a “Purchaser,” and collectively the “Purchasers”), pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “Offering”) 1,666,667 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at an offering price of $30.00 per share, for gross proceeds of approximately $50 million.
The closing of the sale of the Shares under the Agreement occurred on November 22, 2022. The Agreement contains customary representations and warranties of the Company, termination rights of the parties, and certain indemnification obligations of the Company and ongoing covenants of the Company, including a prohibition on sales of Common Stock or securities convertible or exchangeable into Common Stock by the Company for a period of 90 days after the closing of the sale of the Shares under the Agreement, and a prohibition on the Company from entering into agreements for or effecting certain variable rate transactions or securities issuances at future determined prices for a period of 90 days after the closing of the sale of the Shares under the Agreement, in each case subject to certain exceptions.
The net proceeds of the Offering are estimated to be approximately $47.3 million, after deducting placement agent fees and other estimated offering expenses. The Company intends to use the net proceeds from this Offering for working capital and general corporate purposes, including development of simufilam, the Company’s lead drug candidate for the treatment of Alzheimer’s disease.
H.C. Wainwright & Co., LLC (“Wainwright”) served as the exclusive placement agent for the issuance and sale of the Shares. As compensation for such services, the Company paid Wainwright an aggregate cash fee equal to 5.0% of the gross proceeds received by the Company from the sale of the Shares.
The Shares were offered and sold by the Company through a prospectus supplement pursuant to the Company’s automatic "shelf" registration statement on Form S-3, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 10, 2021 and became effective immediately upon filing (File No. 333-252931) (the “Registration Statement”). Securities issued pursuant to the Registration Statement may only be offered by means of a prospectus supplement. The Company has filed with the SEC the prospectus supplement, together with the accompanying prospectus, used in connection with the offer and sale of the Shares. In addition, a copy of the opinion of Orrick, Herrington & Sutcliffe LLP relating to the legality of the issuance and sale of the Shares pursuant to the Agreement is filed as Exhibit 5.1 to this Current Report on Form 8-K, and is also filed with reference to, and is hereby incorporated by reference in, the Registration Statement.
The form of the Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K. The foregoing summaries of the terms of the Agreement is subject to, and qualified in its entirety by, the full text of such document, which is incorporated herein by reference. No statement in this document or the attached exhibits is an offer to purchase or a solicitation of an offer to sell the Company’s securities, and no offer, solicitation or sale will be made in any jurisdiction in which such offer, solicitation or sale is unlawful.