SUNSHINE HEART,INC. (NASDAQ:SSH) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
As previously reported, on July 20, 2016 and October30, 2016,
Sunshine Heart,Inc. (the Company,
we or
us) entered into
securities purchase agreements with Sabby Volatility Warrant
Master Fund,Ltd. and Sabby Healthcare Master Fund,Ltd. (the
Purchasers) to
which the Company agreed, among other things, to issue warrants
(each a Warrant and
collectively, the Warrants) to
purchase shares of the common stock of the Company (the
Common
Stock) to the Purchasers to an exemption from the
registration requirements of the Securities Act of 1933, as
amended (the Securities Act),
provided in Section4(a)(2)thereof and/or Rule506 of Regulation D
promulgated thereunder (Regulation D),
and issued such Warrants on July26, 2016, November3, 2016 and
January11, 2017.
The Warrants issued on July26, 2016 became exercisable on
January26, 2017. The Warrants issued on November3, 2016 and
January11, 2017 provide that they were exercisable beginning on
the day that is the later of (i)the receipt of approval of the
Companys stockholders of a proposal to approve the issuance of
the shares of common stock underlying the Warrants (the
Stockholder
Approval) or (ii)the six month anniversary of the
date of issuance (the Initial Exercise
Date).
Subject to limited exceptions, a holder of Warrants does not have
the right to exercise any portion of its Warrants if the holder,
together with its affiliates, would beneficially own over 4.99%
of the number of shares of our common stock outstanding
immediately after giving effect to such conversion; provided,
however, that upon prior notice to us, the holder may increase
such percentage, but in no event to greater than 9.99%
(collectively, the Beneficial Ownership
Limitation). The exercise price and number of
shares of Common Stock issuable upon exercising the Warrants are
subject to adjustment in the event of any stock dividends and
splits, reverse stock split, recapitalization, reorganization or
similar transaction, as described therein. In addition, the
Warrants are subject to reduction of the exercise price if we
subsequently issue common stock or equivalents at an effective
price less than the current exercise price of such Warrants.
The per share exercise price of the Warrants issued on July26,
2016 is $5.10 and the per share exercise price of the Warrants
issued on November3, 2016 and January11, 2017 is $5.40, and all
such Warrants are exercisable for an aggregate of 868,079 shares
of the Companys Common Stock (adjusted to reflect the 1-for-30
reverse split of our common stock that was effected after trading
on January12, 2017). If such warrants were exercised for cash at
the current applicable exercise price with respect to all 868,079
shares of the Companys Common Stock, such exercise would result
in gross proceeds of approximately $4.65 million to the Company.
On February15, 2017, the Company and the Purchasers entered into
a letter agreement to encourage the Purchasers to exercise their
Warrants on or before March31, 2017. The letter agreement
provides that, in consideration for exercising the Warrants held
by the Purchasers during the period beginning on February15, 2017
to and including March31, 2017 (the Exercise Period),
the Company shall issue, promptly upon receipt of the cash
exercise price for any exercise, to the Purchaser or its
designee, a common stock purchase warrant (the New Warrants) to
Section4(a)(2)of the Securities Act, to purchase up to a number
of shares of Common Stock equal to 50% of the number of shares
issued to the Holders exercise of Warrants hereunder, which new
warrant(s)shall have an exercise price equal to consolidated
closing bid price of the Companys Common Stock as quoted on The
Nasdaq Capital Market on the date each New Warrant is issued. The
letter agreement also (i)amends the definition of Beneficial
Ownership Limitation in the Warrants to mean, solely for purposes
of any exercises of Warrants that occur during the Exercise
Period, 9.99% and (ii)amends the Initial Exercise Date of the
Warrants issued on November3, 2016 and January11, 2017 so that
such Warrants are exercisable on or after the receipt of
Stockholder Approval. Since such Stockholder Approval was
received on January9, 2017, such Warrants are immediately
exercisable as of the date of the letter agreement.
The New Warrants will be in the same form as the Warrants, except
(i)the exercise price will not be subject to reduction for
subsequent equity issuances at an effective price less than the
current exercise price of the New Warrants and (ii)the New
Warrants will not allow the holder to demand that the Company
purchase the New Warrants from the Holder in the event of a
fundamental transaction involving the Company.
On February15, 2017, following the execution of the letter
agreement described above, the Purchasers exercised Warrants to
purchase shares of the Companys Common Stock so that, after
such exercise, the Purchasers owned, in the aggregate, 9.9% of
the Companys Common Stock. The Company expects to receive gross
proceeds of $563,863 in connection with such exercise and will
issue the Purchasers New Warrants to purchase an aggregate of
104,419 shares of the Companys Common Stock. The New Warrants
will have a per share exercise price of $4.99.
The foregoing is only a brief description of the material terms
of the letter agreement and the New Warrants and does not
purport to be a complete description of the rights and
obligations of the parties thereunder and is qualified in its
entirety by reference to the letter agreement, which is filed
as Exhibit10.1 to this report, and the form of the New
Warrants, which is filed as Exhibit4.1 to this report, and each
is incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity
Securities
To the extent required by Item 3.02 of Form8-K, the information
contained in Item 1.01 of this report is incorporated herein by
reference. The issuance of the New Warrants and the shares of
Common Stock underlying such securities was or will be
completed under the exemption provided by Rule506 of Regulation
D of the Securities Act and/or Section4(a)(2)of the Securities
Act. Each of the investors has represented that it is an
accredited investor, as defined in Rule501 of Regulation D, and
that it is acquiring the securities for its own account, not as
nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the Securities
Act.
Item 3.03 Material Modification to Rights of Security
Holders.
To the extent required by Item 3.03 of Form8-K, the information
contained in Item 1.01 of this report is incorporated herein by
reference.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits
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ExhibitNumber |
|
Description |
|
4.1 |
Formof Warrant |
|
|
10.1 |
Letter Agreement dated February15, 2017 among the |
SUNSHINE HEART, INC. (NASDAQ:SSH) Recent Trading Information
SUNSHINE HEART, INC. (NASDAQ:SSH) closed its last trading session down -0.04 at 4.95 with 121,309 shares trading hands.
