Citius Pharmaceuticals, Inc. (OTCMKTS:CTXR) Files An 8-K Entry into a Material Definitive Agreement
On February 16, 2021, we entered into a securities purchase agreement with certain healthcare-focused and institutional investors for the purchase of an aggregate of 50,830,566 shares of our common stock and accompanying warrants to purchase up to an aggregate of 25,415,283 shares of our common stock, at a purchase price of $1.505 per share and accompanying warrant in a registered direct offering priced at-the-market under Nasdaq rules. The aggregate gross proceeds for the sale of the shares and warrants was approximately $76.5 million. Subject to certain beneficial ownership limitations, the warrants are exercisable immediately upon issuance at an exercise price equal to $1.70 per share of common stock, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable for five years from the issuance date. The sale of these securities closed on February 19, 2021.
The net proceeds to us at the closing of the transaction, after deducting placement agent fees and expenses and the estimated offering expenses, were approximately $71.0 million. We intend to use the net proceeds from the offering for general corporate purposes, including pre-clinical and clinical development of our product candidates and working capital and capital expenditures.
The shares of common stock and accompanying warrants (and shares of common stock underlying the warrants) described above were offered to a “shelf” registration statement on Form S-3 (File No. 333-248748) filed with the Securities and Exchange Commission (SEC) and declared effective on September 25, 2020, and an additional registration statement on Form S-3 (File No. 333-253179) filed with the SEC on February 16, 2021 to Rule 462(b), which became effective automatically upon filing. We have filed a prospectus supplement in connection with the sale of these securities.
The representations, warranties and covenants contained in the securities purchase agreement were made solely for the benefit of the parties to the securities purchase agreement. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to the securities purchase agreement and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, our company. Accordingly, the form of securities purchase agreement is included with this filing only to provide investors with information regarding the terms of the transactions. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the securities purchase agreement, which subsequent information may or may not be fully reflected in public disclosures.
We previously entered into an engagement letter with H.C. Wainwright & Co., LLC, dated January 23, 2021, to which Wainwright agreed to serve as exclusive placement agent for the issuance and sale of the shares of common stock and warrants. We paid Wainwright an aggregate fee of approximately $5.36 million, which is equal to 7% of the gross proceeds received by us from the sale of the securities in the transactions. to the engagement letter, we also granted to Wainwright and its designees warrants to purchase up to an aggregate of 3,558,140 shares of common stock, which represents 7% of the aggregate number of shares sold in the transactions. The placement agent warrants have substantially the same terms as the investor warrants, except that the exercise price of the placement agent warrants is $1.881 per share. The placement agent warrants and the shares of common stock issuable upon exercise of the placement agent warrants are being issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state laws. We also paid Wainwright $35,000 for non-accountable expenses, up to $50,000 for accountable expenses and clearing expense in the amount of $15,950. The engagement letter has indemnity and other customary provisions for transactions of this nature.
The forms of the securities purchase agreement, the investor warrant and the placement agent warrant are filed as Exhibits 10.1, 4.1, and 4.2, respectively, to this Report and are hereby incorporated by reference herein. The foregoing descriptions of the securities purchase agreement, the investor warrant and the placement agent warrant are not complete and are qualified in their entirety by reference to Exhibits 10.1, 4.1 and 4.2, respectively. The foregoing description of the engagement letter is not complete and the engagement letter was previously filed as Exhibit 10.2 to our Form 8-K filed with the SEC on January 27, 2021.
The information contained above in Item 1.01 of this Report related to the unregistered placement agent warrants is incorporated herein by reference.
On February 17, 2021, we issued a press release announcing the pricing of the transaction described in Item 1.01 of this Report. On February 19, 2021, we issued a press release announcing the closing of the transactions described in Item 1.01 of this Report. A copy of each press release is attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are hereby incorporated by reference herein.
Citius Pharmaceuticals, Inc. Exhibit
EX-4.1 2 ea135915ex4-1_citiuspharma.htm FORM OF INVESTOR WARRANT ISSUED FEBRUARY 19,…
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About Citius Pharmaceuticals, Inc. (OTCMKTS:CTXR)
Citius Pharmaceuticals, Inc., formerly Trail One, Inc., is a pharmaceutical company engaged in developing and commercializing therapeutic products. The Company focuses on developing formulations to manage the delivery and compliance of approved drugs. The Company offers Suprenza, an orally disintegrating tablet and an obesity drug that can be administered with water or dissolved on tongue. The Company also focuses on development of its product candidate, Hydrocortisone-Lidocaine Cream, which is in Phase II study. Its Hydrocortisone-Lidocaine Cream is used to provide anti-inflammatory and anesthetic relief to persons suffering from grade I and II hemorrhoids. Citius Pharmaceuticals, LLC is its subsidiary. The Company has not generated any revenues.