ContraFect Corporation (NASDAQ:CFRX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry Into a Material Definitive Agreement.
On December 9, 2019, ContraFect Corporation (the Company) entered into a stock purchase agreement (the Stock Purchase Agreement) with Pfizer Inc. (Pfizer), to which the Company, in a private placement transaction (the Private Placement), agreed to issue and sell to Pfizer an aggregate of $3.0 million of shares (the Private Shares) of common stock, par value $0.0001 per share, at a purchase price equal to the price per share to be offered to the public in a concurrent public offering of common stock (which public offering is described in Item 8.01 of this Current Report on Form 8-K). In addition, to the Stock Purchase Agreement, Pfizer agreed, subject to certain limited exceptions, not to transfer the Private Shares for a period of nine months following the date of the closing of the Private Placement.
On December 12, the Company announced the closing of the Private Placement concurrently with the closing of the public offering. In accordance with the Stock Purchase Agreement, at the closing, the Company issued and sold 11,111,111 shares of common stock to Pfizer, at a purchase price of $0.27 per share, for aggregate gross proceeds of $3.0 million.
The Private Placement was exempt from registration to Section 4(a)(2) of the Securities Act of 1933, as amended, and corresponding provisions of state securities or blue sky laws, as a transaction by an issuer not involving a public offering. The investor represented that it was acquiring the Private Shares for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. Accordingly, the Private Shares have not been registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. Appropriate legends have been affixed to the securities issued in this transaction.
The representations, warranties and covenants contained in the Stock Purchase Agreement were made solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Stock Purchase Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Stock Purchase Agreement and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Companys periodic reports and other filings with the SEC.
The foregoing description of the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stock Purchase Agreement which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
Item 8.01. Other Events.
On December 10, 2019, the Company entered into an underwriting agreement (the Underwriting Agreement) with Maxim Group LLC (the Underwriter), relating to the offering, issuance and sale (the Public Offering) of 37,150,000 shares (the Public Shares) of the Companys common stock. The public offering price in the Public Offering was $0.27 per share. The Underwriter has agreed to purchase the Public Shares from the Company to the Underwriting Agreement at a price of $0.2538 per share. The net proceeds to the Company from the Public Offering are expected to be approximately $9.1 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
On December 12, the Company announced the closing of the Public Offering concurrently with the closing of the Private Placement.
The Company intends to use the net proceeds of the Public Offering and Private Placement to fund initiation of its Phase 3 DISRUPT trial of exebacase (CF-301) in Staph aureus bacteremia, including right-sided endocarditis, to fund advancement of its portfolio, including IND-enabling activities for an engineered gram-negative lysin directly targeting highly-resistant Pseudomonas aeruginosa, and for working capital and other general corporate purposes. The Company believes that its cash and cash equivalents, together with the net proceeds from the Public Offering and the Private Placement, will fund its operations into the second quarter of 2020.
The Public Offering was made to an effective shelf registration statement on Form S-3 (Registration Statement No. 333-228626) previously filed with and declared effective by the Securities and Exchange Commission (the SEC) and a related prospectus supplement and accompanying prospectus filed with the SEC.
The representations, warranties and covenants contained in the Underwriting Agreement were made solely for the benefit of the parties thereto and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Underwriting Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Underwriting Agreement and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Companys periodic reports and other filings with the SEC.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement which is filed as Exhibit 1.1 to this Current Report on Form 8-K and incorporated herein by reference.
A copy of the opinion of Latham & Watkins LLP relating to the legality of the issuance and sale of the Public Shares is attached as Exhibit 5.1 to this report.
Forward-Looking Statements
This current report contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements can be identified by words such as projects, may, will, could, would, should, believes, expects, anticipates, estimates, intends, plans, potential, promise or similar references to future periods. Examples of forward-looking statements in this current report include, without limitation, statements regarding the anticipated amount of net proceeds from the Public Offering and Private Placement and the intended use of such proceeds; and the Companys belief that its cash and cash equivalents will fund its operations into the second quarter of 2020. Forward-looking statements are statements that are not historical facts, nor assurances of future performance. Instead, they are based on the Companys current beliefs, expectations and assumptions regarding the future of its business, future plans, strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent risks and uncertainties, and actual results may differ materially from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, without limitation: the amount of and use of net proceeds from the Public Offering and Private Placement may differ from the Companys current expectations; the Company has incurred significant losses since its inception and may never achieve profitability; the Companys recurring losses from operations could raise substantial doubt regarding its ability to continue as a going concern; the Company has no product revenues; the Companys short operating history; the Companys need for substantial additional funding; the Company may be required to suspend or discontinue clinical trials due to adverse side effects or other safety risks; clinical trials of the Companys product candidates are subject to delays, which could result in increased costs and jeopardize its ability to obtain regulatory approval and commence product sales as currently contemplated; the Companys ability to attract and retain qualified personnel, and changes in management; difficulties in managing the Companys growth; and the important factors described under the caption Risk Factors in the Companys Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the SEC) on November 12, 2019 and its other filings with the SEC for the Public Offering. Any forward-looking statement made by the Company in this current report is based only on information currently
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