The Company and Aspire Capital also may mutually agree to increase the number of shares that may be sold to as much as an additional 2,000,000 shares per business day.

In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount equal to at least 150,000 shares, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine, and a minimum trading price at least equal to 80% of the closing price of the Company’s common stock on the business day immediately preceding the VWAP Purchase Date or a higher price that may be determined by the Company. The purchase price per share to such VWAP Purchase Notice will be equal to the lesser of (i) the closing sale price of the Common Stock on the VWAP Purchase Date, or (ii) 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date, subject to certain exceptions.

The Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed. The Purchase Agreement provides that the Company and Aspire Capital shall not effect any sales under the Purchase Agreement on any purchase date where the closing sale price of the Company’s common stock is less than $0.25. There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of sales of the Company’s common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. The Purchase Agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. The Purchase Agreement may be terminated by Aspire Capital following specified events of default of the Company, including the lack of availability of a registration statement to register under the Securities Act sales of shares to Aspire Capital under the Purchase Agreement, the suspension from trading or delisting of the Company’s common stock, specified breaches by the Company of the terms of the Purchase Agreement and specified Company bankruptcy events. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of the Company’s common stock during any time prior to the termination of the Purchase Agreement. Any proceeds from the Company receives under the Purchase Agreement are expected to be used for working capital and general corporate purposes.

The foregoing is a summary description of certain terms of the Purchase Agreement and the Registration Rights Agreement and, by its nature, is incomplete. Copies of the Purchase Agreement and Registration Rights Agreement are filed herewith as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. All readers are encouraged to read the entire text of the Purchase Agreement and the Registration Rights Agreement.

The legal opinion of Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Company, relating to the shares of common stock being offered is filed as Exhibit 5.1 to this Current Report on Form 8-K.

The Company is providing certain preliminary (unaudited) financial information for its fiscal year ending December 31, 2019. Based on preliminary unaudited information and management estimates for the fiscal year ended December 31, 2019, and subject to the completion of the Company’s financial closing procedures, the Company currently estimates its cash, cash equivalents and investments as of December 31, 2019 to be approximately $20.5 million.

The Company’s estimate of its cash, cash equivalents and investments as of December 31, 2019 has been prepared by management in good faith based upon internal reporting and expectations. However, because the Company’s financial closing procedures for the fourth quarter and fiscal year ended December 31, 2019 have not been completed, this estimate is preliminary, is subject to change and may be revised as a result of management’s further review of its financial results for the fourth quarter and fiscal year ended December 31, 2019. As a result, there can be no assurance that the final results for this period will not differ materially from this estimate. The above information should not be viewed as a substitute for full financial statements prepared in accordance with generally accepted accounting principles. In addition, the above information is not necessarily indicative of the results to be achieved for any future period and is subject to risks and uncertainties, many of which are not within the Company’s control. The above information should be read together with the Company’s consolidated financial statements and notes to those consolidated financial statements and the other information in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, Quarterly Reports on Form 10-Q for the periods ended March 31, 2019, June 30, 2019 and September 30, 2019.

On February 27, 2020, the Company issued a press release announcing that it has entered into the Purchase Agreement with Aspire Capital. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.

As disclosed in the Company’s Quarterly Form on 10-Q for the quarter ended September 30, 2019, based on its then-available cash resources, recurring losses and cash outflows from operations since inception, an expectation of continuing operating losses and cash outflows from operations for the foreseeable future and the need to raise additional capital to finance its future operations, the Company concluded that it did not have sufficient cash on hand to support current operations for twelve months from the date of filing of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, and therefore it determined that there was substantial doubt about its ability to continue as a going concern. The $3,000,000 of proceeds from the sale of the 2,693,965 shares of common stock to Aspire Capital upon the execution of the Purchase Agreement is not expected to alleviate such concern. Accordingly, in connection with the future issuance of the Company’s audited financial statements for the fiscal year ended December 31, 2019, the Company’s management expects that it will conclude that there is substantial doubt about its ability to continue as a going concern and expects the report from its independent registered public accounting firm on such annual financial statements will contain an explanatory paragraph about such substantial doubt about its ability to continue as a going concern.

(d) Exhibits

(s)

CURIS INC Exhibit
EX-4.1 2 d857412dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this “Agreement”),…
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About Curis, Inc. (NASDAQ:CRIS)

Curis, Inc. is a biotechnology company. The Company is engaged in the development and commercialization of drug candidates for the treatment of human cancers. The Company’s drug candidate, CUDC-907, is an orally available, small molecule inhibitor of histone deacetylase (HDAC) and phosphatidylinositol-3-kinase (PI3K) enzymes. Its product pipeline includes CA-170, which is an oral small molecule drug candidate; CA-4948, which is an oral small molecule drug candidate that is designed to inhibit the interleukin-1 receptor-associated kinase 4 (IRAK4) kinase; Erivedge, which is an orally bioavailable small molecule, and is designed to selectively inhibit the Hedgehog signaling pathway; CUDC-427, which is an oral, small molecule Smac mimetic that is designed to promote cancer cell death by antagonizing inhibitor of apoptosis (IAP) proteins, and CUDC-305, which is an oral HSP90 inhibitor for the development in advanced lung cancer.