Curis, Inc. (NASDAQ:CRIS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
Purchase Agreement and Registration Rights Agreement with Aspire Capital
On February 26, 2020, Curis, Inc. (the Company), entered into a common stock purchase agreement (the Purchase Agreement) with Aspire Capital Fund, LLC, an Illinois limited liability company (Aspire Capital), which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $30.0 million of shares of the Companys common stock over the 30-month term of the Purchase Agreement. Upon execution of the Purchase Agreement, the Company agreed to sell to Aspire Capital 2,693,965 shares of common stock at $1.1136 per share for proceeds of $3,000,000.In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, the Company issued to Aspire Capital 646,551 shares of the Companys common stock (the Commitment Shares).Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the Registration Rights Agreement), in which the Company agreed to file with the SEC one or more registration statements, as necessary, and to the extent permissible and subject to certain exceptions, to register under the Securities Act of 1933, as amended (the Securities Act), for the sale of the shares of the Companys common stock that have been and may be issued to Aspire Capital under the Purchase Agreement. The Company has filed with the SEC a prospectus supplement to the Companys effective shelf registration statement on Form S-3 (File No. 333-224627) registering the shares of common stock that may be offered to Aspire Capital from time to time.
Under the Purchase Agreement, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a Purchase Notice), directing Aspire Capital (as principal) to purchase up to 150,000 shares of the Companys common stock per business day, up to the remaining $27.0 million of the Companys common stock that may be sold under the Purchase Agreement at a per share price (the Purchase Price) equal to the lesser of:
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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 managements 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 Companys control. The above information should be read together with the Companys consolidated financial statements and notes to those consolidated financial statements and the other information in the Companys 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.
