Enumeral Biomedical Holdings, Inc. (OTCBB:CEUL) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On May 19, 2017 (the Closing Date), Enumeral Biomedical Holdings,
Inc. (the Company) entered into a Subscription Agreement (the
Subscription Agreement) with certain accredited investors (the
Buyers), to which the Buyers purchased 668 Units (the Units) of
the Companys securities, at a purchase price of $1,000 per Unit
(the Offering). Each Unit consists of (i) a 12% Senior Secured
Promissory Note (the Notes), with a face value of $1,150, and
(ii) a warrant (the Investor Warrant) to purchase 11,500 shares
of the Companys common stock, par value $0.001 per share (Common
Stock), exercisable until five years after the date of the
closing, at an exercise price of $0.10 per share (subject to
adjustment in certain circumstances). The Company received an
aggregate of $668,000 in gross cash proceeds, before deducting
placement agent fees and expenses, in connection with the sale of
the Units.The Company expects to use the net proceeds of
approximately $548,000 from the sale of the Units to fund the
Companys research and development, general corporate expenses and
working capital. The Company may hold additional closings of the
Offering, subject to an extension of up to 30 days following May
19, 2017, upon the mutual agreement of the Company and the
Placement Agents (as defined below).
The proceeds for the sale of the Units were held in escrow,
pending closing of the purchase and sale of the Units, to the
terms of an Escrow Agreement (the Escrow Agreement) among the
Company, the Placement Agents and the escrow agent.
The Companys obligations under the Notes are secured, to the
terms of an Intellectual Property Security Agreement (the
Security Agreement), dated as of the Closing Date, among the
Grantors (as defined below), the Buyers and the collateral agent
for the Buyers named therein, by a first priority security
interest in all now owned or hereafter acquired intellectual
property of the Company and Enumeral Biomedical Corp., a
wholly-owned subsidiary of the Company (the Subsidiary and
together with the Company, the Grantors), except to the extent
such intellectual property cannot be assigned or the creation of
a security interest would be prohibited by applicable law or
contract.
Interest on the Notes is payable on the face value of the Notes
at the rate of 12% per annum, which is cumulative and due and
payable in shares of Common Stock (the Interest Shares) on the
applicable conversion date, or in cash in the case of a
redemption of the Notes by the Company (each as further described
below). The Notes have a stated maturity date of 12 months from
the Closing Date. The Notes will rank senior to all existing
indebtedness of the Company, except as otherwise set forth in the
Notes.
In the event of any liquidation, dissolution or winding up of the
Company, holders of the Notes will be entitled to receive, out of
assets available therefor, an amount equal to 124% of the
outstanding principal amount of the Notes, together with accrued
and unpaid interest due thereon. In the event of a sale of the
Company during the term of the Notes, at the closing of such
sale, at the option of each holder of the Notes, a holder of a
Note will be entitled to receive an amount equal to 200% of the
outstanding principal amount of the Notes, together with accrued
and unpaid interest due thereon; provided, that such amount will
be paid in either cash of securities of the acquiring entity at
such acquiring entitys discretion.
The Notes are convertible at the option of the holder, in whole
or in part, into shares of Common Stock (the Conversion Shares
and together with the Interest Shares, the Repayment Shares) at
any time after the earlier of (i)the date a registration
statement registering the Repayment Shares is declared effective
by the SEC or (ii)six months after the date of the initial
closing of the Offering. If no conversion has taken place within
twelve months after the Closing Date, the Notes, together with
accrued and unpaid interest thereon, will automatically convert
into Repayment Shares.
The conversion price per share of Common Stock in either event
listed above is the lesser of (i)$0.10 per share (subject to
adjustment in certain circumstances), or (ii)75% of the volume
weighted average price of the Common Stock during 10 consecutive
trading days ending on the trading day immediately prior to the
conversion date, subject to a floor of $0.03 per share (which
floor is subject to full ratchet adjustment in certain
circumstances if the Company issues Common Stock, or Common Stock
equivalents, at a price below $0.03 per share of Common Stock,
and to proportionate adjustment in certain other circumstances).
The Notes provide that the outstanding principal amount of the
Notes, together with accrued and unpaid interest due thereon,
will convert automatically into Common Stock on the date on which
the Company completes and closes an offering involving the sale
of at least $5,000,000 of equity securities or securities
convertible into or exercisable for equity securities by the
Company (a Qualified Financing). At the closing of a Qualified
Financing, all outstanding principal and accrued interest then
due on the Notes shall automatically be converted into a number
of shares of Common Stock based upon a 25% discount to the lesser
of (i) the lowest price at which Common Stock is sold in the
Qualified Financing, or (ii) the lowest price at which securities
sold in the Qualified Financing can be exercised for or converted
into Common Stock.
The Notes provide that if the Company fails to pay any principal
amount or interest due under the Notes within 5 business days of
the date such payment is due, or upon the occurrence of other
events of default under the terms of the Notes (which such event
of default continues beyond any applicable cure period), the
entire unpaid principal balance of the Note, together with any
accrued and unpaid interest thereon, will become due and payable,
without presentment, demand, protest or notice of any kind.
to the terms of a Placement Agency Agreement (the Placement
Agency Agreement), dated as of May 12, 2017, between the Company
and the placement agents for the Offering (the Placement Agents),
the Placement Agents are paid a commission equal to ten percent
(10%) of the gross proceeds at each closing of the Offering (the
Placement Agent Cash Fee). The Placement Agency Agreement also
provides that the Placement Agents, or their designees, will
receive five-year warrants (the Placement Agent Warrants) to
purchase a number of shares of Common Stock at an exercise price
of $0.05 per share equal to 10% of the number of Conversion
Shares issuable upon conversion of the Notes issues at each
closing of the Offering, based on a conversion price of $0.10 per
share. In accordance with the terms of the Placement Agency
Agreement, on the Closing Date the Company issued Placement Agent
Warrants to purchase an aggregate of 768,200 shares of Common
Stock on the terms set forth above to the Placement Agents.
The Placement Agency Agreement also provides that if, within 12
months of the first closing of the Offering, the Company
completes a financing or similar transaction (a Subsequent
Financing) with a party introduced to the Company by the
Placement Agents in connection with the Offering, and a Placement
Agent does not participate in such financing or similar
transaction, the Placement Agent shall be entitled to receive a
Placement Agent Cash Fee and Placement Agent Warrants for such
Subsequent Financing in the same manner as calculated for this
Offering.
to the terms of the Placement Agency Agreement, the Company
agreed to pay (i) one Placement Agents legal counsels fees
equal to the sum of 1% of the gross proceeds of each closing,
but in no event less than $15,000 for all closings, (ii)
another Placement Agents legal counsels fees in an amount not
to exceed $40,000, (iii) a Placement Agents legal counsels
reasonable out of pocket expenses related to the Offering (not
to exceed $3,000 in the aggregate), and (iv) a $10,000
non-accountable expense allowance to one of the Placement
Agents.
The Placement Agency Agreement also provides that the Company
will indemnify the Placement Agents and their respective agents
to the fullest extent permitted by law, against certain
liabilities that may be incurred in connection with the
Offering, including certain civil liabilities under the
Securities Act of 1933, as amended (the Securities Act), and,
where such indemnification is not available, to contribute to
the payments the Placement Agents and their respective
sub-agents may be required to make in respect of such
liabilities.
The Company has granted a right of first refusal to each Buyer
to participate on a pro rata basis of any subsequent securities
offerings by the Company on the same terms and conditions on
which such securities are proposed to be offered to other
persons for twelve (12) months following the first closing of
the Offering; provided that such right shall not apply to
securities issued (i) to any merger, acquisition, stock or
asset purchase, or business combination (each, a Strategic
Transaction) or (ii) to any investors in connection with any
such Strategic Transaction where the raising of capital is a
condition to such transaction.
to a Registration Rights Agreement, dated as of the Closing
Date (the Registration Rights Agreement), the Company has
granted registration rights to each Buyer with respect to the
Repayment Shares and the shares of Common Stock issuable upon
exercise of the Investor Warrants (the Investor Warrant
Shares), and to the Placement Agent with respect to the shares
of Common Stock issuable upon exercise of the Placement Agent
Warrants (the Placement Agent Warrant Shares, and, together
with the Repayment Shares and Investor Warrant Shares, the
Registrable Shares). Under the terms of the Registration Rights
Agreement, the Company has agreed to use its commercially
reasonable efforts to promptly, but no later than 60 calendar
days from the final closing date of the Offering (the Final
Closing Date), file a registration statement with the SEC (the
Registration Statement) to register the resale of the
Registrable Shares. The Company has agreed to use its
commercially reasonable efforts to ensure that such
Registration Statement is declared effective within 135
calendar days of the Final Closing Date. If the Company is late
in filing the Registration Statement or if the Registration
Statement is not declared effective within 135 days of the
Final Closing Date, or if certain other Registration Events (as
defined in the Registration Rights Agreement) occur, the
Company will be required to pay the holders of Registrable
Shares liquidated damages at a rate of 12% per annum of (i) the
aggregate purchase price paid by such holder for the
Registrable Shares to the Subscription Agreement, or (ii) $0.05
per share of Registrable Shares issued and issuable to such
holder upon exercise of the Placement Agent Warrants, subject
to certain limitations set forth in the Registration Rights
Agreement; provided, however, that in no event shall the
aggregate of any such liquidated damages exceed five percent
(5%) of the applicable foregoing amounts described above with
respect to such holders Registrable Shares that are affected by
all Registration Events in the aggregate. No liquidated damages
will accrue and accumulate with respect to (a) any Registrable
Shares removed from the Registration Statement in response to a
comment from the staff of the SEC limiting the number of shares
of Common Stock which may be included in the Registration
Statement.
The foregoing descriptions of the Subscription Agreement,
Escrow Agreement, Security Agreement, Placement Agency
Agreement, Registration Rights Agreement, Placement Agent
Warrant, Investor Warrant and Note do not purport to be
complete and are subject to, and qualified in their entirety
by, the full text of the documents, copies of which will be
filed as exhibits to the Companys Quarterly Report on Form
10-Q for the quarterly period ending June 30, 2017.
Item 2.03 Creation of Direct Financial Obligation or
an Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The Company sold Units to the Buyers in the Offering in the
aggregate principal amount of $668,000.
Reference is made to the disclosure set forth under Item 1.01
above, which disclosure is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity
Securities.
The Company sold Units to the Buyers in the Offering in the
aggregate principal amount of $668,000. to the terms of the
Notes contained in the Units, shares of Common Stock may be
issuable at maturity to repay the principal and/or interest
on the Notes.
Reference is made to the disclosure set forth under Item 1.01
above, which disclosure is incorporated herein by reference.
The issuances of (a) the Notes, (b) the Repayment Shares, (c)
the Investor Warrants, (d) upon exercise of the Investor
Warrants, the Investor Warrant Shares, (e) the Placement
Agent Warrants, and (f) upon exercise of the Placement Agent
Warrants, the Placement Agent Warrant Shares, in connection
with the Offering are exempt from registration under Section
4(a)(2) and/or Rule 506(b) of Regulation D and/or Regulation
S as promulgated by the U.S. Securities and Exchange
Commission (the SEC) under of the Securities Act as
transactions by an issuer not involving any public offering.
The securities sold in the Offering have not been registered
under the Securities Act and may not be offered or sold in
the United States absent registration or an applicable
exemption from registration requirements. This disclosure
does not constitute an offer to sell or the solicitation of
an offer to buy any of the Companys securities, nor will
there be any sales of these securities by the Company in any
state or jurisdiction in which the offer, solicitation or
sale would be unlawful. The disclosure is being issued to and
in accordance with Rule 135c promulgated under the Securities
Act.
About Enumeral Biomedical Holdings, Inc. (OTCBB:CEUL)
Enumeral Biomedical Holdings, Inc. is a biopharmaceutical company focused on discovering and developing antibody immunotherapies that help the immune system fight cancer and other diseases. The Company utilizes a platform technology that facilitates the resolution measurement of immune cell function within small tissue biopsy samples. Its initial focus is on the development of a pipeline of monoclonal antibody drugs targeting established and immuno-modulatory receptors. Its platform technology is a microwell array technology that detects secreted molecules (such as antibodies and cytokines) and cell surface markers at the level of single, live cells and enables recovery of single, live cells of interest. Its program involves antibodies against the Programmed Cell Death receptor, commonly known as (PD-1). In addition to its PD-1 antibody program, it is developing antibody drug candidates for a number of immunomodulatory protein targets, including TIM-3, LAG-3, OX40, TIGIT and VISTA. Enumeral Biomedical Holdings, Inc. (OTCBB:CEUL) Recent Trading Information
Enumeral Biomedical Holdings, Inc. (OTCBB:CEUL) closed its last trading session at 0.150 with shares trading hands.
