Nemus Bioscience, Inc. (OTCMKTS:NMUS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

Securities Purchase Agreement, Registration Rights Agreement and Warrant Agreement with Emerald

On January 19, 2018, Nemus Bioscience, Inc. (“Nemus”) announced that it has received the remaining $400,000 in funding under the previously announced Secured Promissory Note for a convertible loan (the “Bridge Loan”) with Emerald Health Sciences Inc. (“Emerald”), has entered into a Securities Purchase Agreement (the “Agreement”) with Emerald to which Nemus issued and sold to Emerald 15,000,000 shares (the “Shares”) of Nemus’ common stock, par value $0.001 per share (the “Common Stock”), and a warrant to purchase 20,400,000 shares of Common Stock at an exercise price of $0.10 per share for a term of five years (the “Warrant” and, together with the Shares, the “Securities”) for aggregate gross proceeds of $1,500,000 (the “Initial Closing”). to the Agreement, Emerald has committed to purchase a minimum of at least 10,000,000 shares of Common Stock and a warrant for at least 13,600,000 shares of Common Stock at the same price for the Securities on or before February 28, 2018 (the “Second Closing”). Concurrently with the Initial Closing, the outstanding balance of the Bridge Loan automatically converted into 9,000,000 shares of Common Stock.

The Securities were sold in a transaction exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506(b) of Regulation D. Nemus intends to use the proceeds of the Initial Closing for general corporate purposes, including, without limitation, to pay down obligations and other working capital items.

As part of the terms of the Agreement, Nemus entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Emerald to which Nemus has agreed to file a registration statement to register for resale the Shares and the shares of Common Stock underlying the Warrant within 30 calendar days following the Initial Closing. Subject to certain exceptions, in the event the registration statement does not become effective within certain time periods set forth in the Registration Rights Agreement, Nemus would be required to pay Emerald an amount in cash equal to 1.5% of the aggregate purchase price of the Preferred Shares for each 30-day period or pro rata for any portion thereof until such time as the registration statement becomes effective or the Shares and the shares of Common Stock underlying the Warrant sold in the Initial Closing may be sold by Emerald to Rule 144 without any restrictions or limitations.

The foregoing description of the Agreement, the Registration Rights Agreement and the Warrant does not purport to be complete and is qualified in its entirety by the Agreement, the Registration Rights Agreement and the Warrant attached hereto as Exhibits 4.1, 10.1, 10.2, each of which is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 above is incorporated herein by reference.

On January 18, 2018, Nemus entered into a Restricted Stock Agreement with each of Dr. Murphy, Elizabeth Berecz and Cosmas N. Lykos granting 900,000, 700,000 and 900,000 shares of restricted Common Stock (the “Restricted Stock”), respectively. to the terms of the Restricted Stock Agreements, the Restricted Stock vests in equal 50% installments on the first and second anniversaries of the grant date, subject to continued employment with Nemus through the applicable vesting date. The Restricted Stock were issued in transactions exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D.

The foregoing description of the Restricted Stock Agreements does not purport to be complete and is qualified in its entirety by the form of Restricted Stock Agreement attached hereto as Exhibit 4.1, which is incorporated herein by reference.

Item 5.01 Changes in Control of Registrant.

As a result of the Initial Closing, a change of control has occurred and Emerald beneficially owns approximately 50.5% of the Common Stock of the Company on an as-converted basis. The source of funds for the Agreement and the Bridge Loan was working capital of Emerald. The information set forth under Item 1.01 and 5.02 is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

to the terms of the Agreement and effective as of the Initial Closing, each of Cosmas N. Lykos, Douglas S. Ingram, Thomas A. George and Gerald W. McLaughlin resigned from the board of directors of Nemus (the “Board”). Effective as of the Initial Closing, the size of the Board was reduced to three directors and Punit Dhillon and Jim Heppell were appointed as members of the Board. Dr. Brian S. Murphy continues as a director of Nemus.

Messrs. Dhillon and Heppell will be compensated for their service on the Board in accordance with the Company’s director compensation program as outlined in the Company’s last proxy statement. The Company entered into indemnification agreements with Messrs. Dhillon and Heppell in the form of the Company’s standard form of indemnification agreement. Messrs. Dhillon and Heppell are not a party to any transaction required to be disclosed to Item 404(a) of Regulation S-K. Other than the Agreement, there were no arrangements or understandings to which Messrs. Dhillon and Heppell were selected as directors.

Item 7.01 Regulation FD Disclosure.

On January 19, 2019, Nemus issued a press release announcing the remaining financing under the Bridge, the entering into the Agreement and the Initial Closing. A copy of the press release is attached hereto as Exhibit 99.1. The information in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of Nemus’ filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statement and Exhibits.

(d) Exhibits

Nemus Bioscience, Inc. Exhibit
EX-4.2 2 nemus_ex42.htm FORM OF RESTRICTED STOCK AGREEMENT nemus_ex42.htmEXHIBIT 4.2   [FORM OF RESTRICTED STOCK AGREEMENT]   THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made effective as of January ___,…
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About Nemus Bioscience, Inc. (OTCMKTS:NMUS)

Nemus Bioscience, Inc. is a biopharmaceutical company. The Company is focused on the discovery, development and the commercialization of cannabinoid-based therapeutics through its partnership with the University of Mississippi (UM). It is UM’s partner for the development and commercialization of drugs derived from cannabis extracts, or cannabinoids. It is focused primarily on the development of early-stage cannabinoid product candidates, including NB1111, NB1222, NB3111 and NB2111. NB1111, a prodrug of Tetrahydrocannabinol (THC), is in the preclinical stage for the indication of glaucoma. NB1222 is a prodrug formulation of THC and is intended for systemic administration in the management of chemotherapy-induced nausea and vomiting (CINV). The NB2111 formulation technology is designed to permit better transmembrane translocation of cannabinoids. The NB3111 product candidate is in research stage for the indication of Methicillin-resistant Staphylococcus aureus (MRSA).