UNITY BIOTECHNOLOGY, INC. : Conclusion of a material definitive agreement (form 8-K)

Item 1.01 Conclusion of a Material Definitive Agreement.

At September 29, 2021, Unity Biotechnology, Inc. (the “Company”), has entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park” or “Investor”) (each, a “Party” and together, the “Parties”), which provides that, under the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to
$ 30,000,000 of shares (the “Purchase Shares”) of its ordinary shares, par value
$ 0.0001 per share (the “ordinary shares”) over the thirty-six (36) month term of the purchase contract. Concurrent with entering into the purchase agreement, the Company also entered into a registration rights agreement with Lincoln Park, under which it agreed to provide Lincoln Park with certain registration rights relating to the shares issued under of the Purchase Agreement (the “Registration Rights Agreement”).

On the start date (as defined below), Lincoln Park will purchase 1,020,408 purchase shares at a purchase price of $ 2.94 per share. From one Business Day following the Start Date (as defined below) and thereafter, the Company has the right, but not the obligation, on any Business Day chosen by the Company (the “Date of Purchase ”), to require Lincoln Park to purchase up to 100,000 common shares (the“ Regular Purchase Amount ”) at the purchase price (as defined below) per purchase notice (each of these purchases, a “Regular Purchase”). The regular purchase amount can be increased as follows: up to 150,000 shares if the closing price is not less than $ 3.50, up to 200,000 shares if the closing price is not lower $ 5.00, and up to 250,000 shares if the closing price is not lower $ 7.00. Lincoln Park’s commitment under each regular purchase shall not exceed $ 2,000,000, provided that the parties can agree at any time to increase the regular purchase amount on any purchase date to the purchase price, beyond the aforementioned amounts that the investor has committed to purchase. The purchase price for regular purchases (the “Purchase Price”) will be equal to the lesser of: (i) the lowest selling price of the Common Shares at the date of purchase, or (ii) the average of the three (3) closing prices of the common shares during the ten (10) business days preceding the date of purchase. The Company will have the right to submit a regular notice of purchase to the investor as often as each business day. A regular purchase notice is given to the investor after the market closes (i.e. after 4:00 p.m. Eastern Time) so that the Purchase Price is always fixed and known when the Company chooses to sell shares to Lincoln Park.

In addition to regular purchases and provided the Company has directed a Regular Purchase in its entirety, the Company may, in its sole discretion, require Lincoln Park on each purchase date to purchase the next Business Day (“Purchase Date accelerated ”) up to the lesser of (i) three (3) times the number of shares purchased as part of such a regular purchase or (ii) 30% of the trading volume on the accelerated purchase date (l ‘”Accelerated Purchase”) at a purchase price equal to the lesser of the following amounts: 97% of (i) the closing sale price on the Accelerated Purchase Date, or (ii) the weighted average price based on the volume of the Accelerated Purchase Date (the “Accelerated Purchase Price”). The parties may mutually agree to increase the number of common shares sold to the investor on any accelerated purchase date to the accelerated purchase price. The Company shall have the right, in its sole discretion, to set a minimum price threshold for each Accelerated Purchase in the notice provided with respect to such Accelerated Purchase and the Company may order multiple Accelerated Purchases in a day provided that the delivery of the shares has been made with respect to the prior regular and expedited purchases that Lincoln Park has purchased.

The Company may also order Lincoln Park, on any Business Day on which an Expedited Purchase has been made and all shares to be purchased hereunder have been properly delivered to Lincoln Park in accordance with the Purchase Agreement, to make Purchases additional on the same terms as a Fast Track Purchase (an “Additional Fast Track Purchase”).

The purchase price of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases and the minimum closing sale price for Regular Purchase will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, stock split or other similar transaction occurring during the working days used to calculate the purchase price. The total number of shares that the Company may sell to Lincoln Park under the Purchase Agreement may in no event exceed 11,065,803 shares (subject to an adjustment as described above) of the common shares ( which is equivalent to approximately 19.99% of the shares of the Shares outstanding immediately prior to the signing of the Purchase Agreement) (the “Exchange Limit”), unless (i) shareholder approval is obtained for issue purchase shares above the exchange limit, to which the exchange limit will no longer apply, or (ii) the average price of all applicable sales of common shares to Lincoln Park under the terms of the purchase agreement is equal or greater
$ 2.94 per share (subject to adjustment as described above) (which represents the minimum price, as defined by Nasdaq Listing Rule 5635 (d), on the Nasdaq Global Market immediately prior to the signing of the purchase agreement , so that the transactions contemplated by the purchase agreement are exempt from the limitation of the trading cap under applicable Nasdaq rules); with the understanding that at no time may Lincoln Park (and its affiliates) beneficially own more than 9.99% of the issued and outstanding common shares of the Company. The Company issued 252,447 common shares to Lincoln Park as a commitment fee in connection with entering into the Purchase Agreement ((the “Commitment Shares”) and together with the Purchase Shares, the “ actions ”).

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The purchase contract contains the usual declarations, guarantees, commitments, closing conditions, indemnification and termination provisions. Sales under the Purchase Agreement can only commence after certain conditions have been met (the date all of the required conditions have been met, the “start date”), which conditions include surrender to Lincoln Park of a prospectus supplement covering the shares of Shares issued or sold by the Company to Lincoln Park under the Purchase Agreement, filing with the
Nasdaq Stock Exchange a notification of registration of additional shares in respect of the shares and the Nasdaq having raised no objection to the completion of the transactions contemplated under the purchase agreement, and the receipt by Lincoln Park of the usual opinion of a lawyer and other certificates and closing documents.

The Purchase Agreement may be terminated by the Company at any time, in its sole discretion, without charge or penalty, by giving Lincoln Park one business day’s notice to terminate the Purchase Agreement. Lincoln Park has undertaken not to provoke or engage in any way whatsoever in a short sale or direct or indirect hedging of the Common Shares. Although the Company has agreed to reimburse Lincoln Park for a limited portion of the costs it incurred under the Purchase Agreement, the Company has not paid any additional amounts to reimburse or indemnify Lincoln Park in connection with the transaction, other than the issue of Commitment Shares.

There are no limitations on the use of the proceeds, financial or commercial commitments, restrictions on future funding (other than restrictions on the Company’s ability to enter into a similar type of agreement or line of credit. on equity during the term, excluding a market transaction with a registered broker), rights of first refusal, participation rights, penalties or damages in the purchase contract. The Company may issue Purchase Notices under the Purchase Agreement, subject to market conditions, and in light of its capital requirements, from time to time and within the limits contained in the Purchase Agreement. Any proceeds that the Company receives under the Purchase Agreement should be used for working capital and general business purposes.

The issue of Purchase Shares and Commitment Shares has been registered in accordance with the Company’s current registration statement on Form S-3 (File No. 333-231893) (the “Registration Statement ”), And the related base prospectus included in the registration form. Declaration, supplemented by a prospectus supplement which will be filed on or about the start date (the “prospectus supplement”). A copy or legal opinion as to the legality of the actions is filed as Exhibit 5.1 attached.

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 the Registration Rights Agreement are filed as Exhibits 10.1 and 10.2 attached. The foregoing descriptions of the Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to those exhibits. The purchase contract and the recording rights contract contain customary representations and warranties, undertakings and indemnification provisions that the parties have to each other and only for the benefit of the other in the context of all terms. and conditions of such agreements and in the context of the particular relationship between the parties. The provisions of the Purchase Agreement and the Registration Rights Agreement, including the representations and warranties contained therein, are not for the benefit of any party other than the parties hereto and are not intended as documents allowing investors and the public to obtain factual information on the current state of affairs of the parties. Investors and the public should instead consult other information contained in the Company’s annual, quarterly and current reports which it may file with the Security and Trade Commission (the second”).

The information in this current report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy the common shares of the Company referred to herein, nor will there be any no more offering, soliciting or selling shares. in any jurisdiction in which such offering, solicitation or sale would be illegal prior to registration or qualification under the securities laws of that jurisdiction.

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