Business Context and Reporting Period
Relmada Therapeutics, Inc. filed this Form 8-K on October 12, 2018, reporting a private placement of securities (the "Offering") closed on October 12 and 18, 2018. The company is incorporated in Nevada and operates from New York, NY.
Key Financial Metrics and Transaction Details
- Gross Proceeds: The Company received $3,279,998 from the sale of securities.
- Securities Issued:
- 3,644,440 shares of common stock sold at $0.90 per share.
- Five-year warrants to purchase 2,368,887 shares of common stock at an exercise price of $1.50 per share.
- Debt Conversion: $7,726,832 (principal and interest) of outstanding 7% Convertible Promissory Notes automatically converted into 10,731,676 shares of common stock at a conversion price of $0.72 per share.
- Transaction Costs:
- Placement agent cash fee: $280,000.
- Placement agent warrants: 303,333 shares at $1.50 exercise price.
- Expense allowance: $28,000.
- Upfront due diligence fee: $20,000.
The filing text does not provide specific values for revenue, operating profit, cash flow, or margins as this is a current report regarding a specific financing event rather than a periodic financial statement.
Material Changes and Obligations
The primary material change is the significant increase in outstanding common stock due to the new issuance and the automatic conversion of convertible notes. Additionally, the Company entered into Registration Rights Agreements requiring the registration of the new shares and warrant shares. Failure to file or declare the registration statement effective within the agreed timeframe obligates the Company to pay investors 1% of the total purchase price per month, up to a maximum of 6% in the aggregate.
Outlook, Risks, and Unusual Items
The securities were sold to accredited investors under Rule 506 of Regulation D and have not been registered for primary sale under the Securities Act of 1933. The filing notes that the report does not constitute an offer to sell securities in states where such an offer would be unlawful prior to registration. No specific forward-looking guidance or management commentary regarding future operational performance is included in this document.
Investor Verification Checklist
- Verify the total number of shares outstanding post-conversion and issuance to assess dilution impact.
- Confirm the status of the Registration Rights Agreement filing and the timeline for effectiveness to evaluate potential penalty payments.
- Review the full text of the Purchase Agreements and Warrants filed as exhibits to the Form 10-Q for the period ended September 30, 2018.
- Assess the remaining balance of the 7% Convertible Promissory Notes, if any, following the automatic conversion of $7.7 million.