Business Context and Reporting Period
This Form 8-K was filed by EyeGate Pharmaceuticals, Inc. on June 9, 2017. The registrant is an emerging growth company incorporated in Delaware. The filing reports the pricing of a best efforts registered public offering of common stock, Series B Convertible Preferred Stock, and warrants.
Key Financial Metrics and Transaction Details
- Gross Proceeds: Approximately $10.0 million.
- Net Proceeds: Approximately $8.8 million (after deducting placement agent fees, expenses, and estimated offering costs).
- Offering Price: $1.50 per share of common stock (or common stock equivalent) and warrant.
- Securities Issued:
- Up to 5,336,667 shares of common stock.
- 1,995 shares of Series B Convertible Preferred Stock (convertible into 1,330,000 shares of common stock).
- Warrants exercisable for up to 6,666,667 shares of common stock.
- Placement Agent Fees: 7.0% cash placement fee, 0.5% management fee, $25,000 expense allowance, and up to $75,000 legal fee reimbursement.
Material Changes and Transaction Structure
The Company entered into a Securities Purchase Agreement with investors and engaged H.C. Wainwright & Co., LLC as the exclusive placement agent. The Preferred Stock is convertible at $1.50 per share, subject to a 4.99% beneficial ownership limitation (increasable to 9.99%). Warrants are immediately exercisable, expire in five years, and have an exercise price of $1.50, also subject to beneficial ownership limitations. The offering was expected to close on June 14, 2017.
Use of Proceeds and Outlook
The Company intends to use the net proceeds to support operations, including clinical trials, working capital, and general corporate purposes. Funds may also be used for research and development efforts or the potential acquisition or in-licensing of products, though no specific acquisition is currently contemplated. The filing does not provide specific revenue, profit, or cash flow metrics for the reporting period, as this is a transactional filing rather than a periodic financial report.
Investor Verification Checklist
- Verify the actual closing date and final number of shares/warrants sold, as the filing states "up to" specific quantities.
- Confirm the final net proceeds after all actual offering expenses are deducted.
- Review the Certificate of Designation (Exhibit 3.1) for specific terms regarding the Series B Convertible Preferred Stock.
- Monitor the Company's cash burn rate and runway given the stated intent to fund clinical trials and R&D.
- Check for any subsequent filings regarding the exercise of warrants or conversion of preferred stock.