Item 1.01 Entry into a Material Definitive Agreement.
On January 28, 2021, Cancer Genetics, Inc. a Delaware corporation (the
"Company"), entered into a Securities Purchase Agreement (the "Securities
Purchase Agreement") with certain institutional and accredited investors (the
"Purchasers"), pursuant to which the Company issued and sold to the Purchasers
in a private placement (the "Private Placement") an aggregate of (i) 2,758,624
shares (the "Shares") of the Company's common stock, $0.0001 par value per share
("Common Stock"), and (ii) common warrants (the "Common Warrants") to purchase
up to an aggregate of 2,758,624 shares of Common Stock, at a combined offering
price of $3.625 per Share and accompanying Common Warrant to purchase one share
of Common Stock, for gross proceeds of approximately $10 million.
The Common Warrants have an exercise price of $3.50 per share. The Common
Warrants are immediately exercisable and may be exercised at any time after
their original issuance until August 3, 2026. A holder of a Common Warrant may
not exercise any portion of such holder's Common Warrants to the extent that the
holder, together with its affiliates, would beneficially own more than 4.99%
(or, at the election of the holder, 9.99%) of the Company's outstanding shares
of Common Stock immediately after exercise, except that upon at least 61 days'
prior notice from the holder to the Company, the holder may increase the
beneficial ownership limitation to up to 9.99% of the number of shares of Common
Stock outstanding immediately after giving effect to the exercise.
The net proceeds to the Company from the Private Placement are expected to be
approximately $8.9 million, after deducting placement agent fees and expenses
and estimated offering expenses payable by the Company. The Company intends to
use the net proceeds from the Private Placement for general corporate purposes.
The net proceeds are also expected to be available to the combined company once
the previously announced merger with StemoniX closes, which is subject to
stockholder approval. The Private Placement closed on February 1, 2021.
In connection with the Private Placement, the Company entered into a
registration rights agreement, dated January 28, 2021 (the "Registration Rights
Agreement"), with the Purchasers, pursuant to which, among other things, the
Company will prepare and file with the Securities and Exchange Commission a
registration statement on Form S-3 (the "Registration Statement") to register
for resale the Shares and the shares of Common Stock issuable upon the exercise
of the Common Warrants by 9:30 a.m., New York Time, on February 2, 2021.
Pursuant to the Purchase Agreement, the Company agreed for a period of 45 days
following the date that the Registration Statement is declared effective (the
"Effective Date") not to issue, enter into an agreement to issue or announce the
issuance or proposed issuance of Common Stock or any other securities
convertible into, or exercisable or exchangeable for, Common Stock or file any
registration statement or any amendment or supplement thereto, in each case
other than as contemplated pursuant to the Registration Rights Agreement. The
Purchase Agreement does not apply to, in addition to certain customary
exceptions, the issuance by the Company of equity or debt securities to the
security holders of StemoniX, Inc. ("StemoniX") pursuant to the Agreement and
Plan of Merger and Reorganization, dated August 21, 2020, as it may be amended
from time to time (the "Merger Agreement") between the Company, StemoniX and CGI
Acquisition, Inc. ("Merger Sub"), pursuant to which Merger Sub will merge with
and into StemoniX, with StemoniX surviving the merger and becoming a direct,
wholly-owned subsidiary of the Company (the "Merger"), and securities issued
primarily in order to satisfy (A) the condition in the Merger Agreement that the
Company and/or StemoniX shall have consummated a financing transaction no later
than the closing of the Merger resulting in aggregate gross proceeds of at least
$10 million (or such greater amount as the Company and StemoniX agree) and/or
(B) the condition in the Merger Agreement that the shares of Common Stock being
issued in the Merger shall have been approved for listing on the Nasdaq Capital
Market.
H.C. Wainwright & Co., LLC ("Wainwright") acted as the exclusive placement agent
for the Private Placement. The Company paid Wainwright a cash fee equal to 7.0%
of the gross proceeds of the Private Placement and a management fee equal to
1.0% of the gross proceeds of the Private Placement, and paid Wainwright a
non-accountable expense allowance of $75,000. Additionally, the Company issued
to Wainwright, or its designees, warrants to purchase up to an aggregate of
165,517 shares of Common Stock, equal to 6.0% of the aggregate number of Shares
placed in the Private Placement (the "Wainwright Warrants"). The Wainwright
Warrants are exercisable immediately, expire on August 3, 2026 and have an
exercise price of $4.5313 per share (equal to 125% of the combined offering
price per Share and accompanying Common Warrant).
The Securities Purchase Agreement and the Registration Rights Agreement contain
customary representations, warranties and covenants by the Company, customary
conditions to closing, indemnification obligations of the Company and the
Purchasers, other obligations of the parties and termination provisions. The
representations, warranties and covenants contained in the Securities Purchase
Agreement and the Registration Rights Agreement were made only for purposes of
such agreements and as of specific dates, were solely for the benefit of the
parties to such agreements, and may be subject to limitations agreed upon by the
contracting parties.
The Shares, the Common Warrants, the Wainwright Warrants, and the shares of
Common Stock issuable upon the exercise of the Common Warrants and the
Wainwright Warrants have not been registered under the Securities Act of 1933,
as amended, and were offered pursuant to the exemption from registration
provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and
Rule 506(b) promulgated thereunder.
The foregoing description of the material terms of the Securities Purchase
Agreement, the Common Warrants, the Registration Rights Agreement and the
Wainwright Warrants is not complete and is qualified in its entirety by
reference to the full text of the Securities Purchase Agreement, the Common
Warrants, the Registration Rights Agreement and the Wainwright Warrants, copies
of which are filed as Exhibits 10.1, 4.1, 10.2, and 4.2, respectively, to this
Current Report on Form 8-K and are incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K
related to the Shares, the Common Warrants, the Wainwright Warrants and the
shares of Common Stock issuable upon the exercise of the Common Warrants and the
Wainwright Warrants is incorporated herein by reference.
Item 8.01 Other Events.
On January 28, 2021, the Company issued a press release announcing the Private
Placement. A copy of the press release is attached as Exhibit 99.1 to this
Current Report on Form 8-K and is hereby incorporated by reference herein.
On February 1, 2021, the Company issued press release announcing the closing of
the Private Placement. A copy of the press release is attached as Exhibit 99.2
to this Current Report on Form 8-K and is hereby incorporated by reference
herein.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
4.1 Form of Common Warrant.
4.3 Form of Placement Agent Warrants.
10.1 Form of Securities Purchase Agreement, dated January 28, 2021.
10.2 Form of Registration Rights Agreement, dated January 28, 2021.
99.1 Press Release dated January 28, 2021.
99.2 Press Release dated February 1, 2021.
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