REXAHN PHARMACEUTICALS, INC. Item 1.01 Entry into Material Definitive Agreement.
As previously disclosed in a Form 8-K filed on
On
In connection with the A&R Securities Purchase Agreement, Rexahn, Ocuphire, and the Investors also revised the exhibits to the A&R Securities Purchase Agreement, including the form of Series A Warrant (as defined below), the form of Series B Warrant (as defined below), the form of Financing Lock-Up Agreement (as defined below) and the form of Leak-Out Agreement (as defined below) (collectively, the "Pre-Merger Financing Ancillary Agreements"), to, among other things, revise Rexahn's obligations in connection with termination of the Registration Rights Agreement.
The following is a summary of the material terms of the A&R Securities Purchase Agreement and the Pre-Merger Financing Ancillary Agreements, as amended and restated.
A&R Securities Purchase Agreement
Pursuant to the A&R Securities Purchase Agreement, the Investors agreed to
invest a total of
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"Pre-Merger Financing Fully Diluted Shares" means the "fully-diluted" post-Merger outstanding shares of Rexahn Common Stock, which amount (i) includes all shares of Rexahn Common Stock that may be issued pursuant to in-the-money options, warrants or convertible securities, and (ii) with respect to new Rexahn warrants issued after the date of the Initial Securities Purchase Agreement in exchange for existing Rexahn warrants shall include (A) all shares of Rexahn Common Stock that are subject to each new Rexahn warrant that is in-the-money as of the date of issuance of such new Rexahn warrant and (B) 0.5 times the number of shares of Rexahn Common Stock that may be issued pursuant to such out-of-the-money new Rexahn warrant that is out-of-the-money as determined based on the closing sale price of Rexahn Common Stock immediately following the issuance of such Rexahn warrant, and (iii) excludes all other out-of-the-money options, warrants or convertible securities of Rexahn.
As a result of the Merger, at the effective time of the Merger (the "Effective Time"), the Initial Shares will automatically be converted into the right to receive a number of shares (the "Converted Initial Shares") of Rexahn Common Stock equal to the number of Initial Shares multiplied by the exchange ratio calculated in accordance with the calculation set forth in the Merger Agreement (the "Exchange Ratio"). Further, at the Effective Time, the Additional Shares placed into escrow with the escrow agent will automatically be converted into the right to receive a number of shares (the "Converted Additional Shares") of Rexahn Common Stock equal to the number of Additional Shares multiplied by the Exchange Ratio. The number of Converted Additional Shares deliverable out of escrow to each Investor will be equal to the lesser of (I) the number of Converted Additional Shares issued in exchange for the Additional Shares deposited in the Investor's escrow account and (II) the number determined on or prior to the warrant closing date by subtracting (i) the number of Converted Initial Shares issued to the Investor from (ii) the quotient determined by dividing (a) the pro rata portion of the Purchase Price paid by the Investor by (b) 85% of the average of the five lowest volume-weighted average trading prices of a share of Rexahn Common Stock on Nasdaq during the first ten trading days (or earlier at the election of any Investor) immediately following the Closing of the Merger, subject to the Floor Price (as defined below). Any Converted Additional Shares not deliverable to the Investors as of the warrant closing date based on the foregoing formula will be returned to Rexahn as treasury shares and cancelled. No Converted Additional Shares will be deliverable out of escrow if the foregoing formula results in a negative number. The lower of (x) the effective initial purchase price per Converted Initial Share and (y) the number obtained by the formula in clause (b) above, subject to the Floor Price, is called the "Final Purchase Price." Notwithstanding the foregoing, no Converted Additional Shares will be delivered to Investors from escrow to the extent such delivery would result in such Investor, together with its affiliates and any other person whose beneficial ownership of Rexahn Common Stock would be aggregated with such Investor for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), beneficially owning in excess of 4.99% or 9.99% of the outstanding Rexahn Common Stock (including the Converted Additional Shares so delivered). In the event that Rexahn fails to timely deliver any of the Converted Initial Shares or Converted Additional Shares then Rexahn shall be obligated to pay the affected Investor on each day while such failure is continuing an amount equal to 1.5% of the market value of the undelivered shares determined using any trading price of Rexahn Common Stock selected by the holder while the failure is continuing and if an affected Investor purchases shares of Rexahn Common Stock in connection with such failure ("Buy-In Shares"), then Rexahn must, at such Investor's discretion, reimburse such Investor for the cost of such Buy-In Shares or deliver the owed shares and reimburse the Investor for the difference between the price such Investor paid for the Buy-In Shares and the market price of such shares, measured at any time of such Investor's choosing while the delivery failure was continuing.
Pursuant to the A&R Securities Purchase Agreement, at any time during the period commencing from the six month anniversary of the closing date of the Pre-Merger Financing and ending at such time that all of the shares of Rexahn Common Stock issued or issuable in the Pre-Merger Financing, if a registration statement is . . .
Item 1.02 Termination of a Material Definitive Agreement
Also on
Forward-Looking Statements
This communication contains forward-looking statements (including within the
meaning of Section 21E of the Exchange Act and Section 27A of the Securities
Act) concerning Rexahn, Ocuphire, the proposed Merger, the Pre-Merger Financing
and other matters. These statements may discuss goals, intentions and
expectations as to future plans, trends, events, results of operations or
financial condition, or otherwise, based on current beliefs of the management of
Rexahn, as well as assumptions made by, and information currently available to,
management. Forward-looking statements generally include statements that are
predictive in nature and depend upon or refer to future events or conditions,
and include words such as "may," "will," "should," "would," "expect,"
"anticipate," "plan," "likely," "believe," "estimate," "project," "intend," and
other similar expressions. Statements that are not historical facts are
forward-looking statements. Forward-looking statements are based on current
beliefs and assumptions that are subject to risks and uncertainties and are not
guarantees of future performance. Actual results could differ materially from
those contained in any forward-looking statement as a result of various factors,
including, without limitation: the risk that the conditions to the Closing are
not satisfied, including the failure to obtain stockholder approval for the
proposed Merger in a timely manner or at all; uncertainties as to the timing of
the consummation of the proposed Merger and the ability of each of Rexahn and
Ocuphire to consummate the Merger; risks related to Rexahn's ability to
correctly estimate its expected net cash at Closing and estimate and manage its
operating expenses and its expenses associated with the proposed Merger pending
Closing; risks related to the calculation of the estimated warrant liability of
Rexahn's net cash amount being impacted by the trading price of a share of
Rexahn Common Stock on Nasdaq on the calculation date and its impact on Rexahn's
expected net cash at Closing; Rexahn's ability to meet the minimum net cash
requirement; risks related to Rexahn's continued listing on the Nasdaq Capital
Market until Closing of the proposed Merger; risks related to the failure or
delay in obtaining required approvals from any governmental or
quasi-governmental entity necessary to consummate the proposed Merger; the risk
that as a result of adjustments to the Exchange Ratio, Rexahn stockholders or
Ocuphire stockholders could own more or less of the combined company than is
currently anticipated; risks related to the market price of Rexahn Common Stock
relative to the Exchange Ratio; the risk that the conditions to payment under
the contingent value rights will be not be met and that the contingent value
rights may otherwise never deliver any value to Rexahn stockholders; risks
associated with the possible failure to realize certain anticipated benefits of
the proposed Merger, including with respect to future financial and operating
results; the ability of Rexahn or Ocuphire to protect their respective
intellectual property rights; competitive responses to the Merger and changes in
expected or existing competition; unexpected costs, charges or expenses
resulting from the proposed Merger; potential adverse reactions or changes to
business relationships resulting from the announcement or completion of the
proposed Merger; the success and timing of regulatory submissions and
pre-clinical and clinical trials; regulatory requirements or developments;
changes to clinical trial designs and regulatory pathways; changes in capital
resource requirements; risks related to the inability of the combined company to
obtain sufficient additional capital to continue to advance its product
candidates and its preclinical programs; legislative, regulatory, political and
economic developments; and the effects of COVID-19 on clinical programs and
business operations. The foregoing review of important factors that could cause
actual events to differ from expectations should not be construed as exhaustive
and should be read in conjunction with statements that are included herein and
elsewhere, including the risk factors included in Rexahn's most recent Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K filed with the
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Important Additional Information Will be Filed with the
In connection with the proposed Merger, Rexahn intends to file relevant
materials with the
No Offer or Solicitation
This communication shall not constitute an offer to sell, the solicitation of an offer to sell or any offer to buy or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Participants in the Solicitation
Rexahn and its directors and executive officers and Ocuphire and its directors
and executive officers may be deemed to be participants in the solicitation of
proxies from the stockholders of Rexahn in connection with the Merger.
Information regarding the special interests of these directors and executive
officers in the Merger will be included in the proxy
statement/prospectus/information statement referred to above. Additional
information about Rexahn's directors and executive officers is included in
Rexahn's Annual Report on Form 10-K for the fiscal year ended
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Item 9.01 Financing Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1 First Amendment to Agreement and Plan of Merger and Reorganization,
dated as of June 29, 2020 , by and among Rexahn, Merger Sub and
Ocuphire.
4.1 Form of Series A/B Warrants.
10.1* Amended and Restated Securities Purchase Agreement, dated as of June
29, 2020 , by and among Rexahn, Ocuphire and the investors party
thereto.
10.2 Form of Financing Lock-Up Agreement, by and among Rexahn, Ocuphire,
and the investors party thereto.
10.3 Form of Leak-Out Agreement, by and between Rexahn and the investors
party thereto.
* Certain schedules and exhibits have been omitted pursuant to Item
601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will
be furnished to the
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