Item 1.01 Entry into a Material Definitive Agreement.
On January 5, 2021 (the "Effective Date"), Hoth Therapeutics, Inc. (the
"Company") entered into a Securities Purchase Agreement (the "Purchase
Agreement") with certain accredited investors identified on the signature pages
thereto (the "Purchasers") pursuant to which the Company offered and sold to the
Purchasers an aggregate of 2,475,248 shares (the "Shares") of its common stock,
par value $0.0001 per share (the "Common Stock"), and warrants (the "Warrants")
to purchase up to 1,237,624 shares (the "Warrant Shares" and together with the
Shares and the Warrants, the "Securities") of Common Stock in a private
placement for aggregate gross proceeds to the Company of $5 million, before
deducting estimated offering expenses payable by the Company (the "Offering").
The combined purchase price for each Share and accompanying Warrant to purchase
0.5 of a share of Common Stock was $2.02. The closing of the Offering occurred
on January 7, 2021.
Each Warrant shall be immediately exercisable for a period of five years at an
exercise price of $2.25 per Warrant Share, subject to adjustment. If a
registration statement covering the resale of the Warrant Shares is not
effective, the holders may exercise the Warrants by means of a cashless
exercise. The Company is prohibited from effecting an exercise of the Warrants
to the extent that, as a result of such exercise, the holder of the Warrant
together with the holder's affiliates, would beneficially own more than 4.99% of
the number of shares of Common Stock outstanding immediately after giving effect
to the issuance of the Warrant Shares, which beneficial ownership limitation may
be increased by the holder up to, but not exceeding, 9.99%.
Pursuant to the Purchase Agreement, subject to certain exceptions, the Company
is prohibited from issuing or entering into any agreement to issue or otherwise
announcing the issuance or proposed issuance of any shares of Common Stock or
Common Stock equivalents or filing any registration statement other than the
registration statement to be filed pursuant to the Registration Rights Agreement
(as defined below) for a period of 90 days from the Effectiveness Date (as
defined below). In addition, until the one year anniversary of the Effectiveness
Date, the Company is prohibited from effecting or entering into an agreement to
effect any issuance of Common Stock or Common Stock equivalents involving a
Variable Rate Transaction (as defined in the Purchase Agreement).
In connection with the Offering, the Company also entered into a registration
rights agreement (the "Registration Rights Agreement") with the Purchasers
pursuant to which the Company shall prepare and file with the U.S. Securities
and Exchange Commission (the "SEC") a registration statement covering the
Shares, the Warrant Shares and any additional shares of Common Stock issued and
issuable in connection with any anti-dilution provisions in the Warrants and any
securities issued or then issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing
(collectively, the "Registrable Securities") on or prior to the 10th calendar
day following the Effective Date (the "Filing Date"). The Company shall use its
best efforts to cause the registration statement covering the Registrable
Securities to be declared effective no later than the 30th calendar day
following the Effective Date, or in the event of a full review by the SEC, the
90thcalendar day following the Effective Date (the "Effectiveness Date"). If,
among other things, the Company fails to file the registration statement by the
Filing Date or fails to have such registration statement declared effective by
the Effectiveness Date (the date on which such failure occurs, the "Event
Date"), then on each such Event Date and on each monthly anniversary of each
such Event Date until the applicable failure is cured, the Company shall pay to
each Purchaser, in cash, a fee (the "Fee") equal to 1% of the aggregate purchase
price paid by such Purchaser; provided, however, the maximum aggregate Fees
payable to any Purchaser shall not exceed 6% of the aggregate amount invested by
such Purchaser.
In addition, pursuant to the terms of the Offering, the Company issued The
Benchmark Company, LLC warrants (the "Placement Agent Warrants") to purchase up
to 185,644 shares (the "Placement Agent Warrant Shares") of Common Stock, or 5%
of the Securities sold in the Offering. The Placement Agent Warrants are
exercisable for a period of five years from the closing date of the Offering
(the "Initial Exercise Date") at an exercise price of $2.25 per share, subject
to adjustment. The Placement Agent Warrants may be exercised on a cashless basis
if a registration statement covering the resale of the Placement Agent Warrant
Shares is not effective at the time of exercise. In addition, the Placement
Agent Warrants contain piggy-back registration rights. The Company is prohibited
from effecting an exercise of the Placement Agent Warrants to the extent that,
as a result of such exercise, the holder of the Placement Agent Warrants
together with the holder's affiliates, would beneficially own more than 9.99% of
the number of shares of Common Stock outstanding immediately after giving effect
to the issuance of the Placement Agent Warrant Shares.
The Securities, the Placement Agent Warrants and the Placement Agent Warrant
Shares have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), and are instead being offered pursuant to the exemption
provided in Section 4(a)(2) under the Securities Act and/or Rule 506(b) of
Regulation D promulgated thereunder.
The foregoing description of the Purchase Agreement, the Warrant, the
. . .
Item 3.02 Unregistered Sales of Equity Securities.
References to the Offering of the Securities and the issuance of the Placement
Agent Warrants (including the Placement Agent Warrant Shares issuable upon
exercise of the Placement Agent Warrants) set forth under Item 1.01, are
incorporated by reference into this Item 3.02.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 4, 2021, the Compensation Committee of the Board of Directors of the
Company approved the payment of a bonus in the amount of $200,000 to Robb Knie,
the Chief Executive Officer of the Company, and $50,000 to Jane H. Springer, the
Vice President of Operations of the Company, in consideration for their efforts
in connection with advancing the business of the Company and its financial
position.
Item 8.01 Other Events.
On December 22, 2020 (the "License Effective Date"), the Company entered into a
Non-Exclusive Commercial Evaluation License Agreement (the "License Agreement")
with the U.S. Army Medical Research and Development Command ("USAMRDC") pursuant
to which USAMRDC granted to the Company a non-exclusive license to use certain
licensed patents for the treatment of lung diseases resulting from bacterial
infections. The licensed intellectual property relates to a new molecular entity
developed by the Walter Reed Army Institute of Research with a novel
antibacterial mechanism of action that targets multiple bacterial pathogens. The
License Agreement shall terminate six months from the License Effective Date,
unless earlier terminated pursuant to its terms.
On January 4, 2021, the Company issued a press release announcing the execution
of the License Agreement with USAMRDC. A copy of the press release is furnished
as Exhibit 99.1 to this Current Report on Form 8-K.
On January 5, 2021, the Company issued a press release announcing the Offering.
A copy of the press release is furnished as Exhibit 99.2 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Form of Securities Purchase Agreement
10.2 Form of Warrant
10.3 Form of Registration Rights Agreement
10.4 Form of Placement Agent Warrant
99.1 Press Release dated January 4, 2021
99.2 Press Release dated January 5, 2021
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