Item 1.01 Entry into a Material Definitive Agreement.
On February 10, 2017, XOMA Corporation (“XOMA” or the “Company”) entered into a Subscription Agreement with
Biotechnology Value Fund, L.P. (“BVF”), an existing stockholder of the Company, and certain entities affiliated with BVF (the “Subscription Agreement”). Pursuant to the Subscription Agreement, the Company agreed to issue directly
to BVF in a registered direct offering (the “Offering”) 1,200,000 shares of the Company’s common stock, $0.0075 par value per share, and 5,003 shares of the Company’s Series X Preferred Stock, $0.05 par value per share.
The offering price of the shares of common stock is $4.03 per share (the closing price of XOMA common stock on February 10, 2017, as
reported on the NASDAQ Global Market).
Each share of Series X Preferred Stock will have a stated value of $4,030 per share and will be
convertible into 1,000 shares of registered common stock based on a conversion price of $4.03 per share of common stock. The total number of shares of common stock issued upon conversion of all issued Series X Preferred Stock will be 5,003,000
shares. Each share will be convertible at the option of the holder at any time, provided that the holder will be prohibited from converting into common stock if, as a result of such conversion, the holder, together with its affiliates, would
beneficially own a number of shares above a conversion blocker, which is initially set at 19.99% of the total common stock then issued and outstanding immediately following the conversion of such shares. In the event of the Company’s
liquidation, dissolution or winding up, holders of Series X Preferred Stock will participate pari passu with any distribution of proceeds to holders of common stock. Holders of Series X Preferred Stock are entitled to receive dividends on
shares of Series X Preferred Stock equal (on an as if converted to common stock basis) to and in the same form as dividends actually paid on the Company’s common stock or other junior securities. Shares of Series X Preferred Stock will
generally have no voting rights, except as required by law and except that the consent of the holders of the outstanding Series X Preferred Stock will be required to amend the terms of the Series X Preferred Stock and to approve certain corporate
actions.
The net proceeds from the Offering, after deducting estimated offering expenses, are expected to be approximately
$24.9 million. No underwriter or placement agent participated in the Offering. The above description of the Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the Subscription Agreement filed
as Exhibit 10.1 to this Current Report on Form
8-K
which is incorporated herein by reference.
The
Offering was made pursuant to the Company’s shelf registration statement previously filed with the Securities and Exchange Commission (the “SEC”), which the SEC declared effective on February 13, 2015 (File
No. 333-201882),
as supplemented by the prospectus supplement filed with the SEC on February 13, 2017.
The Company closed the Offering on February 16, 2017. Immediately following the closing of the Offering, the Company had a total of
7,520,822 shares of common stock issued and outstanding, excluding shares of common stock underlying the Series X Preferred Stock.
The
Company plans to use the net proceeds from the Offering to prepay certain outstanding indebtedness, fund the clinical development of XOMA 358, fund additional preclinical and regulatory activities for other product candidates, and for other general
corporate purposes.
A copy of the opinion of Cooley LLP relating to the legality of the issuance and sale of the common stock and Series
X Preferred Stock in the Offering is filed herewith as Exhibit 5.1.