| Item 1.01 |
Entry into a Material Definitive Agreement |
On November 4, 2022, NeuroBo Pharmaceuticals,
Inc. (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”)
with Ladenburg Thalmann & Co. Inc. (the “Underwriter”), pursuant to which the Company issued and sold,
in an underwritten public offering by the Company (the “Public Offering”), (a) 2,397,003 Class A Units (the
“Class A Units”), with each Class A Unit consisting of (i) one share of the Company’s common stock, par
value $0.001 per share (the “Common Stock”), (ii) one warrant to purchase one share of Common Stock exercisable
following approval of the Company’s stockholders (each, a “Series A Warrant”) and (iii) one warrant to
purchase one share of Common Stock exercisable following approval of the Company’s stockholders (each, a “Series B
Warrant,” and together with the Class A Series A Warrants, the “Warrants”), with each Class A
Unit offered to the public at an offering price of $3.00 per Class A Unit and (b) 2,602,997 Class B Units (the “Class B Units”,
and collectively with the Class A Units, the “Units”), with each Class B Unit consisting of (i) one share of
the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”),
convertible into one share of Common Stock, (ii) one Series A Warrant and (iii) one Series B Warrant, with each Class B Unit offered
to the public at an offering price of $3.00 per Class B Unit.
In addition, pursuant to the Underwriting Agreement, the Company granted
the Underwriter a 45 day option (the “Overallotment Option”) to purchase up to (i) 750,000 additional shares
of Common Stock and (ii) additional Warrants to purchase up to 1,500,000 additional shares of Common Stock, solely to cover over-allotments.
The Overallotment Option was exercised in full on November 7, 2022.
The Units were not certificated and the shares of Common Stock, shares
of Series B Preferred Stock and Warrants comprising such Units were immediately separable and were issued separately in the Public Offering.
The securities were offered by the Company pursuant to the registration statement on Form S-1 (File No. 333-267482) as amended, which
was initially filed with the Securities and Exchange Commission (the “Commission”) on September 16, 2022 and
declared effective by the Commission on November 4, 2022 (the “Registration Statement”).
On November 8, 2022, the Public Offering
closed, and the Company issued and sold (i) 3,147,003 shares of Common Stock (which includes 750,000 shares of Common Stock sold
pursuant to the exercise of the Overallotment Option), (ii) 2,602,997 shares of Series B Preferred Stock, and (iii) Warrants to
purchase 11,500,000 shares of Common Stock (which includes Warrants to purchase 1,500,000
shares of Common Stock sold pursuant to the exercise of the Overallotment Option), pursuant to the Registration Statement
and the Underwriting Agreement. The net proceeds to the Company, after deducting the underwriting discounts and commissions and
estimated offering expenses payable by the Company, are expected to be approximately $15.1 million.
The
Warrants will be exercisable upon stockholder approval of the exercisability of the Warrants under Nasdaq rules, and
will be exercisable at a price per share of Common Stock of $3.00. Subject to limited exceptions, a holder of Warrants will
not have the right to exercise any portion of its Warrants if the holder (together with such holder’s affiliates, and any
persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of
shares of Common Stock in excess of 4.99% (or, upon election by a holder prior to the issuance of any warrants, 9.99%) of the shares
of Common Stock then outstanding. At the holder’s option, upon notice to the Company, the holder may increase or decrease this
beneficial ownership limitation not to exceed 9.99% of the shares of Common Stock then outstanding, with any such increase becoming
effective upon 61 days’ prior notice to the Company. Additionally, subject to certain
exceptions, if, after the initial exercise date of the Warrants, (i) the volume weighted average price of the Common Stock
for any 20 consecutive trading days (the “Measurement Period”), which Measurement Period commences on the
initial exercise date, exceeds 300% of the exercise price of the Warrants issued in the Public Offering (subject to adjustments for
stock splits, recapitalizations, stock dividends and similar transactions), and (ii) the average daily trading volume for such
Measurement Period exceeds $500,000 per trading day, and subject to a beneficial ownership limitation, then the Company may call for
cancellation of all or any portion of the Warrants then outstanding.
Additionally, holders of Series A or Series B Warrants may exercise such Series A or B Warrants on a “cashless” basis after
the initial exercise date. In such event, the aggregate number of shares of common stock issuable in such cashless exercise shall equal
the product of (x) the aggregate number of shares of common stock that would be issuable upon exercise of the Series A Warrants in accordance
with their terms if such exercise were by means of a cash exercise rather than a cashless exercise and (y) 1.00.
The Underwriting Agreement contains
representations, warranties and covenants made by the Company that are customary for transactions of this type. Under the terms of
the Underwriting Agreement, the Company has agreed to indemnify the Underwriter against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Act”). In addition, pursuant to the terms of the
Underwriting Agreement, the Company, its executive officers, directors and certain of the Company’s stockholders have entered into
agreements providing that the Company and each of these persons may not, without the prior written approval of the Underwriter,
subject to limited exceptions, offer, sell, transfer or otherwise dispose of the Company’s securities until the later of
(i) 90 days following the closing of the Public Offering and (ii) 30 days following stockholder approval of the
exercisability of the Warrants is received and effective.
On November 8, 2022, the Company also entered into a warrant agency
agreement with the Company’s transfer agent, American Stock Transfer & Trust Company LLC, who will act as warrant agent for
the Company, setting forth the terms and conditions of the Warrants sold in the Public Offering (the “Warrant Agency Agreement”).
The foregoing summaries of the Underwriting Agreement, the Warrants
and the Warrant Agency Agreement do not purport to be complete and are subject to, and qualified in their entirety by, such documents
attached as Exhibits 1.1, 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K (this “Current Report”),
which are incorporated herein by reference. The Underwriting Agreement is attached hereto as an exhibit to provide interested persons
with information regarding its terms, but is not intended to provide any other factual information about the Company. The representations,
warranties and covenants contained in the Underwriting Agreement were made only for purposes of the Underwriting Agreement as of specific
dates indicated therein, were solely for the benefit of the parties to the Underwriting Agreement, and may be subject to limitations agreed
upon by the parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution
of the Underwriting Agreement.
As disclosed in the Company’s Current Report on Form 8-K filed
with the Commission on September 14, 2022 (the “September 14 8-K”), the Company entered
into a series of agreements with Dong-A ST Co., Ltd. (“Dong-A”), including a License Agreement (the “License
Agreement”), a Shared Services Agreement, a Securities Purchase Agreement (the “Securities Purchase Agreement”),
a Registration Rights Agreement and an Investor Rights Agreement. The description of the foregoing agreements is incorporated herein by
reference to the September 14 8-K.
On November 8, 2022, the Company licensed
the assets from Dong-A under the License Agreement, and the Company issued to Dong-A $22 million of its Series A Convertible
Preferred Stock, which are convertible into shares of Common Stock at a price of $3.00 per share, as an upfront payment under the
License Agreement. In addition, on such date, the Company closed the private offering of shares of Series A Convertible Preferred
Stock and Warrants to Dong-A under the Securities Purchase Agreement for gross proceeds of $15 million.
The private placement offering was comprised of Series A Convertible Preferred Stock, which are convertible into shares of Common Stock
at a price of $3.00 per share, and such number of warrants as Dong-A would have received had they invested such amount in the Public Offering.
The Series A Convertible Preferred Stock and the warrants are not convertible
or exercisable until the Company’s stockholders have approved the issuance of the shares underlying the Series A Convertible Preferred
Stock issued under the License Agreement and the Series A Convertible Preferred Stock and warrants issued and sold under the Securities
Purchase Agreement.
The terms of the Series A Convertible
Preferred Stock as the upfront payment under the License Agreement and the Series A Convertible Preferred Stock and warrants issued
in the private placement are substantially similar to the Series B Convertible Preferred Stock and Warrants issued in the Public
Offering, including a fixed conversion price of the preferred stock and the lack of any variable pricing feature or any price based
anti-dilutive feature. The warrants issued in the private placement are also exchangeable for shares of Common Stock on a one for
one basis following the initial exercise date. The Series A Convertible Preferred Stock issued as the upfront license payment and in
the private placement also has no dividend rights (except to the extent that dividends are also paid on the Common Stock) or
liquidation preference, and, subject to limited exceptions, has no voting rights.
The securities issued as part of the private placement and as part
of the upfront license payment were offered pursuant to the exemption from registration afforded by Section 4(a)(2) under the Act, and Regulation D promulgated thereunder. Such Series A Convertible Preferred Stock, the
warrants, and shares of Common Stock issuable upon conversion of the Series A Convertible Preferred Stock and exercise of the warrants
have not been registered under the Act or applicable state securities laws, and may not be offered or sold in the United States absent
registration with the Commission or an applicable exemption from such registration requirements.
The foregoing summaries of the terms of the Series
A Convertible Preferred Stock and the warrants issued to Dong-A do not purport to be complete and are subject to, and qualified in their
entirety by, such documents attached as Exhibits 3.1, 4.4 and 4.5, respectively, to this Current Report, which are incorporated herein
by reference.