| Item 1.01. |
Entry into a Material Definitive Agreement. |
On December 12, 2022, ContraFect Corporation, a Delaware corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with a certain institutional investor (the “Purchaser”). The Purchase Agreement provided for the sale and issuance by the Company of an aggregate of: (i) 4,350,000 shares (the “Shares”) of the Company’s common stock, $0.0001 par value (the “Common Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 49,913,565 shares of Common Stock, (iii) Class A warrants (the “Class A Warrants”) to purchase up to 108,527,130 shares of Common Stock, and (iv) Class B warrants (the “Class B Warrants” and together with Class A Warrants, the “Private Warrants”) to purchase up to 54,263,565 shares of Common Stock. The offering price per Share was $0.1290. The offering price per underlying share of the Pre-Funded Warrant was $0.1289, and the exercise price was $0.0001 per underlying share. The exercise price per underlying share of each of the Private Warrants was $0.1290.
The Shares and the Pre-Funded Warrants were offered pursuant to an effective shelf registration statement on Form S-3 (Registration No. 333-246359) and a related prospectus supplement filed with the Securities and Exchange Commission (the “Registered Direct Offering”). The Private Warrants were sold in a concurrent private placement (the “Private Placement”), exempt from registration pursuant to Section 4(a)(2) and/or Rule 506 of the Securities Act of 1933, as amended (the “Securities Act”).
The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full, subject to the Beneficial Ownership Limitation (as described below).
Each Private Warrant will be exercisable only following Stockholder Approval (as described below). The Class A Warrant will expire on the fifth anniversary of the date on which such Class A Warrants become exercisable. The Class B Warrant will expire on the six-month anniversary of the date on which such Class B Warrants become exercisable. The Private Warrants contain standard adjustments to the exercise price including for stock splits, stock dividend, rights offerings and pro rata distributions, and, until the date that is 18 months (in the case of the Class A Warrant) or six months (in the case of the Class B Warrant) after the date upon which the applicable Private Warrants first become exercisable, include full ratchet anti-dilutive adjustment rights in the event the Company issues shares of Common Stock or Common Stock equivalents in the future with a value less than the then effective exercise price of such Private Warrants, subject to certain customary exceptions, and further subject to a minimum exercise price of $0.03225 per share. The Private Warrants also include certain rights upon “fundamental transactions” as described in the Private Warrants, including the right of the holders thereof to receive from the Company or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of Common Stock in such fundamental transaction in the amount of the Black Scholes value (as described in such Private Warrants) of the unexercised portion of the applicable Private Warrants on the date of the consummation of such fundamental transaction.
The Pre-Funded Warrants include cashless exercise rights at all times, and the Private Warrants include cashless exercise rights to the extent the shares of Common Stock underlying the Private Warrants are not registered under the Securities Act.
Under the Purchase Agreement, the Company agreed to hold a special meeting of shareholders (which may also be at the annual meeting of shareholders) by no later than February 21, 2023 for the purpose of obtaining the following approvals (referred to herein, collectively, as the “Shareholder Approval”): (i) the approval by the Company’s shareholders and the effectiveness of an amendment to the Company’s certificate of incorporation that either (x) combines outstanding shares of Common Stock with such combination ratio as determined by the Company’s board of directors and/or (y) authorizes additional shares of Common Stock to such number as determined by the Company’s board of directors, in each case, so as to enable the issuance of a number of shares equal to, in addition to all of the Company’s outstanding Common Stock, at least all of the shares of Common Stock being offered in the Registered Direct Offering, plus all of the shares of Common Stock underlying the Pre-Funded Warrant, plus all of the shares of common stock underlying the Private Warrants (disregarding any limitations on the exercise thereof), and (ii) such approval as may be required by the applicable rules and regulations of the Nasdaq Stock Market (or any successor entity) from the Company’s shareholders with respect to the Registered Direct Offering and Private Placement transactions.