Item 1.01. Entry into a Material Definitive Agreement
At the Market Offerings
On December 10, 2020, Heat Biologics, Inc. (the Company) entered into Amendment No. 1 (the Amendment) to that certain Amended and Restated At Market Issuance Sales Agreement, dated August 24, 2020 (the Sales Agreement), by and among the Company, B. Riley Securities, Inc. (B. Riley) and Cantor Fitzgerald & Co. (Cantor) pursuant to which the Company may offer and sell, from time to time, at its option, shares of the Companys common stock, par value $0.0002 per share, through B. Riley and Cantor, as sales agents (the Sales Agents) in an at the market offering (the ATM Offering). The Amendment will be effective at the time that the Companys shelf Registration Statement on Form S-3, initially filed on December 10, 2020 (the New Registration Statement), is declared effective by the Securities and Exchange Commission (the Commission).
The original Amended and Restated Sales Agreement provided for the issuance and sale of shares of common stock in the ATM Offering pursuant to the Companys prior shelf Registration Statement on Form S-3 (File No. 333-237808)(the Prior Registration Statement), which included a base prospectus, a sales agreement prospectus included in the Prior Registration Statement at the time that it was initially declared effective by the Commission and prospectus supplements dated July 27, 2020 and August 24, 2020 (the Prior Prospectuses), providing for the sale of up to $150 million of shares of common stock in the ATM. As of December 9, 2020, the Company issued and sold an aggregate of 75,466,257 shares of common stock for aggregate gross proceeds of approximately $103,846,426 pursuant to the Sales Agreement under the Prior Registration Statement and the Prior Prospectuses.
The Sales Agreement provides for the issuance and sale of shares of common stock in the ATM Offering pursuant to the New Registration Statement. The issuance and sale of shares of common stock in the ATM Offering will be made under the New Registration Statement, once it is declared effective, pursuant to a prospectus, which consists of a base prospectus and a prospectus (the ATM Prospectus), each of which has been filed with the New Registration Statement. The ATM Prospectus provides for the sale of up to $150 million of shares of common stock in the ATM Offering under the New Registration Statement.
Under the terms of the Sales Agreement, in no event will the Company issue or sell through the Sales Agent such number or dollar amount of shares of common stock that would (i) exceed the number or dollar amount of shares of common stock registered and available on the Registration Statement, (ii) exceed the number of authorized but unissued shares of common stock, (iii) exceed the number or dollar amount of shares of common stock permitted to be sold under Form S-3 (including General Instruction I.B.6 thereof, if applicable), or (iv) exceed the number or dollar amount of common stock for which the Company has filed a prospectus supplement to the Registration Statement.
Under the terms of the Sales Agreement, the Company may sell shares of its common stock through the Sales Agents by any method permitted that is deemed an at the market offering as defined in Rule 415 under the Securities Act of 1933, as amended (the Securities Act). The Sales Agents will use their commercially reasonable efforts consistent with their respective normal trading and sales practices and applicable state and federal laws, rules and regulations to sell the Companys common stock from time to time, based upon the Companys instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). Actual sales will depend on a variety of factors to be determined by the Company from time to time, including (among others) market conditions, the trading price of the Companys common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company. The Company is not obligated to make any sales of common stock under the Sales Agreement and the Company cannot provide any assurances that it will issue any shares pursuant to the Sales Agreement. The Company will pay a commission rate of up to 3.0% of the gross sales price per share sold and agreed to reimburse the Sales Agents for certain specified expenses, including the fees and disbursements of its legal counsel in an amount not to exceed $50,000 and have agreed to reimburse Sales Agents an amount not to exceed $2,500 per quarter during the term of the sales agreement for legal fees to be incurred by the Sales Agents. The Company has also agreed pursuant to the Sales Agreement to provide the Sales Agents with customary indemnification and contribution rights.
This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy any security nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The description of the Sales Agreement and the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Sales Agreement and the Amendment, copies of which are filed herewith as Exhibits 1.1. and 1.2, and are incorporated herein by reference.
The representations, warranties and covenants contained in the Sales Agreement were made solely for the benefit of the parties thereto. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to the Sales Agreement and the Amendment and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Sales Agreement, which subsequent information may or may not be fully reflected in public disclosures.
License Agreement Amendments
On December 7, 2020, the Company entered into separate amendments to its existing four (4) license agreements with the University of Miami to extend to December 31, 2025, the date by which the University of Miami may terminate the license agreements if by such date the Company will not have introduced a licensed product into the commercial marketplace in one of the three major markets (European Union, Japan and the United States) or will not have made best efforts to achieve the same.
The four (4) license agreements so amended are: (i) License Agreement (UMI-176) between the University of Miami and Heat Biologics, Inc. effective December 12, 2010, (ii) License Agreement (UMSS-114 (previously UM 97-14)) between the University of Miami and Heat Biologics, Inc. effective July 11, 2008, (iii) License Agreement (D-107) between the University of Miami and Heat I, Inc. effective February 18, 2011, and (iv) License Agreement (UMSS-114A) between the University of Miami and Heat I, Inc. effective February 18, 2011.
The foregoing summary of the Amendments does not purport to be complete and is qualified in its entirety by reference to the full texts of the amendments to the license agreements that are filed as Exhibits 10.1, 10.2, 10.3, and 10.4, respectively, to this Current Report on Form 8-K.