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Item 1.01
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Entry into a Material Definitive Agreement
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On May 22, 2020, Outlook Therapeutics, Inc. (the
“Company”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Syntone Ventures
LLC (“Purchaser”), a U.S. affiliate of Syntone Technologies Group Co. Ltd. (“Syntone”), a PRC
company, pursuant to which the Company agreed to sell and issue, in a private placement, an aggregate of 16,000,000 shares
(the “Shares”) of the Company’s common stock, par value $0.01 per share, at a purchase price of $1.00 per
share, for aggregate gross proceeds to the Company of $16.0 million.
In connection with the entry into the Purchase Agreement,
the Company and Syntone entered into a joint venture agreement, pursuant to which they agreed to form a PRC joint venture that
will be 80% owned by Syntone and 20% owned by the Company. Once formed, the Company intends to enter into a royalty-free license
for the development, commercialization and manufacture of the Company’s product candidate, ONS-5010 / LYTENAVA™ (bevacizumab-vikg)
in the greater China market, which includes Hong Kong, Taiwan and Macau, with the PRC joint venture.
The closing of the sale of the Shares is subject to
customary closing conditions and is expected to occur within five business days.
The Company intends to use net proceeds
for working capital and general corporate purposes, including in support of its ONS-5010 development program, with approximately
$0.9 million of the proceeds used to fund its initial capital contribution to the PRC joint venture. The Company expects to be
required to make an additional capital contribution to the PRC joint venture of approximately $2.0 million within the next four
years.
The Purchase Agreement provides that neither Purchaser
nor its affiliates, without the Company’s prior written consent and subject to certain conditions and exceptions, among other
things, directly or indirectly will acquire additional shares of the Company’s outstanding common stock, seek or propose
a tender or exchange offer, merger or other business combination involving the Company, solicit proxies or consents with respect
to any matter, or undertake other specified actions related to the potential acquisition of additional equity interests in the
Company (collectively, the “Standstill Restrictions”). The Standstill Restrictions will expire on the earlier of (a)
the three-year anniversary of the closing of the sale of the Shares and (b) the date that Purchaser beneficially owns less than
5% of the Company’s common stock.
The Purchase Agreement also provides that until the
first anniversary of the closing of the sale of the Shares, Purchaser will hold and not sell any of the Shares, subject to certain
exceptions, and from the one-year anniversary of the closing through the two-year anniversary of the closing, that Purchaser will
hold and will not sell at least 50% of the Shares, subject to certain exceptions. In addition, following the initial holding period,
Purchaser agreed to certain volume restrictions with respect to resales of Shares. The Company also agreed to register the Shares
for resale (both demand, beginning three years after the closing, and piggyback, following expiration of the initial one-year lock-up
period) if Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), is not available for the resale
of such Shares without any volume or manner of sale restrictions.
In addition, the Company granted Purchaser a general right
of first offer to participate in future capital raising transactions, among others, for a period of three-years following the
closing of the sale of the Shares, and provided Purchaser the right to designate one nominee to its Board of Directors for so
long as it owns at least 10% of the Company’s common stock, and for one-year period thereafter (so long as it
beneficially owns at least 5% during such one-year period). Purchaser is expected to provide written notice of its designee
within 30 days of the closing of the sale of the Shares.
The Shares are being offered by the Company pursuant to the
exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. In connection with Purchaser’s execution of the Purchase Agreement, Purchaser represented to the Company that it is an “accredited
investor” as defined in the Securities Act, among other items.
The foregoing description of the Purchase Agreement
is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed
herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.