Item 1.01. Entry into a Material Definitive Agreement.
On June 28, 2019, Sorrento
Therapeutics, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting
Agreement”) with JMP Securities LLC (the “Representative”), as representative of the several underwriters
named therein (the “Underwriters”), relating to a firm commitment underwritten public offering (the
“Offering”) of 8,333,334 shares of the Company’s common stock (“Common Stock”), Series A
warrants to purchase up to an aggregate of 8,333,334 shares of Common Stock (the “Series A Warrants”), Series B
warrants to purchase up to an aggregate of 8,333,334 shares of Common Stock (the “Series B Warrants”) and Series
C warrants to purchase up to an aggregate of 8,333,334 shares of Common Stock (the “Series C Warrants” and,
together with the Series A Warrants and the Series B Warrants, the “Warrants”). The public offering price is
$3.00 per share of Common Stock and accompanying Series A, Series B and Series C Warrant and the Underwriters have agreed to
purchase the Common Stock and accompanying Series A, Series B and Series C Warrants pursuant to the Underwriting Agreement at
a price of $2.82 per share and accompanying Series A, Series B and Series C Warrant. The Series A Warrants will
be exercisable six months from the date of issuance, will expire on the 10-year anniversary of the date
of issuance and will have an exercise price of $3.75. The Series B warrants will be exercisable commencing on the date of
issuance, will expire on the date that is nine months from the date of issuance and will have an exercise price of $3.00 per
share. The Series C Warrants will be exercisable six months from the date of issuance and only to the extent and in
proportion to a holder of the Series C warrants exercising its Series B Warrants, will expire on the 10-year anniversary of
the date of issuance and will have an exercise price of $3.75 per share. The exercise prices of the Warrants are subject to
certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the Common Stock. In the
event of a fundamental transaction, as described in the Warrants, the holders of the Warrants shall have the right to
exercise the Series A Warrants, Series B Warrants and/or Series C Warrants and receive the same amount and kind of
securities, cash or property as such holder would have been entitled to receive upon the occurrence of such fundamental
transaction if it had been, immediately prior to such fundamental transaction, the holder of shares of Common Stock issuable
upon the exercise of the Series A Warrants, Series B Warrants and/or Series C Warrants. Additionally, in the event of a
fundamental transaction within the Company’s control, as described in the Warrants, a holder of Series A Warrants
and/or Series C Warrants will have the right to require the Company to repurchase the unexercised portion of their Series A
Warrants and/or Series C Warrants at their respective fair values using the Black Scholes option pricing formula. In the
event of a fundamental transaction that is not within the Company’s control, the holder of Series A Warrants and/or
Series C Warrants will have the right to require the Company or a successor entity to redeem the unexercised portion of their
Series A Warrants and/or Series C Warrants for the same consideration paid to the holders of Common Stock in the fundamental
transaction at the respective unexercised warrants’ fair value using the Black Scholes option pricing formula.
Under the terms of the Underwriting Agreement,
the Company also granted to the Underwriters an option, exercisable in whole or in part at any time for a period of 30 days from
the date of the Underwriting Agreement, to purchase up to an additional 1,250,000 shares of Common Stock (“Additional Shares”)
and/or 1,250,000 combinations of Warrants (comprised of an aggregate of 1,250,000 Series A Warrants, 1,250,000 Series B Warrants
and 1,250,000 Series C Warrants) (“Warrant Combinations”), at the public offering price of $2.99 per Additional Share
and the public offering price per Warrant Combination of $0.01, less underwriting discounts and commissions.
The Offering is being made pursuant to
the Company’s registration statement on Form S-3 (File No. 333-221443), as amended, which was declared effective by
the Securities and Exchange Commission (the “SEC”) on December 6, 2017, a base prospectus dated December 6, 2017 and
a prospectus supplement dated June 28, 2019.
Gross proceeds from the Offering are expected
to be approximately $25.0 million (excluding any sale of Additional Shares or Warrant Combinations and excluding any proceeds from
the exercise of any Warrants), before deducting underwriting discounts and commissions and estimated Offering expenses payable
by the Company. The purchase and sale of the Common Stock and the Warrants, and the closing of the Offering, is expected to take
place on or about July 2, 2019, subject to the satisfaction of customary closing conditions.
The Underwriting Agreement contains customary
representations, warranties and covenants made by the Company. It also provides for customary indemnification by each of the Company
and the Underwriters, severally and not jointly, for losses or damages arising out of or in connection with the Offering, including
for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. In addition,
pursuant to the terms of the Underwriting Agreement, each of the Company’s directors and executive officers have entered
into “lock-up” agreements with the Underwriters that generally prohibit, without the prior written consent of the Representative,
the sale, transfer or other disposition of securities of the Company prior to September 26, 2019.
The foregoing descriptions of the Underwriting
Agreement and the Warrants do not purport to be complete and are qualified in their entirety by reference to the copies of the
Underwriting Agreement, Form of Series A Warrant, Form of Series B Warrant and Form of Series C Warrant, which are filed as Exhibits
1.1, 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K. A copy of the opinion of Paul Hastings LLP, counsel to
the Company, relating to the validity of the shares of Common Stock and Warrants to be issued in the Offering is filed with this
Current Report on Form 8-K as Exhibit 5.1.
The representations, warranties and covenants
contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for
the benefit of the parties to the Underwriting Agreement, and may be subject to limitations agreed upon by the contracting parties.
Accordingly, the Underwriting Agreement is incorporated herein by reference only to provide investors with information regarding
the terms of the Underwriting Agreement, and not to provide investors with any other factual information regarding the Company
or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings
with the SEC.
Forward-Looking Statements
This Current Report on Form 8-K contains
forward-looking statements that involve risks and uncertainties, such as statements related to the anticipated closing of the Offering
and the amount of proceeds expected from the Offering. The risks and uncertainties involved include the Company’s ability
to satisfy certain conditions to closing on a timely basis or at all, market conditions, and other risks detailed from time to
time in the Company’s periodic reports and other filings with the SEC. You are cautioned not to place undue reliance on forward-looking
statements, which are based on the Company’s current expectations and assumptions and speak only as of the date of this Current
Report on Form 8-K. The Company does not intend to revise or update any forward-looking statement in this Current Report on Form
8-K as a result of new information, future events or otherwise, except as required by law.