|
Item 1.01.
|
Entry into a Material Definitive Agreement.
|
On August 25, 2020, XpresSpa Group, Inc., a
Delaware corporation (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”)
with certain purchasers named therein (the “Purchasers”), pursuant to which the Company agreed to issue and sell, in
a registered direct offering (the “Offering”), (i) 10,407,408 shares (the “Shares”) of the Company’s
common stock, par value $0.01 per share (the “Common Stock”) (ii) warrants exercisable for an aggregate of 11,216,932
shares of Common Stock (the “Warrants”) at a combined offering price of $3.15 per share. The Warrants have an exercise
price of $3.02 per share. Each Warrant will be immediately exercisable and will expire 24 months from the issuance date.
The Company also offered and sold to certain
purchasers pre-funded warrants to purchase an aggregate of 809,524 shares of Common Stock (the “Pre-Funded Warrants”
and, together with the Shares and the Warrants, the “Securities”), in lieu of shares of Common Stock. Each Pre-Funded
Warrant is exercisable for one share of our Common Stock. The purchase price of each Pre-Funded Warrant is equal to the price at
which a share of Common Stock is sold to the public in this offering, minus $0.001, and the exercise price of each pre Pre-Funded
Warrant is $0.001 per share. Subject to the ownership limits described in the following paragraph, 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.
A holder (together with its affiliates) may
not exercise any portion of the Warrant or Pre-Funded Warrant to the extent that the holder would own more than 4.99% (or, at the
holder’s option upon issuance, 9.99%) of the Company’s outstanding Common Stock immediately after exercise. However,
upon at least 61 days’ prior notice from the holder to the Company, a holder with a 4.99% ownership blocker may increase
the amount of ownership of outstanding Common Stock after exercising the holder’s Warrant or Pre-Funded Warrant up to 9.99%
of the number of the Company’s Common Stock outstanding immediately after giving effect to the exercise, as such percentage
ownership is determined in accordance with the terms of the Warrant or Pre-Funded Warrant.
The Purchase Agreement contains customary representations
and warranties and agreements of the Company and the Purchasers and customary indemnification rights and obligations of the parties.
The closing of the Offering occurred on August 28, 2020. The Company received gross proceeds of approximately $35.3 million in
connection with the Offering, before deducting placement agent fees and related offering expenses.
Pursuant to a letter agreement,
dated March 25, 2020, as amended on June 16, 2020
(the “Engagement Letter”), the Company engaged H.C. Wainwright & Co., LLC (the “Placement Agent”) as
placement agent in connection with the Offering. The Placement Agent agreed to use its reasonable best efforts to arrange for the
sale of the Securities. The Company agreed to pay to the Placement Agent a cash fee of 7.5% of the aggregate gross proceeds raised
in the Offering, plus a management fee equal to 1.0%
of the gross proceeds raised in the Offering and reimbursement of certain expenses and legal fees. Pursuant to the Engagement
Letter, the Company also issued to designees of the Placement Agent warrants to purchase up to 8.0% of the aggregate number of
shares of Common Stock sold in the transactions, or warrants to purchase up to 897,355 shares of Common Stock (the “Placement
Agent Warrants”). The Placement Agent Warrants have substantially the same terms as the Warrants, except that the Placement
Agent Warrants have an exercise price equal to 125% of the offering price per share (or $3.9375 per share). The Placement Agent Warrants and the shares issuable upon exercise of the Placement Agent Warrants were issued pursuant to the Registration
Statement. The Company also agreed
to pay the Placement Agent $25,000 for non-accountable expenses, to reimburse the Placement Agent’s legal fees in an amount
up to $40,000 and to pay $12,900 for the Placement Agent’s clearing fees. Pursuant
to the terms of the Engagement Letter, the Placement Agent has the right, for a period of twelve months following the closing of
the Offerings, to act (i) as financial advisor in connection with any merger, consolidation or similar business combination by
the Company and (ii) as sole book-running manager, sole underwriter or sole placement agent in connection with certain debt and
equity financing transactions by the Company.
The foregoing summaries of the Purchase
Agreement, the Warrants, the Pre-Funded Warrants and the Placement Agent Warrants do not purport to be complete and are subject
to, and qualified in their entirety by, the forms of such documents attached as Exhibits 10.1, 4.1, 4.2 and 4.3, respectively,
to this Current Report on Form 8-K, which are incorporated herein by reference.
The Securities
in the Offering were offered by the Company pursuant to a registration statement on Form S-3 (File No. 333- 240084), which
was filed with the Securities and Exchange Commission (the “Commission”) on July 24, 2020 and was declared effective
by the Commission on August 5, 2020 (the “Registration Statement”). A
copy of the opinion of Bryan Cave Leighton Paisner LLP relating to the legality of the issuance and sale of the Securities in the
Offering is attached as Exhibit 5.1 hereto. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation
of an offer to buy securities, nor shall there be any sale of 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.