Item 1.01 Entry into a Definitive Material Agreement
As previously reported, on August 28, 2020, Motus GI Holdings, Inc. (the
"Company") entered into a Securities Purchase Agreement (the "Purchase
Agreement") with an institutional investor (the "Holder"), pursuant to which the
Company issued to the Investor, securities of the Company, including warrants
(the "Existing Warrants") to purchase up to 8,733,625 shares of common stock,
par value $0.0001 per share (the "Common Stock"), of the Company (the "Warrant
Shares"). The Existing Warrants were immediately exercisable at an exercise
price of $1.30 per share and expired on the fifth anniversary of the date of
issuance.
On January 27, 2021, the Company entered into a Warrant Exercise Agreement (the
"Exercise Agreement") with the Holder. Pursuant to the Exercise Agreement, in
order to induce the Holder to exercise all of the remaining 8,000,000
outstanding Existing Warrants for cash, pursuant to the terms of and subject to
beneficial ownership limitations contained in the Existing Warrants, the Company
agreed to issue to the Holder, new warrants (the "New Warrants") to purchase
0.75 shares of Common Stock for each share of Common Stock issued upon such
exercise of the remaining 8,000,000 outstanding Existing Warrants pursuant to
the Exercise Agreement or an aggregate of 6,000,000 New Warrants. The terms of
the New Warrants will be substantially similar to those of the Existing
Warrants, except that the New Warrants will have an exercise price of $2.12 (a
20% premium to the closing price of the Company's Common Stock on the Nasdaq
Capital Market on January 26, 2021), will be immediately exercisable and will
expire five years from the date of the Exercise Agreement. The Holder will pay
an aggregate of $600,000 to the Company for the purchase of the New Warrants.
The Company expects to receive aggregate gross proceeds before expenses of
approximately $11.0 million from the exercise of all of the remaining 8,000,000
outstanding Existing Warrants held by the Holder and the payment of the purchase
price for the New Warrants.
Pursuant to the Exercise Agreement, the Holder has agreed, until the date that
no Existing Warrants are held by such Holder (i) not to purchase any shares of
Common Stock, other than pursuant to exercises of the Existing Warrants and (ii)
not to transfer any Existing Warrants other than to transferees who assume the
obligations under the Exercise Agreement.
The Warrant Shares were registered for resale pursuant to a registration
statement on Form S-1 (File No. 333-249565), filed with the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act"), on October 20, 2020, which became effective on October
29, 2020. Pursuant to the terms of the Exercise Agreement, the Company has
agreed to file a registration statement to register for resale the shares of
Common Stock underlying the New Warrants within 30 days of the final exercise of
the Existing Warrants.
In connection with the Exercise Agreement, the Company entered into a financial
advisory agreement (the "Letter Agreement") with A.G.P./Alliance Global Partners
("A.G.P."), pursuant to which A.G.P. acted as exclusive financial advisor to the
Company in this transaction and will receive a cash fee of $300,000 upon full
cash exercise of the Existing Warrants. As additional compensation, A.G.P. will
receive a cash fee equal to $200,000 upon the cash exercise in full of the New
Warrants.
Pursuant to the Exercise Agreement, the Company agreed that through March 13,
2021, subject to certain exceptions, not to directly or indirectly, offer, sell,
grant any option to purchase, or otherwise dispose of (or announce any offer,
sale, grant or any option to purchase or other disposition of) any of its or its
subsidiaries' debt, equity or equity equivalent securities.
The description of terms and conditions of the New Warrants, the Exercise
Agreement, and the Letter Agreement set forth herein do not purport to be
complete and are qualified in their entirety by reference to the full text of
the form of New Warrants, the form of Exercise Agreement, and the Letter
Agreement which are attached hereto as Exhibits 4.1, 10.1, and 10.2,
respectively, and are incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities
The description of the Existing Warrants and the New Warrants set forth under
Item 1.01 is incorporated herein by reference.
The Company will issue the New Warrants and the shares of Common Stock
underlying the New Warrants to the Holder in reliance on the exemption from
registration provided for under Section 4(a)(2) of the Securities Act. The
Company relied on this exemption from registration for private placements based
in part on the representations made by the Holder, including the representations
with respect to the Holder's status as an "accredited investor," as such term is
defined in Rule 501(a) of the Securities Act, and the Holder's investment
intent.
Item 7.01 Regulation FD Disclosure.
On January 27, 2021, the Company issued a press release in connection with the
Exercise Agreement. The press release is attached hereto as Exhibit 99.1 and
incorporated by reference in this Item 7.01.
The information presented in Item 7.01 of this Current Report on Form 8-K and
Exhibit 99.1 is being furnished and shall not be deemed to be "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to the liabilities of that section, and
shall not be deemed to be incorporated by reference into any filing under the
Securities Act or the Exchange Act, except as shall be expressly set forth by a
specific reference in such filing.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Exhibit
4.1 Form of New Warrant
10.1 Form of Warrant Exercise Agreement, dated as of January 27, 2021, by
and between Motus GI Holdings, Inc. and the Holder.
10.2 Letter Agreement, dated as of January 27, 2021, by and between
A.G.P./Alliance Global Partners and the Company
99.1 Press release issued by Motus GI Holdings, Inc. dated January 27,
2021
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