UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 1.01. Entry into a Material Definitive Agreement
On March 15, 2024, SELLAS Life Sciences Group, Inc., a Delaware corporation (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with institutional investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors (the “Registered Offering”), (i) an aggregate of 11,000,000 shares (the “Shares”) of common stock, par value $0.0001 per share, of the Company (“Common Stock”) and (ii) an aggregate of 2,029,316 pre-funded warrants exercisable for shares of Common Stock (the “Pre-Funded Warrants”) to the Investors. Each share of Common Stock is being sold at an offering price of $1.535, and each Pre-Funded Warrant is being sold at an offering price of $1.5349. The aggregate gross proceeds to the Company from the Offering are expected to be approximately $20.0 million before deducting the placement agent’s fees and related offering expenses.
The Pre-Funded Warrants were sold, in lieu of shares of Common Stock, to the Investors such that the Investors’ purchase of shares of Common Stock in the Offering would not otherwise result in the Investor, together with their affiliates and certain related parties, beneficially owning more than 4.99% or 9.99% of the Company’s outstanding Common Stock immediately following the consummation of the Offering. Each Pre-Funded Warrant represents the right to purchase one share of Common Stock at an exercise price of $0.0001 per share. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until the Pre-Funded Warrants are exercised in full.
The Shares and Pre-Funded Warrants were offered by the Company pursuant to a registration statement on Form S-3 (File No. 333-255318), which was filed with the Securities and Exchange Commission (the “Commission”) on April 16, 2021 and was declared effective by the Commission on April 29, 2021 (the “Registration Statement”).
In a concurrent private placement (the “Private Placement” and together with the Registered Offering, the “Offerings”), the Company agreed to issue to the Investors exercisable for up to an aggregate of 13,029,316 shares of common stock warrants (the “Common Warrants”) at an exercise price of $1.41 per share. Each Common Warrant will be exercisable immediately on the issuance date and will expire five years and six months from the issuance date. The Common Warrants and the shares of our Common Stock issuable upon the exercise of the Common Warrants are not being registered under the Securities Act of 1933, as amended (the “Securities Act”), were not offered pursuant to the Registration Statement and were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder.
The Investors (together with their respective affiliates) may not exercise any portion of the Pre-Funded Warrants or Common Warrants to the extent that the Investors would own more than 4.99% (or, at the Investor’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 Investor to the Company, the Investor may increase the amount of ownership of outstanding Common Stock after exercising the Investor’s Pre-Funded Warrants or Common Warrants 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 Pre-Funded Warrant.
The Purchase Agreement contains customary representations and warranties and agreements of the Company and the Investor and customary indemnification rights and obligations of the parties. Pursuant to the terms of the Purchase Agreement, the Company has agreed to certain restrictions on the issuance and sale of its Common Stock or Common Stock Equivalents (as defined in the Purchase Agreement) during the 60-day period following the closing of the Offering.
Pursuant to the terms of the Purchase Agreement, the Company agreed to use commercially reasonable efforts to cause a registration statement providing for the resale by holders of shares of its Common Stock issuable upon the exercise of the Common Warrants, to become effective 30 days (or, in the event of a “full review” by the Commission, within 60 days) following the closing of the Offerings and to keep such registration statement effective at all times.
The Offerings are expected to close on or about March 19, 2024, subject to customary closing conditions.
On March 15, 2024, the Company entered into a placement agency agreement (the “Placement Agent Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”) (the “Placement Agent”) pursuant to which the Company engaged A.G.P. as the exclusive placement agent in connection with the Offering. The Company agreed to pay the Placement Agent a fee in cash equal to 7.0% of the gross proceeds from the sale of the Shares, Pre-Funded Warrants and Common Warrants to the Investors. The Company also agreed to reimburse the Placement Agents for all reasonable and documented travel and other out-of-pocket expenses, including the reasonable fees of legal counsel not to exceed $60,000. The Placement Agent Agreement also contains representations, warranties, indemnification and other provisions customary for transactions of this nature.
The foregoing summaries of the Placement Agent Agreement, the Purchase Agreement, the Pre-Funded Warrants and the Common Warrants do not purport to be complete and are subject to, and qualified in their entirety by, such documents attached as Exhibits 1.1, 10.1, 4.1, and 4.2, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.
This Current Report on Form 8-K does not constitute an offer to sell any securities or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
A copy of the opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. relating to the legality of the issuance and sale of the Shares is attached as Exhibit 5.1 hereto.
Item 8.01. Other Events
On March 15, 2024, the Company issued a press release (the “Pricing Press Release”) announcing the pricing of the Offering. A copy of the Pricing Press Release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description | |
| 1.1 | Form of Placement Agent Agreement. | |
| 4.1 | Form of Pre-Funded Warrant. | |
| 4.2 | Form of Common Warrant. | |
| 5.1 | Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. | |
| 10.1 | Form of Securities Purchase Agreement, dated as of March 15, 2024, by and among SELLAS Life Sciences Group, Inc. and the purchasers party thereto. | |
| 23.1 | Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (included in Exhibit 5.1). | |
| 99.1 | Pricing Press Release, dated March 15, 2024. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SELLAS Life Sciences Group, Inc. | ||||
| Date: | March 15, 2024 | By: | /s/ John T. Burns | |
| Name: | John T. Burns | |||
| Title: | Senior Vice President, Chief Financial Officer | |||