Item 1.01 Entry into a Material Definitive Agreement.
On June 25, 2018, Sunesis Pharmaceuticals, Inc. (the Company) entered into a Common Stock Purchase Agreement (the Purchase
Agreement) with Aspire Capital Fund, LLC, an Illinois limited liability company (Aspire Capital), pursuant to which the Company has the right to sell to Aspire Capital from time to time in its sole discretion up to
$15.5 million in shares of the Companys common stock (Common Stock) over the next 24 months, subject to certain limitations and conditions set forth in the Purchase Agreement. Upon execution of the Purchase Agreement, the
Company agreed to sell to Aspire Capital 228,311 shares of common stock at $2.19 per share for proceeds of $500,000 (the Initial Purchase Shares).
Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the
Registration Rights Agreement), in which the Company agreed to prepare and file under the Securities Act of 1933, as amended (the Securities Act), under its current registration statement on Form
S-3
(SEC File
No. 333-218607),
and file, if needed, one or more registration statements, as permissible and necessary, for the sale of the shares of the Companys
common stock that have been and may be issued to Aspire Capital under the Purchase Agreement.
Under the Purchase agreement, in additional
to the Initial Purchase Shares, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a Purchase Notice), directing Aspire Capital (as
principal) to purchase up to 200,000 shares of the Companys common stock per business day, up to $15.0 million of the Companys common stock in the aggregate at a per share price (the Purchase Price) equal to the lesser
of:
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the lowest sale price of the Companys common stock on the purchase date; or
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the arithmetic average of the three (3) lowest closing sale prices for the Companys common stock during the ten (10) consecutive trading days ending on the trading day immediately preceding the purchase
date.
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The Company and Aspire Capital also may mutually agree to increase the number of shares that may be sold to as much
as an additional 2,000,000 shares per business day.
In addition, on any date on which the Company submits a Purchase Notice to Aspire
Capital in an amount equal to at least 200,000 shares, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a VWAP Purchase Notice) directing Aspire
Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Companys common stock traded on its principal market on the next trading day (the VWAP Purchase Date), subject to a maximum number of shares
the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is
generally 97% of the volume-weighted average price for the Companys common stock traded on its principal market on the VWAP Purchase Date.
The Purchase Price will be adjusted for any reorganization, recapitalization,
non-cash
dividend,
stock split, or other similar transaction occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the
Purchase Agreement, so long as the most recent purchase has been completed.
The Purchase Agreement provides that the Company and Aspire Capital shall not effect any sales
under the Purchase Agreement on any purchase date where the closing sale price of the Companys common stock is less than $0.25. There are no trading volume requirements or restrictions under the Purchase Agreement, and the Company will control
the timing and amount of sales of the Companys common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with
the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. In
consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, the Company issued to Aspire Capital 212,329
shares of the Companys common stock (the Commitment Shares). The
Purchase Agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or
indirect short-selling or hedging of the Companys common stock during any time prior to the termination of the Purchase Agreement.
Any proceeds that the Company receives under the Purchase Agreement are expected to be used for general
corporate purposes, including working capital.
The foregoing is a summary description of certain terms of the Purchase Agreement and the
Registration Rights Agreement and, by its nature, is incomplete. Copies of the Purchase Agreement and Registration Rights Agreement are filed herewith as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form
8-K
and are incorporated herein by reference. All readers are encouraged to read the entire text of the Purchase Agreement and the Registration Rights Agreement.
The Company is filing the opinion of its counsel, Cooley LLP, relating to the legality of the shares of common stock offered and sold pursuant
to the Purchase Agreement, as Exhibit 5.1 hereto.