Current Report — Form 8-K Filing Table of Contents
Document/ExhibitDescriptionPagesSize 1: 8-K Current Report HTML 39K
2: EX-4.1 Equity Grant Agreement, Dated April 5, 2021 HTML 64K
Between the Company and Pfizer, Inc
3: EX-4.2 Form of Warrant HTML 62K
4: EX-99.1 Press Release Dated April 5, 2021 Regarding the HTML 18K
License Agreement
5: EX-99.2 Press Release Dated April 5, 2021 Regarding the HTML 27K
Loan Agreement and Other Business Updates
6: EX-99.3 Supplemental Business Description HTML 163K
7: EX-99.4 Supplemental Risk Factors HTML 74K
14: R1 Document and Entity Information HTML 51K
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(Address of Principal Executive Offices and Zip Code)
(i763)
i392-0767
(Registrant’s telephone number, including area
code)
Not Applicable
(Former Name or Former Address, if Changed Since Last
Report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
i☐Written communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
i☐Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR
240.14a-12)
i☐Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
i☐Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
Symbol(s)
Name of
each exchange on which registered
i
Common Stock, $0.001 par value per
share
i
CELC
The
iNasdaq
Stock Market LLC
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§
230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company i☒
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. i☒
Item
1.01
Entry
into a Material Definitive Agreement.
License Agreement
On April 8, 2021, Celcuity Inc. (the “Company”)
entered into a license agreement (the “License
Agreement”) with Pfizer,
Inc. (“Pfizer”),
pursuant to which the Company acquired exclusive (including as to
Pfizer) worldwide sublicensable rights to research, develop,
manufacture, and commercialize gedatolisib, a potent,
well-tolerated, reversible dual inhibitor that targets PI3K and
mTOR, for the treatment, diagnosis and prevention of all diseases.
Pursuant to the License Agreement, the Company is obligated to use
commercially reasonable efforts to develop and seek regulatory
approval for at least one product in the United States and if
regulatory approval is obtained, to commercialize such product in
the United States and at least one international major
market.
The Company paid Pfizer a $5.0 million upfront fee upon execution
of the License Agreement and, pursuant to an Equity Grant
Agreement, issued to Pfizer $5.0 million of shares of the
Company’s common stock. The number of shares to be issued
will be calculated by dividing $5.0 million by the closing price of
a share of the Company’s common stock on the Nasdaq Capital
Market on the effective date of the License Agreement. The Company
is also required to make milestone payments to Pfizer upon
achievement of certain development and commercial milestone events,
up to an aggregate of $330.0 million. Additionally, the Company
will pay Pfizer tiered royalties on sales of gedatolisib at
percentages ranging from the low to mid-teens, which may be subject
to deductions for expiration of valid claims, amounts due under
third-party licenses and generic competition. Unless earlier
terminated, the License Agreement will expire upon the expiration
of all royalty obligations. The royalty period will expire on a
country-by-country basis upon the later of (a) 12 years following
the date of first commercial sale of such product in such country,
(b) the expiration of all regulatory or data exclusivity in such
country for such product or (c) the date upon which the
manufacture, use, sale, offer for sale or importation of such
product in such country would no longer infringe, but for the
license granted in the License Agreement, a valid claim of a
licensed patent right.
The Company has the right to terminate the License Agreement for
convenience upon 90 days’ prior written notice. Pfizer may
not terminate the agreement for convenience. Either the Company or
Pfizer may terminate the License Agreement if the other party is in
material breach and such breach is not cured within the specified
cure period. In addition, either the Company or Pfizer may
terminate the License Agreement in the event of specified
insolvency events involving the other party.
The descriptions of the License Agreement and the Equity Grant
Agreement contained herein do not purport to be complete and are
qualified in their entirety by reference to the complete text of
the License Agreement, which will be filed as an exhibit to the
Company’s Quarterly Report on Form 10-Q for the quarter
ending June 30, 2021 and the Equity Grant Agreement, which is filed
as Exhibit 4.1 attached hereto.
Loan and Security Agreement
Also, on April 8, 2021, the Company entered into a loan and
security agreement (the “Loan Agreement”) with
Innovatus Life Sciences Lending Fund I, LP, a Delaware limited
partnership (“Innovatus”), as collateral agent and the
Lenders listed on Schedule 1.1 thereto, pursuant to which
Innovatus, as a Lender, has agreed to make certain term loans to
the Company in the aggregate principal amount of up to $25.0
million (the “Term Loans”).
Funding of the first $15.0 million tranche occured on April 8,2021. The Company will be eligible to draw on a second tranche of
$5.0 million upon achievement of certain milestones, including
meeting the primary end points of either the FACT-1 or FACT-2
clinical trials and receipt of unrestricted net cash proceeds of at
least $50.0 million from the issuance and sale of the
Company’s equity securities. The Company will be eligible to
draw on a third tranche of $5.0 million upon the achievement of
certain additional milestones, including commencement of certain
Phase 3 clinical trials and the receipt of unrestricted net cash
proceeds of at least $75.0 million from the issuance and sale of
the Company’s equity securities.
Innovatus has the right, at its election, after June 1, 2021 and
until the third anniversary of the Loan Agreement, to convert up to
20% of the outstanding principal amount of all Terms Loans made
under the Loan Agreement into shares of the Company’s common
stock at a price per share equal to the volume weighted average
closing price of the Company’s stock for the 5-trading day
period ending on the last trading day immediately preceding the
execution of the Loan Agreement (the “Conversion
Right”)
The Company is entitled to make interest-only payments for
thirty-six months, or up to forty-eight months if certain
conditions are met. The Term Loans will mature on the fifth
anniversary of the initial funding date and will bear interest at a
rate equal to sum of (a) the greater of (i) Prime Rate (as defined
in the Loan Agreement) or (ii) 3.25%, plus (b) 5.70%.
The Loan Agreement is secured by all assets of the Company.
Proceeds will be used for working capital purposes and to fund the
Company’s general business requirements. The Loan Agreement
contains customary representations and warranties and covenants,
subject to customary carve outs, and includes financial covenants
related to liquidity and trailing twelve months
revenue.
In connection with each funding of the Term Loans, the Company is
required to issue to Innovatus a warrant (the
“Warrants”) to purchase a number of shares of the
Company’s common stock equal to 2.5% of the principal amount
of the relevant Term Loan funded divided by the exercise price,
which will be based on the lower of (i) the volume weighted average
closing price of the Company’s stock for the 5-trading day
period ending on the last trading day immediately preceding the
execution of the Loan Agreement or (ii) the closing price on the
last trading day immediately preceding the execution of the Loan
Agreement. For the second and third tranches only the exercise
price will be based on the lower of (i) the exercise price for the
first tranche or (ii) the volume weighted average closing price of
the Company’s stock for the 5-trading day period ending on
the last trading day immediately preceding the relevant Term Loan
funding. The Warrants may be exercised on a cashless basis and are
exercisable through the 10thanniversary of the applicable funding
date. The number of shares of common stock for which each Warrant
is exercisable and the associated exercise price are subject to
certain proportional adjustments as set forth in such
Warrant.
The descriptions of the Loan Agreement and the Warrants contained
herein do not purport to be complete and are qualified in their
entirety by reference to the complete text of the Loan Agreement,
which will be filed as an exhibit to the Company’s Quarterly
Report on Form 10-Q for the quarter ending June 30, 2021 and the
form of Warrant filed as Exhibit 4.2 attached hereto.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above regarding the
issuance of equity to Pfizer under the License Agreement, the
Conversion Right, and the Warrants is incorporated herein by
reference. The issuance of shares of the Company’s common
stock pursuant to the License Agreement, the Conversion Right, and
the Warrants will be made in reliance on the exemption from
registration contained in Section 4(a)(2) of the Securities Act of
1933, as amended, and Rule 506 of Regulation D
thereunder.
Item 5.02
Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
In connection with the execution of the license agreement, each of
Brian Sullivan, our President and Chief Executive Officer, Lance
Laing, our Chief Science Officer, and Vicky Hahne, our Chief
Financial Officer, earned a milestone bonus under the
Company’smilestone-based incentive pay program, payable in
the form of stock options. These bonuses were consistent with the
previously disclosed executive bonus program, except for Ms.
Hahne’s bonus. She received a one-time increase to the stock
option that would otherwise be issued from a fair market value of
$51,000 to a fair market value of $71,000.
To reflect the addition of the License Agreement to the
Company’s business, the Company is providing supplements to
its Business Description and Risk Factors as presented in the
Annual Report on Form 10-K for the year ended December 31, 2020.
The supplemental business description is attached hereto as Exhibit
99.3 and the supplemental risk factors are attached hereto as
Exhibit 99.4, each of which is incorporated herein by
reference.
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.
