Item 1.01 Entry into a Material Definitive Agreement.
On February 9, 2023, Revelation Biosciences, Inc., (the “Company”), entered into a placement agency agreement (the “Placement Agency Agreement”) with Roth Capital Partners, LLC (the “Placement Agent”) and a securities purchase agreement (the “Purchase Agreement”) with certain purchasers for the purchase and sale, in a registered public offering by the Company (the “Public Offering”), of (i) an aggregate of 2,888,600 shares of its common stock, par value $0.001 per share (“Common Stock”) and pre-funded warrants to purchase up to an aggregate of 336,400 shares of Common Stock (the “Pre-Funded Warrants”) and (ii) accompanying Class C Common Stock Purchase Warrants to purchase up to an aggregate of 6,450,000 shares of its Common Stock (the “Common Warrants”) at a combined offering price of $4.83 per share of Common Stock and associated Common Warrant, or $4.8299 per Pre-Funded Warrant and associated Common Warrant, resulting in gross proceeds of approximately $15.6 million. The Public Offering closed on February 13, 2023.
The Common Warrants have an exercise price of $5.36 per share, are exercisable upon issuance, and will expire five years following the date of issuance. The exercise price is separately subject to reduction in the event of certain future dilutive issuances of shares of Common Stock by the Company, including pursuant to common stock equivalents and convertible or derivative securities. The Pre-Funded Warrants do not expire and have an exercise price of $0.0001 per share. In addition, a holder of Common Warrants may also effect an “alternative cashless exercise” on or after the earlier of (i) the thirty-day anniversary of the date of the Purchase Agreement and (ii) the date on which the aggregate composite trading volume of our common stock as reported by Bloomberg L.P. beginning at the time of execution of the Purchase agreement exceeds 15,000,000 shares. In such event, the aggregate number of shares of common stock issuable in such alternative cashless exercise shall equal the product of (x) the aggregate number of shares of common stock that would be issuable upon a cash exercise and (y) 0.4. The Pre-Funded Warrants were sold to purchasers whose purchase of shares of Common Stock in the Public Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of the Company’s outstanding Common Stock immediately following the consummation of the Public Offering, in lieu of shares of Common Stock.
Each of the Placement Agency Agreement and Purchase Agreement contains representations, warranties and covenants made by the Company that are customary for transactions of this type. In addition, pursuant to the terms of the Purchase Agreement, the Company and its executive officers and directors have agreed not to, subject to limited exceptions, offer, sell, transfer or otherwise dispose of the Company’s securities for a period of 90 days following the date of closing for the Public Offering set forth above. Each institutional investor who is party to the Purchase Agreement also agreed to a leak-out arrangement wherein each such investor (together with certain of its affiliates) will not transfer on any trading day until April 10, 2023, shares of Common Stock, or shares of Common Stock underlying Common Stock equivalents held by such investor on, or acquired by such investor following, the date of closing for the Public Offering set forth above, in an amount more than its pro rata portion of 25% of the composite trading volume of the Common Stock, subject to certain exceptions.
On February 13, 2023, the Company also entered into a warrant agency agreement (the “Warrant Agency Agreement”) with the Company’s transfer agent, Continental Stock Transfer & Trust Co., who will act as warrant agent for the Company, setting forth the terms and conditions of the Common Warrants.
As compensation in connection with the Public Offering, the Company paid the Placement Agent a cash fee of 8% of the aggregate gross proceeds raised in the Public Offering, plus reimbursement of certain expenses and legal fees.
The Common Stock, Pre-Funded Warrants and Common Warrants described above were offered pursuant to the Registration Statement on Form S-1 (File No. 333-268576), as amended, that was declared effective by the Securities and Exchange Commission (the “Commission”) on February 9, 2023, and the Registration Statement filed pursuant to Rule 462(b) (File No. 333-269655) with the Commission on February 9, 2023.
The foregoing descriptions of the Placement Agency Agreement, the Purchase Agreement, the Warrant Agency Agreement, the Pre-Funded Warrants and the Common Warrants do not purport to be complete and are subject to, and qualified by, the full text of such documents, copies of which are filed as Exhibits 10.1, 10.2, 4.1, 4.2 and 4.3, respectively, and incorporated by reference herein. The Placement Agency Agreement and Purchase Agreement are attached hereto as exhibits to provide interested persons with information regarding their terms, but are not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Placement Agency Agreement and Purchase Agreement were made only for purposes of such agreements as of specific dates indicated therein, were solely for the benefit of the parties thereto, and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of such agreements.