UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 04, 2022 |
Gelesis Holdings, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware |
001-39362 |
84-4730610 |
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(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
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501 Boylston Street Suite 6102 |
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Boston, Massachusetts |
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02116 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: 617 456-4718 |
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(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:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Common stock, par value $0.0001 per share |
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GLS |
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New York Stock Exchange |
Redeemable warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 |
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GLS WS |
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New York Stock Exchange |
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 ☒
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. ☐
Item 1.01 Entry into a Material Definitive Agreement.
CMS License Agreement Amendment and CMS Warrant
On August 4, 2022, Gelesis, Inc. (the “Subsidiary”), a subsidiary of Gelesis Holdings, Inc. ( “Gelesis”), entered into an Amendment (the “Amendment”) to the License, Collaboration and Supply Agreement, dated June 18, 2020 (the “Original Agreement”), by and between the Subsidiary and CMS Bridging DMCC, an affiliate of CMS Medical Venture Investment (HK) Limited (“CMS”) that governs the license of Gelesis intellectual property to CMS in Greater China (including Mainland China, Hong Kong, Macau, and Taiwan), Singapore and United Arab Emirates (collectively, the “CMS Territory”), and the supply of Plenity to CMS for sale in the CMS Territory. Pursuant to the Amendment, the one-time, non-refundable, and non-creditable regulatory approval milestone payment of $5.0 million provided for in the Original Agreement became immediately payable. In addition, the Amendment expands the CMS Territory to include Brunei, Myanmar, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Thailand and Vietnam and provides that the minimum annual royalty term for CMS territory will commence January 2024 (rather than January 2022, as previously provided under the Original Agreement) and extend through the expiration date of the amended agreement.
Upon execution of the Amendment, Gelesis issued to CMS a warrant (the “CMS Warrant”) to purchase up to 400,000 shares of common stock, par value $0.0001 per share, of Gelesis (the “Common Stock”) at an exercise price of $0.01 per share. The Warrant expires on the date that is ten years from the date of issuance (the “Expiration Date”) and is exercisable at any time from the date of issuance until the Expiration Date.
The CMS Warrant provides that, in connection with any Change of Control Transaction (as defined in the CMS Warrant) involving Gelesis, where the CMS Warrant has not been fully exercised prior to the consummation of such transaction, immediately prior to any such transaction, the CMS Warrant will be automatically exchanged into the right to receive (i) the consideration that would issuable, assuming all shares issuable upon exercise of the CMS Warrant were issued and outstanding immediately prior to the consummation of such transaction minus (ii) the change of control exercise price (as defined in the CMS Warrant) (such automatic exchange, the “Automatic Exercise Upon a Change of Control”).
Neither the CMS Warrant nor the shares of Common Stock potentially issuable upon exercise of the CMS Warrant have been or will be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, and on similar exemptions under applicable state laws.
The foregoing descriptions of the Amendment and the CMS Warrant do not purport to be complete and are qualified in their entirety by the full text of the Amendment and the CMS Warrant, copies of which are attached hereto as Exhibits 10.1 and 4.1 and are incorporated herein by reference.
Promissory Notes and Promissory Note Warrants
On August 4, 2022, Gelesis Holdings, Inc. (“Gelesis”) issued a promissory note in the aggregate principal amount of $5.0 million to existing investor, CMS Bridging DMCC, an affiliate of CMS Medical Venture Investment (HK) Limited (“CMS”), for the cash purchase price of $5.0 million.
As previously disclosed, Gelesis issued two promissory notes under the same terms on July 25, 2022 in the aggregate principal amount of $20.0 million to existing investors, PureTech Health LLC (“PureTech”) and SSD2 LLC (“SSD2”), for the cash purchase prices of $15.0 million and $5.0 million, respectively. The total aggregate principal amount issued under the CMS, PureTech and SSD2 (together the “Investors”) notes was $25.0 million (together the “Promissory Notes”).
Each of the Promissory Notes is unsecured and bears interest at a rate of 15% per annum. Each Promissory Note matures on the earlier of (a) December 31, 2023 or (b) five (5) business days following a Qualified Financing which, as defined in each Promissory Note includes: (a) any sale (or series of related sales) by Gelesis of (i) the common stock, par value $0.0001 per share (“Common Stock”) or preferred stock (“Preferred Stock”) of Gelesis, (ii) any equity securities conferring the right to purchase Common Stock or Preferred Stock or which are convertible into, or exchangeable for Common Stock or Preferred Stock (except any security granted, issued and/or sold by Gelesis to any director, officer, employee or consultant of Gelesis in such capacity for the primary purpose of retaining their services), or (iii) any debt securities convertible into, or exchangeable for, Common Stock or Preferred Stock, in each case, the aggregate proceeds of which equal or exceed $50.0 million less reasonable costs and expenses; or (b) the receipt by Gelesis of aggregate gross proceeds in any debt financing (or series of debt financings) equal to or exceeding $50.0 million, less reasonable costs and expenses. Gelesis may prepay each of the Promissory Notes, in whole or in part, at any time without penalty.
Each Promissory Note contains certain representations and warranties and covenants of Gelesis, and certain customary events of default including: (i) failure by Gelesis to pay amounts due thereunder (a “Payment Default”), (ii) material breach by Gelesis of any other term or provision of the Promissory Notes or of any representation or warranty by Gelesis (a “Material Breach Default”) and (iii) certain bankruptcy events (each, a “Bankruptcy Default”). If a Payment Default or Material Breach Default occurs and is continuing
under an Investor’s Promissory Note, such Investor may declare the unpaid principal and accrued interest due and payable. If a Bankruptcy Default occurs and is continuing under an Investor’s Promissory Note, unpaid principal and accrued interest with respect to such Promissory Note will become automatically due and payable immediately, without notice from or other action by the Investor.
Upon a Payment Default under any Promissory Note that has not been cured by the Company after five days, (x) the Company will be required to issue a warrant to the Investor holding such Promissory Note (a “Promissory Note Warrant”) to purchase, at an exercise price of $0.01 per share, subject to adjustment, an aggregate of number of shares of Common Stock equal to: (i) (A) 0.2 multiplied by (B) the amount of outstanding principal and accrued interest under such Promissory Note as of the date of conversion, divided by (ii) the volume weighted average price of the Common Stock, as reported by the New York Stock Exchange (the “NYSE”), for the five (5) trading days (the “Common Stock VWAP”) occurring immediately prior to the date of exercise and (y) such Investor may elect, at its option, to convert the outstanding principal and accrued interest under the Promissory Notes into a number of shares of Common Stock equal to (i) the amount of outstanding principal and accrued interest under the Promissory Note as of the date of conversion, divided by (ii) the lesser of the price per share of (A) the Common Stock, as reported by the NYSE or (B) the Common Stock VWAP as of the day prior to the date of such Investor’s conversion notice.
Each Promissory Note Warrant will expire on the date that is ten years from the date of issuance (the “Expiration Date”) and will be exercisable at any time from the date of issuance until the Expiration Date. Each Promissory Note Warrant also provides for an Automatic Exercise Upon a Change of Control.
The Company has agreed to include one or more proposals at its next annual or special meeting of stockholders to obtain any necessary shareholder approval pursuant to NYSE rules for the issuance of the Promissory Note Warrants, and the shares of Common Stock issuable upon exercise of such warrants, and the issuance of the shares of Common Stock issuable upon conversion of the Promissory Notes.
Neither the Promissory Notes, the Promissory Note Warrants, nor the shares of Common Stock potentially issuable upon conversion or exercise thereof, as applicable, have been or will be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, and on similar exemptions under applicable state laws.
The foregoing descriptions of the Promissory Notes and Promissory Note Warrants do not purport to be complete and are qualified in their entirety by the full text of the form of Promissory Note and form of Promissory Note Warrant, copies of which are attached hereto as Exhibits 4.2 and 4.3 and are incorporated herein by reference.
One S.r.l. Amended and Restated Warrant Purchase Agreement
On August 9, 2022, Gelesis Holdings, Inc. (“Gelesis”) entered into an Amended and Restated Warrant Purchase Agreement (the “Amended and Restated Agreement”) with certain One S.r.l. warrantholders, which amends and restates the Warrant Purchase Agreement dated October 21, 2020 (the “Original Warrant Agreement”), by and between Gelesis, Inc. (the “Subsidiary”) and the One S.r.l. warrantholders. Pursuant to the Amended and Restated Agreement, Gelesis deferred payment of the aggregate remaining purchase price under the patent license and assignment agreement and master agreement between the Company and One S.r.l., totaling €2.5 million (which the Subsidiary owes to the One S.r.l. warrantholders), until March 31, 2023.
Pursuant to the Amended and Restated Agreement, and in consideration for the deferral, Gelesis amended the exercise price of the One S.r.l. warrantholders' 1,353,062 previously issued common stock warrants from $4.26 to $1.45.
The foregoing description of the Amended and Restated Agreement does not purport to be complete and is qualified in its entirety by the full text of the form of the Amended and Restated Agreement, a copy of which is attached hereto as Exhibit 4.4 and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided under Item 1.01 of this Current Report on Form 8-K with respect to the issuance of the Promissory Note is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information provided under Item 1.01 of this Current Report on Form 8-K with respect to the issuance of the CMS Warrant, the Promissory Notes, the Promissory Note Warrants and the Amended and Restated Agreement is incorporated by reference into this Item 3.02.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The exhibits listed in the following Exhibit Index are filed as part of this Current Report On Form 8-K.
Exhibit Number |
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Description |
4.1 |
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4.2 |
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4.3 |
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Form of Warrant to Purchase Common Stock of Gelesis Holdings, Inc. |
4.4 |
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10.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 thereunto duly authorized.
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GELESIS HOLDINGS, INC. |
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Date: |
August 10, 2022 |
By: |
/s/ Elliot Maltz |
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Elliot Maltz |
Exhibit 4.1
_______, ____
WARRANT TO PURCHASE COMMON STOCK
OF
GELESIS HOLDINGS INC.
THIS WARRANT AND THE UNDERLYING SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES AND (2) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
Gelesis Holdings Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received in connection with an amendment dated as of August 4th, 2022, to that License, Collaboration and Supply Agreement dated June 18, 2020, by and between Gelesis, Inc., a subsidiary of the Company, and CMS Bridging DMCC, an affiliate of CMS Medical Venture Investment (HK) Limited (the “Holder”), the Holder is entitled, subject to the terms and conditions set forth in this warrant (this “Warrant”), to purchase from the Company, at any time on or after the date hereof and on or prior to the Expiration Date (as defined below), the Warrant Shares at a price per share equal to the Exercise Price.
ACTIVE/117883901.2
ACTIVE/117883901.2
then, in each such case, the Company will mail to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend or distribution, and (ii) the date on which any such Corporate Transaction, dissolution, liquidation or winding- up is to take place, and the time, if any is to be fixed, as of which the holders of record of Warrant Stock shall be entitled to exchange their shares for securities or other property (including, without limitation, cash) deliverable on such Corporate Transaction, dissolution, liquidation or winding-up.
“Business Day” means a day (i) other than Saturday or Sunday, and (ii) on which commercial banks are open for business in Boston, Massachusetts.
“Change of Control Transaction” means a sale, lease, exchange, exclusive license, transfer or other disposition of all or substantially all of the Property, assets, or business of the Company, or a merger or consolidation with or into any other entity or other business transaction or series of transactions: (i) that yields a Gross Consideration greater than the aggregate Exercise Price (as appropriately adjusted for any stock splits, stock dividends, recapitalizations and similar transactions after the date hereof and as reflected in the applicable Change of Control Transaction definitive agreement and related documentation) and (ii) as a result of which the stockholders of the Company immediately prior to such transaction would hold less than a majority of the voting equity interests of the Company (or its successor, as applicable) after such transaction.
“Change of Control Exercise Price” means a price per share equal to the Exercise Price in cash; provided, however, in the event that the Change of Control Transaction includes any non-cash consideration to be paid in respect of the capital stock of the Company, then the Change of Control Exercise Price shall be a price per share equal to the Exercise Price in the form of each type of consideration to be paid in respect of the Warrant Shares (assuming for this purpose that the Warrant Shares are issued and outstanding as of immediately prior to the consummation of such Change of Control Transaction), allocated on a pro rata basis based on the allocation of each
ACTIVE/117883901.2
type of consideration that is payable with respect to a share of Common Stock pursuant to such Change of Control Transaction. In connection therewith, each non-cash type of consideration will be valued at the same value as such type of non-cash consideration is valued pursuant to the definitive agreements related to such Change of Control Transaction, or, in the absence of such value being set forth in such definitive agreements, as determined in good faith and approved by the Board of Directors of the Company.
“Common Stock” means the common stock of the Company, par value $0.0001 per share.
“Exercise Price” means $0.01 per share of Common Stock.
“Expiration Date” means 5:00 p.m. eastern time on the date that is 10 years from the date hereof, without prejudice to the regime applicable in case of Change of Control Transaction and Automatic Exchange under Section 1.3.
“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any central bank, stock exchange, regulatory body, arbitrator, public sector entity and any self-regulatory organization.
“Gross Consideration” means the gross amount and form of consideration on a per share basis that would be received in respect of each share of Common Stock as reflected in the applicable Change of Control Transaction definitive agreement and related documentation assuming that all Warrant Shares were issued and outstanding as of immediately prior to the consummation of such Change of Control Transaction.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.
“Securities Act” means the Securities Act of 1933, as amended.
“Warrant Shares” means 400,000 shares of Common Stock.
ACTIVE/117883901.2
ACTIVE/117883901.2
[Signature Page Follows]
ACTIVE/117883901.2
IN WITNESS WHEREOF, the parties have caused this Warrant to be executed as of the date first written above.
“Company”
Gelesis Holdings, Inc.
By:
Name:
Title:
Address:
501 Boylston Street, Suite 6102
Boston, MA 02216
“Holder”
CMS Medical Venture Investment (HK) Limited
By:
Name:
Title:
Address:
[Address 1]
[Address 2]
ACTIVE/117883901.2
EXHIBIT A
Notice of Exercise
TO: Gelesis Holdings Inc.
The undersigned hereby elects to purchase the Warrant Shares (as defined in that certain Warrant, dated as of ______, 2022, issued by Gelesis Holdings Inc., a Delaware corporation (the “Company”), to the undersigned), and tenders herewith payment of the Warrant Price in full.
(Date)
(Signature)
(Print Name)
(Address)
ACTIVE/117883901.2
Exhibit 4.2
THIS SHORT TERM PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS NOTE MAY NOT BE SOLD, TRANSFERRED, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.
SHORT TERM PROMISSORY NOTE
Boston, Massachusetts
July__, 2022
FOR VALUE RECEIVED, unless converted pursuant to Section 5(y) hereof, Gelesis Holdings Inc., a Delaware corporation (the “Company”), promises to pay to [______] (together with its successors and permitted assigns who become holders of this Note, the “Holder”) with a principal address listed on the signature page hereto, the principal investment amount listed on the signature page hereto, and to pay interest on the outstanding principal balance of this Note in accordance with Section 3 hereof.
1
If a Default pursuant to Sections 5(a) and 5(b) occurs and is continuing, the Holder, by written notice to the Company, may declare due and payable the unpaid principal balance and all accrued interest on this Note. Upon the occurrence of a Default pursuant to Section 5(c), the unpaid principal balance and all interest accrued thereon shall automatically be due and payable immediately, without notice from or other action by the Holder. If a Default with respect to this Note occurs and is continuing, the Holder may pursue any available remedy by proceeding at law or in equity to collect any amounts due with respect to this Note or to enforce the performance of any provision of this Note.
The Holder shall have all rights and remedies available to it upon any Default and all amounts past due shall continue to accrue interest at the interest rate applicable to this Note until the earlier of conversion pursuant to Section 5(y) or the time at which all obligations under this Note are paid in full. Upon the occurrence of a Default pursuant to Section 5(a) that has not been cured by the Company within five (5) days after such Default:
(x) the Company agrees to immediately issue, or to the extent the Stockholders’ Approval pursuant to Section 6 has not yet been obtained, to issue immediately upon receipt of the Stockholders’ Approval, a warrant (the “Warrant”) for the purchase of Common Stock in form attached hereto as Exhibit A (the “Warrant Agreement”), which shall entitle the Holder to purchase at an exercise price per share of $0.01 a number of shares of Common Stock equal to (i) (A) 0.2 multiplied by (B) the amount of outstanding principal and accrued interest under this Note as of the date of conversion pursuant to Section 5(y) hereof, divided by (ii) the volume weighted average price of each share of Common Stock, as reported by the New York Stock Exchange, for the last
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five (5) trading days (as of any applicable measurement date, the “Common Stock VWAP”) occurring immediately prior to the date of exercise; and
(y) the Holder may elect, at its option, by written notice to the Company (a “Conversion Notice”), to convert the amount of outstanding principal and accrued interest under this Note into a number of shares of Common Stock (the “Conversion Securities”) equal to (i) the amount of outstanding principal and accrued interest under this Note as of the date of such conversion, divided by (ii) the lesser of the price per share of (A) the Common Stock, as reported by the New York Stock Exchange, as of 4:00 P.M. Eastern Time on the date of the Conversion Notice or (B) the Common Stock VWAP as of the day prior to the date of the Conversion Notice.
As promptly as practicable after the conversion of this Note, the Company at its expense shall issue and deliver to the Holder, upon surrender of the Note, a certificate or certificates for the number of full Conversion Securities issuable upon such conversion.
Notwithstanding anything in this Note to the contrary, the Holders’ right to convert this Note and receive the Conversion Securities shall be subject to the Company obtaining the Stockholders’ Approval.
The Company shall reserve and keep available out of its authorized but unissued Common Stock such number of shares issuable as Conversion Securities and such number of Warrant Shares (as defined in the Warrant Agreement) upon the full exercise of the Warrant. During the term of this Note, the Company shall not take any action which would cause the number of authorized but unissued Common Stock to be less than the number of such shares required to be reserved hereunder for issuance as Conversion Securities and upon full exercise of the Warrant.
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[Signatures Appear on the Next Page]
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IN WITNESS WHEREOF, the Company and the Holder have executed this Short Term Promissory Note as of the date first above written.
GELESIS HOLDINGS INC.
By:
Name: Yishai Zohar
Title: Chief Executive Officer
TO BE COMPLETED BY HOLDER:
Print Name of Holder:
Print Address of Holder:
Amount of Investment: $
Signature of Investor: By:
Name:
Title:
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Exhibit A
Form of Warrant
8
Exhibit 4.3
_______, ____
WARRANT TO PURCHASE COMMON STOCK
OF
GELESIS HOLDINGS INC.
THIS WARRANT AND THE UNDERLYING SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES AND (2) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
Gelesis Holdings Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received and in accordance with that certain Short Term Promissory Note, dated as of June __, 2022, by and between the Company and [__________] (the “Holder”), the Holder is entitled, subject to the terms and conditions set forth in this warrant (this “Warrant”), to purchase from the Company, at any time on or after the date hereof and on or prior to the Expiration Date (as defined below), the Warrant Shares at a price per share equal to the Exercise Price.
This Warrant is one in a series of such Warrants that may be issued by the Company on substantially the same terms prior to, on or following the date hereof, pursuant to a series of Short Term Promissory Notes issued by the Company on or about June __, 2022 (the “Notes”). The holders of the Notes representing at least eighty-five percent (85%) of the then outstanding principal amount of all Notes are referred to herein as the “Majority Holders”.
then, in each such case, the Company will mail to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend or distribution, and (ii) the date on which any such Corporate Transaction, dissolution, liquidation or winding- up is to take place, and the time, if any is to be fixed, as of which the holders of record of Warrant Stock shall be entitled to exchange their shares for securities or other property (including, without limitation, cash) deliverable on such Corporate Transaction, dissolution, liquidation or winding-up.
“Business Day” means a day (i) other than Saturday or Sunday, and (ii) on which commercial banks are open for business in New York, New York.
“Change of Control Transaction” means a sale, lease, exchange, exclusive license, transfer or other disposition of all or substantially all of the Property, assets, or business of the Company, or a merger or consolidation with or into any other entity or other business transaction or series of transactions: (i) that yields a Gross Consideration greater than the aggregate Exercise Price (as appropriately adjusted for any stock splits, stock dividends, recapitalizations and similar transactions after the date hereof and as reflected in the applicable Change of Control Transaction definitive agreement and related documentation) and (ii) as a result of which the stockholders of the Company immediately prior to such transaction would hold less than a majority of the voting equity interests of the Company (or its successor, as applicable) after such transaction.
“Change of Control Exercise Price” means a price per share equal to the Exercise Price in cash; provided, however, in the event that the Change of Control Transaction includes any
non-cash consideration to be paid in respect of the capital stock of the Company, then the Change of Control Exercise Price shall be a price per share equal to the Exercise Price in the form of each type of consideration to be paid in respect of the Warrant Shares (assuming for this purpose that the Warrant Shares are issued and outstanding as of immediately prior to the consummation of such Change of Control Transaction), allocated on a pro rata basis based on the allocation of each type of consideration that is payable with respect to a share of Common Stock pursuant to such Change of Control Transaction. In connection therewith, each non-cash type of consideration will be valued at the same value as such type of non-cash consideration is valued pursuant to the definitive agreements related to such Change of Control Transaction, or, in the absence of such value being set forth in such definitive agreements, as determined in good faith and approved by the Board of Directors of the Company.
“Common Stock” means the common stock of the Company, par value $0.0001 per share.
“Exercise Price” means $0.01 per share of Common Stock, as may be adjusted as set forth herein.
“Expiration Date” means 5:00 p.m. eastern time on the date that is 10 years from the date hereof, without prejudice to the regime applicable in case of Change of Control Transaction and Automatic Exchange under Section 1.3.
“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any central bank, stock exchange, regulatory body, arbitrator, public sector entity and any self-regulatory organization.
“Gross Consideration” means the gross amount and form of consideration on a per share basis that would be received in respect of each share of Common Stock as reflected in the applicable Change of Control Transaction definitive agreement and related documentation assuming that all Warrant Shares were issued and outstanding as of immediately prior to the consummation of such Change of Control Transaction.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.
“Securities Act” means the Securities Act of 1933, as amended.
“Warrant Shares” means a number of shares of Common Stock equal to (a) (i) 0.2 multiplied by (ii) the amount of outstanding principal and interest under the Note as of the date of conversion to Common Stock pursuant to Section 5(y) thereof, divided by (b) the volume weighted average price of each share of the Common Stock, as reported by the New York Stock Exchange, for the last five (5) trading days occurring immediately prior to the Exercise Date.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have caused this Warrant to be executed as of the date first written above.
“Company”
Gelesis Holdings, Inc.
By:
Name:
Title:
Address:
501 Boylston Street, Suite 6102
Boston, MA 02216
“Holder”
[_________________________________]
By:
Name:
Title:
Address:
[Address 1]
[Address 2]
EXHIBIT A
Notice of Exercise
TO: Gelesis Holdings Inc.
The undersigned hereby elects to purchase the Warrant Shares (as defined in that certain Warrant, dated as of ______, 2022, issued by Gelesis Holdings Inc., a Delaware corporation (the “Company”), to the undersigned), and tenders herewith payment of the Warrant Price in full.
(Date)
(Signature)
(Print Name)
(Address)
Exhibit 4.4
AMENDED AND RESTATED
WARRANT TO PURCHASE COMMON STOCK
OF
GELESIS HOLDINGS, INC.
This Amended and Restated Warrant to Purchase Common Stock (this “Warrant”) is made as of August [__], 2022 by and between [HOLDER] (“Holder”), and Gelesis Holdings, Inc., a Delaware corporation (“Company”).
RECITALS
A. In connection with the entry into that certain Warrant Purchase Agreement, by and among the Holder and Gelesis, Inc., a Delaware corporation (the “Prior Issuer”), dated as of October 21, 2020 (the “Warrant Purchase Agreement”), the Holder and Prior Issuer executed a Warrant to Purchase Common Stock, dated October 21, 2020 (the “Original Warrant”).
B. On January 13, 2022, in connection with the DeSPAC transaction of the Prior Issuer, and pursuant to that certain Business Combination Agreement, dated as of July 19, 2021, by and among the Prior Issuer, Capstar Special Purpose Acquisition Corp., a Delaware corporation, and CPSR Gelesis Merger Sub, Inc., a Delaware corporation (as amended, the “Business Combination Agreement”) the Prior Issuer became a wholly-owned subsidiary of the Company, a publicly traded corporation listed on the New York Stock Exchange.
C. Pursuant to the terms of the Business Combination Agreement, the Original Warrant was cancelled in exchange for a warrant to purchase [_____] shares of the Common Stock of the Company at an exercise price of $4.26 (the “Rollover Warrant”), which such Rollover Warrant was reflected on the books and records of the Company and of the Company’s transfer agent, Continental Stock and Transfer Company.
D. The Holder and the Company desire to amend and restate the Rollover Warrant in its entirety to modify the Warrant Price, it being understood that the execution of the Business Combination Agreement constitutes a Corporate Transaction for the purpose of both the Original Warrant and the Rollover Warrant, including the Transaction Notice connected thereto.
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then, in each such case, the Company will mail to the Holder a notice (such notice, a “Transaction Notice”) specifying (i) the date on which any such record is to be taken for the purpose of such dividend or distribution, and (ii) the date on which any such Corporate Transaction, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Warrant Stock shall be entitled to exchange their shares for securities or other property (including, without limitation, cash) deliverable on such Corporate Transaction, dissolution, liquidation or winding-up.
“Business Day” means a day (i) other than Saturday or Sunday, and (ii) on which commercial banks are open for business in Boston, Massachusetts.
“Change of Control Transaction” means a sale, lease, exchange, exclusive license, transfer or other disposition of all or substantially all of the Property, assets, or business of the Company, or a merger or consolidation with or into any other entity or other business transaction or series of transactions: (i) that yields a Gross Consideration greater than the Warrant Price (as appropriately adjusted for any stock splits, stock dividends, recapitalizations and similar transactions after the date hereof and as reflected in the applicable Change of Control Transaction definitive agreement and related documentation) and (ii) as a result of which the stockholders of the Company immediately prior to such transaction would hold less than a majority of the voting equity interests of the Company (or its successor, as applicable) after such transaction.
“Change of Control Warrant Price” means a price per share equal to the Warrant Price in cash; provided, however, in the event that the Change of Control Transaction includes any non-cash consideration to be paid in respect of the capital stock of the Company, then the Change of Control Warrant Price shall be a price per share equal to the Warrant Price in the form of each type of consideration to be paid in respect of the Warrant Shares (assuming for this purpose that the Warrant Shares are issued and outstanding as of immediately prior to the consummation of such Change of Control Transaction), allocated on a pro rata basis based on the allocation of each type of consideration that is payable with respect to a share of Warrant Stock pursuant to such Change of Control Transaction. In connection therewith, each non-cash type of consideration will be valued at the same value as such type of non-cash consideration is valued pursuant to the definitive agreements related to such Change of Control Transaction, or, in the absence of such value being set forth in such definitive agreements, as determined in good faith and approved by the Board of Directors of the Company.
“Common Stock” means the Common Stock of the Company, par value $0.0001 per share.
“Expiration Date” means 5:00 p.m. eastern time on October 21, 2030 without prejudice to the regime applicable in case of Change of Control Transaction and Automatic Exchange under Paragraph 1.3.
“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any central bank, stock exchange, regulatory body, arbitrator, public sector entity and any self-regulatory organization.
“Gross Consideration” means the gross amount and form of consideration on a per share basis that would be received in respect of each share of Warrant Stock as reflected in the applicable Change of
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Control Transaction definitive agreement and related documentation assuming that all Warrant Shares were issued and outstanding as of immediately prior to the consummation of such Change of Control Transaction.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.
“Securities Act” means the Securities Act of 1933, as amended.
“Warrant Price” means $1.45 per share of Common Stock.
“Warrant Shares” means [______] shares of Warrant Stock.
“Warrant Stock” means the Common Stock.
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5
[Signature Page Follows]
6
IN WITNESS WHEREOF, the parties have caused this Warrant to be executed as of the date first written above.
“Company”
Gelesis Holdings, Inc.
By:
Name: Yishai Zohar
Title: Chief Executive Officer
Address:
501 Boylston Street, Suite 6102
Boston, MA 02216
“Holder”
[ ]
Address:
[ ]
EXHIBIT A
Notice of Exercise
TO: Gelesis Holdings, Inc.
The undersigned hereby elects to purchase the Warrant Shares (as defined in that certain Warrant, dated as of [●], 2022, issued by Gelesis Holdings, Inc., a Delaware corporation (the “Company”), to the undersigned), and tenders herewith payment of the Warrant Price in full.
(Date)
(Signature)
(Print Name)
(Address)
8
Exhibit 10.1
AMENDMENT
This Amendment is made on 4 August 2022 (the “Amendment Effective Date”) between:
(1) GELESIS INC., a company organized and existing under the laws of the State of Delaware, having its principal office at 501 Boylston Street, Suite 6102, Boston, MA 02116, USA (“Licensor”); and
(2) CMS Bridging DMCC, a company incorporated under law of the UAE (Registration No.: DMCC177608) and having its registered/principal office at Unit No: 205, JBC1, Plot No: JLT-PH1-G2A, Jumeirah Lakes Towers, Dubai, UAE (“Licensee”);
The Licensor and Licensee shall be referred to herein individually as a “Party” and collectively as the “Parties”.
WITNESSETH
WHEREAS, the Licensor and Licensee are parties to the LICENSE, COLLABORATION AND SUPPLY AGREEMENT dated 18 June 2020 (hereafter the “License Agreement”).
WHEREAS the parties have agreed to amend the License Agreement, as detailed below,
NOW, THEREFORE, the parties hereby agree as follows:
1. Extent of the present Amendment
This Amendment is an integral part of the Lincense Agreement. It is understood that the terms and conditions of the License Agreement (as amended and supplemented) shall remain fully enforceable except where directly and expressly modified by this Amendment.
2. Amendment to clause 1.53 of the License Agreement: the Parties have agreed to amend the last paragraph of clause 1.53 of the License Agreement and replace it with the following:
“Market” means for the purpose of this Agreement, each of United Arab Emirates, Singapore, Brunei, Myanmar, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Thailand and Vietnam, Mainland China, the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan; provided that Licensor has the exclusive option until 31 December 2023 to remove Malaysia from the definition of Market through exclusive licensing to a Third Party in exchange for one-half of any upfront payment received from such Third Party licensee.
3. Amendment to clause 1.57 of the License Agreement: the Parties have agreed to amend the last paragraph of clause 1.57 of the License Agreement and replace it with the following:
Net Sales shall not include transfers or dispositions of Products for no consideration for promotional, charitable, pre-clinical, clinical or regulatory purposes; provided that, subject to Sections 4.6 and 5.4, the total amount of transfers or dispositions shall not exceed the following percentage of the amount of total orders received for the applicable Calendar Year: thirty-five percent (35%) for the Calendar Year of 2024 (or the first year following the approval of the Marketing Authorization Application of the Product by NMPA, whichever is later), twenty-five percent (25%) for the Calendar Year of 2025 (or the second year following the approval of the Marketing Authorization Application of the Product by NMPA, whichever is later), ten percent (10%) for the Calendar Year of 2026 (or the third year following the approval of the Marketing Authorization Application of the Product by NMPA, whichever is later), and three percent (3%) for each Calendar Year thereafter. The transfer or sale of Product among Licensee and Designated Parties shall not be considered a sale unless the purchaser is a Third Party distributor or End Customer. Upon the sale or other disposal of Product other than in a transaction generating revenues from or based on a sales price for the Product which sales price is either customary or would be reasonably expected in the Territory for arm’s length transactions, such sale, disposal or use shall be deemed to constitute a sale with the consideration for the sale being the consideration for the relevant transaction and constituting Net Sales hereunder, and if the consideration is not a monetary amount or is less than fair market value, a sale shall be deemed to have occurred at the average Net Sales price charged to Third Parties in arm’s length transactions for cash sales in such Market during the applicable reporting period (or if there were only de minimis cash sales in such Market, at the fair market value as determined by Licensor in good faith based on pricing in comparable markets). Unless otherwise specified herein, Net Sales will be calculated in accordance with GAAP generally and consistently applied.
4. Amendment to clause 1.72 of the License Agreement: the Parties have agreed to amend the clause 1.72 of the License Agreement and replace it with the following:
“Territory” shall mean Singapore, Brunei, Myanmar, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Thailand and Vietnam, Greater China including Mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan, United Arab Emirates; provided that Licensor has the exclusive option until 31 December 2023 to remove Malaysia from the definition of Territory through exclusive licensing to a Third Party in exchange for one-half of any upfront payment received from such Third Party licensee as set forth in section 1.53 above.
5. Adding clause 5.7 to the License Agreement: the Parties have agreed to add clause 5.7 the License Agreement as follows:
5.7 Licensor Regulatory Efforts.
Licensor agrees to make efforts to improve the collaboration with Licensee for expediting the regulatory approvals and other operational activities to support launching the Product in the Territory.
6. Amendment to clause 6.2(b) of the License Agreement: the Parties have agreed to amend the clause 6.2(b) of the License Agreement and replace it with the following:
(b) limiting the generality of the foregoing, Licensee shall comply with the Minimum Annual Royalty Commitment as set forth below for the period commencing on the later of (i) January 1, 2024 or (ii) the first (1st) anniversary date of obtaining the approval of the Marketing Authorization Application of the Product by NMPA and ending on the expiration date of this Agreement (“Minimum Annual Royalty Term”); provided that both Parties shall renegotiate in good faith to reasonably adjust the applicable Minimum Annual Royalty rate if any Material Adverse Event on the Commercialization of Product occurs after the expiration of the last valid claim of patents covering the Products in the Territory. Both Parties shall, within thirty (30) days after the end of any Calendar Year during the Minimum Annual Royalty Term, confirm and reconcile the total annual royalty payment paid or payable to Licensor based on the actual annual Net Sales of the Product (“Actual Annual Royalty”) and compare it against the Minimum Annual Royalty Commitment of such Calendar Year (being a “Surplus” in case of a positive balance and a “Deficit” in case of a negative figure). A Surplus of any Calendar Year may be carried forward (and used) to cover the Deficit occurred in the following (and preceding) two (2) Calendar Year until the amount of the Surplus of such Calendar Year is exhausted in so doing. If there turns out to be a Deficit in any given Calendar Year, then (i) Licensee may first avail itself of the available Surplus attributed to the Calendar Year before the immediately preceding Calendar Year (if any) to cover such Deficit (until such Surplus is fully reduced to zero); and (ii) if the available Surplus attributed to the Calendar Year before the immediately preceding Calendar Year is insufficient to cover such Deficit or the Calendar Year before the immediately preceding Calendar Year is a year of Deficit, then Licensee may further avail itself of the Surplus attributed to the immediately preceding Calendar Year to cover such Deficit. If the Deficit for a Calendar Year is not fully offset to zero through the steps as mentioned above in the (i) and (ii), then the Licensee shall further avail itself of the available Surplus attributed to the immediately subsequent Calendar Year and the year after the immediately subsequent Calendar Year, only after License has exhausted all the said steps and Deficit for a Calendar Year is still not fully offset to zero, then the balance amount of Deficit is a “Loss”. If there has been a Loss for two (2) consecutive Calendar Years during the Minimum Annual Royalty Term and Licensee fails to make up the Loss within thirty (30) Business Days upon receipt of a notice from Licensor to cure such breach, then Licensor will have a right to terminate this Agreement in whole.
Territory |
Minimum Annual Royalty Commitment (Assuming Marketing Authorization Application approval by NMPA on 1 January 2024) |
Taking all Markets into account
|
2024: USD 0.5 Million |
2025: USD 1.5 Million |
|
2026: USD 3 Million |
|
2027 and each Calendar Year thereafter: USD 2.5 Million |
[Examples for Reference]
Calendar Year |
Actual Annual Royalty |
MARC |
Deficit |
Surplus of the Year |
Surplus Balance |
Loss |
2024 |
3M |
0.5M |
/ |
2.5M |
+2.5M |
/ |
2025 |
2.5M |
1.5M |
/ |
1M |
3.5M (2024 Surplus plus 1M Surplus from 2025) |
/ |
2026 |
5M |
3M |
/ |
2M |
5.5M
|
0 |
2027 |
8M |
2.5M |
/ |
5.5M |
+8.5M (2024 Surplus expires as it was not used, 2025 and 2026 Surplus is credited to the Surplus Balance |
/ |
2028 |
5M |
2.5M |
|
2.5 |
10M (first look backward to 2025, unused Surplus expires, then 7.5M Surplus from 2026 and 2027; the 2M 2.5M Surplus from 2028 is credited against the Surplus Balance to result in a net Surplus of 8M) |
/ |
2029 |
5M |
2.5M |
|
2.5M |
10.5 (first look backward to 2027,then add surplus in 2028 and 2029) |
/ |
|
Notwithstanding the foregoing, if the Marketing Authorization Application of the Product is approved by NMPA before or after 1 January 2024, the first Calendar Year for Minimum Annual Royalty Commitment shall be a period of twelve (12) months commence on the first (1st) anniversary date of obtaining the aforesaid Marketing Authorization. For avoidance of doubt, if the date of obtaining the approval of the Marketing Authorization Application of the Product by NMPA is earlier or later than 1 January 2024, the first and subsequent Calendar Year for Minimum Annual Royalty Commitment during the Minimum Annual Royalty Term shall be successive a period of twelve (12) months each, provided that the last period of Minimum Annual Royalty Commitment shall be calculated on a pro rata basis, as applicable.
7. Amendment to clause 8.3(a) of the License Agreement: the Parties have agreed to amend the clause 8.3(a) of the License Agreement and replace it with the following:
(a) Regulatory Approval Milestone Payments. Licensee shall pay to Licensor the one-time, non-refundable, and non-creditable regulatory milestone payment of USD five (5) million within fifteen (15) Business Days upon receiving the relevant invoice from Licensor after the Amendment Effective Date. Licensee will promptly notify Licensor of the approval of the Marketing Authorization Application of the Product by NMPA.
8. Adding clause 8.10 to the License Agreement: the Parties have agreed to add clause 8.10 the License Agreement as follows:
8.10 Warrant, Governance.
Licensor agrees to engage with Gelesis Holdings Inc. to issue a warrant to Licensee and/or its affiliate for the purchase of common stock of Gelesis Holdings Inc., through execution of a warrant agreement in a form reasonably acceptable to both Parties within ten (10) days following execution of this Amendment, which shall entitle the Licensee and/or its affiliate to purchase Four Hundred Thousand (400,000) shares of common stock of Gelesis Holdings Inc.at an exercise price per share of $0.01. Licensor agrees to engage with Gelesis Holdings Inc. to facilitate James Stearns’s appointment to become a member of the Gelesis Holdings Inc. Board, instead of an observer. Licensee understands and acknowledges that Gelesis Holdings Inc. is a U.S. company listed on the New York Stock Exchange and that therefore Gelesis Holdings Inc. may not be able to finalize this request until its next shareholder meeting, and the appointment may ultimately be subject to shareholder approval which may or may not be achieved.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the Amendment Effective Date.
(Remainder of Page Blank, Signature Pages Follow)
—————————Signatory Page of Amendment ———————————
Gelesis Inc. |
Signature: _________________________ |
Name: Yishai Zohar |
Title: Chief Executive Officer |
—————————Signatory Page of Amendment ———————————
CMS Bridging DMCC |
Signature: _________________________ |
Name: Dr. Huaizheng Peng |
Title: Director |