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

 

July 25, 2019

Date of report (Date of earliest event reported)

 

 

Axsome Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

001-37635

 

45-4241907

(State or other jurisdiction
of incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

200 Broadway, 3rd Floor
New York, New York
(Address of principal executive offices)

 

10038

(Zip Code)

 

Registrant’s telephone number, including area code (212) 332-3241

 

 

(Former name or former address, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

 

Trading Symbol(s)

 

Name of each exchange on which registered:

Common Stock, par value $0.0001 per share

 

AXSM

 

The Nasdaq Global Market

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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 x

 

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. x

 

 

 

 

Item 1.01. Entry Into a Material Definitive Agreement.

 

On July 25, 2019 (the “First Amendment Effective Date”), Axsome Therapeutics, Inc., a Delaware corporation (the “Company”), entered into the first amendment (the “First Amendment”) to its previously disclosed Loan and Security Agreement, dated as of March 5, 2019 (the “Loan Agreement”), with (a) Silicon Valley Bank, a California corporation (“SVB”), in its capacity as administrative agent and collateral agent, (b) Silicon Valley Bank, a California corporation, as a lender, and (c) WestRiver Innovation Lending Fund VIII, L.P., a Delaware limited partnership (“WestRiver” and together with SVB, the “Lenders”), as a lender.

 

Under the First Amendment, the interest-only monthly payment period was extended to 18 months after the date of the Loan Agreement, which may be further extended to 24 months upon receipt by the Company of the additional $4,000,000 that remained unfunded under the Loan Agreement (the “Term B Loan Advance”). The Company’s ability to draw down on this additional amount was extended to December 31, 2019, subject to the Company’s achievement of positive data, prior to or on December 31, 2019, with respect to the Company’s Phase 2 clinical trial for AXS-12, sufficient to submit a Phase 3 protocol to the U.S. Food and Drug Administration (“FDA”), provided that the Company has not received any objections from the FDA within thirty days after submission of such Phase 3 protocol (the “Milestone Event”).  The time period under which the Company may request the Term B Loan Advance was extended to the period commencing on the Milestone Event and continuing through December 31, 2019. The Term B Loan Advance and the initial $20,000,000 advance made under the Loan Agreement (the “Term A Loan Advance” and together with the Term B Loan Advance, the “Loan Advances”) mature on February 1, 2023 (the “Maturity Date”).

 

Pursuant to the Loan Agreement, as amended by the First Amendment, following the interest-only payment period, the Company will begin making monthly payments of principal in equal monthly installments for 30 consecutive months (provided, that, upon the occurrence of the Milestone Event, the repayment schedule will be decreased to 24 consecutive months) and monthly payments of interest, until the Maturity Date.  Interest will accrue on the unpaid principal balance of the outstanding Loan Advances at a floating per annum rate equal to the greater of (i) seven and one-half of one percent (7.50%) and (ii) two percent (2.0%) above the prime rate. The First Amendment increased the final payment fee, payable upon the Company’s repayment of the Loan Advances from 6.0% to 6.30% of the original principal amount of the Loan Advances.

 

Pursuant to the Loan Agreement, as amended by the First Amendment, at the Company’s option, the Company may prepay all, but not less than all of the Loan Advances, subject to a prepayment fee of 3.0% of any amount prepaid prior to the first anniversary of the First Amendment Effective Date, 2.0% of the amount prepaid if the prepayment occurs after the first anniversary of the First Amendment Effective Date through and including the second anniversary of the First Amendment Effective Date, or 1.0% of the amount prepaid if the prepayment occurs after the second anniversary of the First Amendment Effective Date, but prior to the Maturity Date. These percentages are unchanged from the original Loan Agreement.

 

Except as amended by the First Amendment, all other the terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Agreement and the other loan documents remain in full force and effect.  The foregoing description of the First Amendment is qualified in its entirety by reference to the full text of the First Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

In connection with the First Amendment, the Company issued to each of SVB and WestRiver (each, a “Holder”) a warrant, dated July 25, 2019 (individually a “July 2019 Warrant”, and collectively, the “July 2019 Warrants”), which become exercisable only upon funding of the Term B Loan Advance, to purchase 5,750 shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”) at a price per share equal to $25.71. The July 2019 Warrants replace the portion of the warrants related to the Term B Loan Advance that were previously issued to SVB and WestRiver on March 5, 2019 in connection with the Loan Agreement (the “March 2019 Warrants”) to purchase the same number of shares at a price per share equal to $8.10. The July 2019 Warrants, if earned, will be exercisable until July 24, 2026 and will be exercised automatically on a net issuance basis if not exercised prior to the expiration date and if the then-current fair market value of one share of Common Stock is greater than the exercise price then in effect. Additionally, the March 2019 Warrants were amended to fix the number of shares that may be issued upon exercise of each such March 2019 Warrant at 29,167 shares of Common Stock.

 

The foregoing description of the July 2019 Warrants and the March 2019 Warrants is qualified in its entirety by reference to the full text of the July 2019 Warrants and the March 2019 Warrants, which are filed as Exhibits 10.2, 10.3, 10.4 and 10.5, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

 

2

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

 

Item 3.02. Unregistered Sales of Equity Securities.

 

To the extent required by Item 3.02 of Form 8-K, the information regarding the July 2019 Warrants set forth under Item 1.01 of this Form 8-K is incorporated by reference in this Item 3.02. The Company issued to each Holder a July 2019 Warrant in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Company relied on this exemption from registration based in part on the representations made by each Holder, including the representations with respect to each Holder’s status as an accredited investor, as such term is defined in Rule 501(a) of the Securities Act, and each Holder’s investment intent.

 

Item 8.01. Other Events.

 

On July 29, 2019, the Company issued a press release announcing the signing of the First Amendment. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
No.

 

Description

10.1

 

First Amendment to Loan and Security Agreement dated as of July 25, 2019 by and among the Company, Silicon Valley Bank, in its capacity as administrative agent and collateral agent, Silicon Valley Bank, as a lender, WestRiver Innovation Lending Fund VIII, L.P., as a lender and each of the other lenders from time to time party thereto.

10.2

 

Warrant to Purchase Stock made by the Company in favor of Silicon Valley Bank, dated March 5, 2019, as amended.

10.3

 

Warrant to Purchase Stock made by the Company in favor of WestRiver Innovation Lending Fund VIII, L.P., dated March 5, 2019, as amended.

10.4

 

Warrant to Purchase Stock made by the Company in favor of Silicon Valley Bank, dated July 25, 2019.

10.5

 

Warrant to Purchase Stock made by the Company in favor of WestRiver Innovation Lending Fund VIII, L.P., dated July 25, 2019.

99.1

 

Press Release dated July 29, 2019.

 

3

 

SIGNATURE

 

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.

 

 

AXSOME THERAPEUTICS, INC.

 

 

Date: July 29, 2019

 

 

 

 

By:

/s/ Herriot Tabuteau, M.D.

 

 

Name: Herriot Tabuteau, M.D.

 

 

Title: Chief Executive Officer

 

4

Exhibit 10.1

 

FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

 

This First Amendment to Loan and Security Agreement (this “ Amendment ”) is entered into this 25 th  day of July, 2019 by and among (a)  SILICON VALLEY BANK , a California corporation (“ SVB ”), in its capacity as administrative agent and collateral agent (“ Agent ”), (b)  SILICON VALLEY BANK , a California corporation, as a lender, (c)  WESTRIVER INNOVATION LENDING FUND VIII, L.P. , a Delaware limited partnership (“ WestRiver ”), as a lender (SVB and WestRiver and each of the other “Lenders” from time to time a party hereto are referred to herein collectively as the “ Lenders ” and each individually as a “ Lender ”), and (d)  AXSOME THERAPEUTICS, INC. , a Delaware corporation (“ Borrower ”), whose address is 2000 University Avenue, East Palo Alto, California 94303.

 

RECITALS

 

A.             Borrower, Agent and the Lenders have entered into that certain Loan and Security Agreement dated as of March 5, 2019 (as the same may from time to time be amended, modified, supplemented or restated, the “ Loan Agreement ”).

 

B.             The Lenders have extended credit to Borrower for the purposes permitted in the Loan Agreement.

 

C.             Borrower has requested that the Lenders amend the Loan Agreement to (i) extend the Draw Period and (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.

 

D.             The Lenders have agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

 

1.              Definitions .  Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

 

2.              Amendments to Loan Agreement.

 

2.1           Section 7.1 ( Dispositions ).  Section 7.1 of the Loan Agreement is amended in its entirety and replaced with the following:

 

“7.1         Dispositions .  Convey, sell, lease, transfer, assign, or otherwise dispose of (including, without limitation, pursuant to a Division) (collectively, “ Transfer ”), or permit any of its Subsidiaries to Transfer, all or any part of its

 

 

business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting of Permitted Liens and Permitted Investments; (d) consisting of the sale or issuance of any stock of Borrower permitted under Section 7.2 of this Agreement; (e) consisting of Borrower’s use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents; and (f) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business and licenses that could not result in a legal transfer of title of the licensed property but that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States.”

 

2.2           Section 7.3 ( Mergers or Acquisitions ).  Section 7.3 of the Loan Agreement is amended in its entirety and replaced with the following:

 

“ 7.3         Mergers or Acquisitions .  Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person (including, without limitation, by the formation of any Subsidiary or pursuant to a Division).  A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.”

 

2.3           Section 13 ( Definitions ).  The following terms and their respective definitions set forth in Section 13.1 of the Loan Agreement are deleted in their entirety and replaced with the following:

 

“              “ Draw Period ” is the period of time commencing upon the occurrence of the Milestone Event and continuing through December 31, 2019.”

 

“              “ Final Payment ” is a payment (in addition to and not in substitution for the regular monthly payments of principal plus accrued interest) equal to the original aggregate principal amount of each Term Loan Advance extended by the Lenders to Borrower hereunder multiplied by six and thirty hundredths percent (6.30%) due on the earliest to occur of (a) the Term Loan Maturity Date, (b) the acceleration of the Term Loan Advances, (c) the prepayment of the Term Loan Advances pursuant to Section 2.2(d) or 2.2(e), or (d) the termination of this Agreement.”

 

“              “ Milestone Event ” means Borrower has provided Agent and the Lenders with evidence, on or prior to December 31, 2019, satisfactory to Agent in Agent’s and each Lender’s sole but reasonable discretion that Borrower (i) has received positive data with respect to Borrower’s phase 2 clinical trial for AXS-12, sufficient to submit a phase 3 protocol to the FDA and (ii) has not received any objections from the FDA within thirty (30) days after submission of such phase 3 protocol.”

 

 

“              “ Prepayment Premium ” shall be an additional fee, payable to Agent, for the ratable benefit of the Lenders based on their Pro Rata Share, with respect to the Term Loan Advances, in an amount equal to:

 

(a)           for a prepayment of the Term Loan Advances made on or prior to the first (1 st ) anniversary of the First Amendment Effective Date, three percent (3.0%) of the then outstanding principal amount of the Term Loan Advances immediately prior to the date of such prepayment;

 

(b)           for a prepayment of the Term Loan Advances made after the first (1 st ) anniversary of the First Amendment Effective Date, but on or prior to the second (2 nd ) anniversary of the First Amendment Effective Date, two percent (2.0%) of the then outstanding principal amount of the Term Loan Advances immediately prior to the date of such prepayment; and

 

(c)           for a prepayment of the Term Loan Advances made after the second (2 nd ) anniversary of the First Amendment Effective Date, but prior to the Term Loan Maturity Date, one percent (1.0%) of the then outstanding principal amount of the Term Loan Advances immediately prior to the date of such prepayment.”

 

“              “ Repayment Schedule ” means the period of time equal to thirty (30) consecutive months; provided, however, upon the occurrence of the Milestone Event, the Repayment Schedule shall mean the period of time equal to twenty-four (24) consecutive months.”

 

“              “ Term Loan Amortization Date ” is September 1, 2020; provided, however, upon the occurrence of the Milestone Event, the Term Loan Amortization Date shall be March 1, 2021.”

 

“              “ Warrant ” means, collectively, (a) that certain warrant to purchase stock dated as of March 5, 2019 between Borrower and S\TB (the “ First SVB Warrant ”), (b) that certain warrant to purchase stock dated as of March 5, 2019 between Borrower and WestRiver (the “ First WestRiver Warrant ” and together with the First S\TB Warrant, the “ Prior Warrants ”), (c) that certain warrant to purchase stock dated as of the First Amendment Effective Date between Borrower and S\TB (the “ New SVB Warrant ”), and (d) that certain warrant to purchase stock dated as of the First Amendment Effective Date between Borrower and WestRiver (the “ New WestRiver Warrant ”, and together with the New S\TB Warrant, the “ New Warrants ”) in each case, as may be amended, modified, supplemented and/or restated from time to time.”

 

2.4           Section 13 ( Definitions ).  The following new defined terms are hereby inserted alphabetically in Section 13.1:

 

“              “ Division ” means, in reference to any Person which is an entity, the division of such Person into two (2) or more separate Persons, with the dividing Person either continuing or terminating its existence as part of such division, including, without limitation, as contemplated under Section 18-217 of the Delaware Limited Liability Company Act for limited liability companies formed under Delaware law, or any analogous

 

 

action taken pursuant to any other applicable law with respect to any corporation, limited liability company, partnership or other entity.”

 

“              “ First Amendment Effective Date ” is July 25, 2019.”

 

3.              Limitation of Amendments .

 

3.1           The amendments set forth in Section 2 above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Agent or the Lenders may now have or may have in the future under or in connection with any Loan Document.

 

3.2           This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

 

4.              Amendment to Prior Warrants and Issuance of New Warrants .  On the First Amendment Effective Date, Borrower shall issue the New Warrants to SVB and WestRiver, respectively, and upon such date, each of the Prior Warrants shall be deemed amended to fix the number of shares issuable upon exercise of each such warrant at 29,166 shares, as may be adjusted from time to time in accordance with the Loan Agreement.

 

5.              Representations and Warranties .  To induce Agent and the Lenders to enter into this Amendment, Borrower hereby represents and warrants to Agent and the Lenders as follows:

 

5.1           Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

 

5.2           Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

 

5.3           The organizational documents of Borrower delivered to Agent on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

 

5.4           The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;

 

5.5           The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting

 

 

Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;

 

5.6           The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

 

5.7           This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

 

6.              Ratification of Perfection Certificate .  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate of Borrower dated as of dated as of November 9, 2016, as amended by Schedule 2 to that certain First Amendment to Loan and Security Agreement dated as of November 26, 2018 between Borrower and SVB, and acknowledges, confirms and agrees the disclosures and information Borrower provided to Agent in said Perfection Certificate have not changed, as of the date hereof.

 

7.              Integration .  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.

 

8.              Counterparts .  This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

 

9.              Effectiveness .  This Amendment shall be deemed effective upon (a) the due execution and delivery to Agent of this Amendment by each party hereto and (b) Borrower’s payment to Agent of the Lenders’ legal fees and expenses incurred in connection with this Amendment.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF , the parties hereto have caused this Amendment to be duly executed as a sealed instrument under the laws of the Commonwealth of Massachusetts as of the date first written above.

 

BORROWER :

 

 

 

 

 

AXSOME THERAPEUTICS, INC.

 

 

 

 

 

By:

/s/ Harriot Tabuteau

 

 

 

 

 

 

Name:

Harriot Tabuteau

 

 

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

AGENT :

 

 

 

 

 

 

SILICON VALLEY BANK, as Agent

 

 

 

 

 

 

By:

/s/ Lauren Cole

 

 

 

 

 

 

Name:

Lauren Cole

 

 

 

 

 

 

Title:

Director

 

 

 

 

 

 

LENDERS :

 

 

 

 

 

 

SILICON VALLEY BANK

 

 

 

 

 

 

By:

/s/ Lauren Cole

 

 

 

 

 

 

Name:

Lauren Cole

 

 

 

 

 

 

Title:

Director

 

 

 

 

 

 

WESTRIVER INNOVATION LENDING FUND VIII, L.P.

 

 

 

 

 

 

By:

/s/ Trent Dawson

 

 

 

 

 

 

Name:

Trent Dawson

 

 

 

 

 

 

Title:

Chief Financial Officer

 

 

 

Exhibit 10.2

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

WARRANT TO PURCHASE STOCK

 

Company:   Axsome Therapeutics, Inc., a Delaware corporation

Number of Shares:   As set forth in Paragraph A below

Type/Series of Stock:   Common Stock, $0.0001 par value per share

Warrant Price:   $8.10 per Share, subject to adjustment

Issue Date:  March 5, 2019

Expiration Date:   March 4, 2026         See also Section 5.1(b).

Credit Facility:         This Warrant to Purchase Stock (“ Warrant ”) is issued in connection with that certain Loan and Security Agreement of even date herewith among Silicon Valley Bank, WestRiver Innovation Lending Fund VIII, L.P. and the Company (as amended and/or modified and in effect from time to time, the “ Loan Agreement ”).

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “ Holder ”) is entitled to purchase up to the number of fully paid and non-assessable shares of the above-stated Type/Series of Stock (the “ Class ”) of the above-named company (the “ Company ”) determined pursuant to Paragraph A below, at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.  Reference is made to Section 5.4 of this Warrant whereby Silicon Valley Bank shall transfer this Warrant to its parent company, SVB Financial Group.

 

A.             Number of Shares .  Upon the making (if any) of each Term Loan Advance (as defined in the Loan Agreement) to the Company, this Warrant automatically shall become exercisable for such number of shares of the Class as shall equal (i) the Shares Pool, multiplied by (ii) a fraction, the numerator of which shall equal the amount of such Term Loan Advance and the denominator of which shall equal $24,000,000, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant.  All shares, if any, for which this Warrant becomes exercisable pursuant to this Paragraph A are referred to herein cumulatively and collectively, and as may be adjusted from time to time in accordance with the provisions of this Warrant, as the “ Shares .  As used herein, “ Shares Pool ” means 35,000 shares of the Class, as such number may be adjusted from time to time in accordance with the provisions of this Warrant (as if the Shares Pool constituted “Shares” hereunder at all times from and after the Issue Date hereof for such purpose).

 

 

SECTION 1.         EXERCISE .

 

1.1          Method of Exercise .  Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

 

1.2          Cashless Exercise .  On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised.  Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:

 

X =                              Y(A-B)/A

 

where:

 

X =                              the number of Shares to be issued to the Holder;

 

Y =                              the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

 

A =                              the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

 

B =                              the Warrant Price.

 

1.3          Fair Market Value .  If shares of the Class are then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “ Trading Market ”), the fair market value of a Share shall be the closing price or last sale price of a share of the Class reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company.  If shares of the Class are not then traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

 

1.4          Delivery of Certificate and New Warrant .  Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver, or cause to be delivered, to Holder a certificate, or evidence of a book-entry interest, representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.

 

1.5          Replacement of Warrant .  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss,

 

2

 

theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

 

1.6          Treatment of Warrant Upon Acquisition of Company .

 

(a)           Acquisition .  For the purpose of this Warrant, “ Acquisition ” means any transaction or series of related transactions involving:  (i) the sale, lease, exclusive license (other than a license permitted under Section 7.1 of the Loan Agreement), or other disposition of all or substantially all of the assets of the Company; (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization (or, if such Company stockholders beneficially own a majority of the outstanding voting power of the surviving or successor entity as of immediately after such merger, consolidation or reorganization, such surviving or successor entity is not the Company); or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.

 

(b)           Treatment of Warrant at Acquisition .  In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “ Cash/Public Acquisition ”), and the fair market value of one Share as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date immediately prior to such Cash/Public Acquisition, and Holder has not exercised this Warrant pursuant to Section 1.1 or Section 1.2 above as to all Shares, then this Warrant shall automatically be deemed to be Cashless Exercised pursuant to Section 1.2 above as to all Shares not previously exercised effective immediately prior to and contingent upon the consummation of a Cash/Public Acquisition.  In connection with such Cashless Exercise, Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as of the date thereof and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon exercise.  In the event of a Cash/Public Acquisition where the fair market value of one Share as determined in accordance with Section 1.3 above would be less than the Warrant Price in effect immediately prior to such Cash/Public Acquisition, then this Warrant will expire immediately prior to the consummation of such Cash/Public Acquisition.

 

(c)           Upon the closing of any Acquisition other than a Cash/Public Acquisition, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.

 

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(d)           As used in this Warrant, “ Marketable Securities ” means securities meeting all of the following requirements:  (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition.

 

SECTION 2.         ADJUSTMENTS TO THE SHARES AND WARRANT PRICE .

 

2.1          Stock Dividends, Splits, Etc .  If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in additional shares of the Class or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased.  If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

 

2.2          Reclassification, Exchange, Combinations or Substitution .  Upon any event whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations, substitutions, replacements or other similar events.

 

2.3          No Fractional Share .  No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.

 

2.4          Notice/Certificate as to Adjustments .  Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or

 

4

 

number of Shares and facts upon which such adjustment is based.  The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer or other Company officer having similar duties, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon the date of such adjustment.

 

SECTION 3.         REPRESENTATIONS AND COVENANTS OF THE COMPANY .

 

3.1          Representations and Warranties .  The Company represents and warrants to, and agrees with, the Holder as follows:

 

(a)           [Reserved].

 

(b)           All Shares which may be issued upon the exercise of this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.  The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class and other securities as will be sufficient to permit the exercise in full of this Warrant.

 

3.2          Notice of Certain Events .  If the Company proposes at any time to:

 

(a)           declare any dividend or distribution upon the outstanding shares of the Class, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

 

(b)           offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);

 

(c)           effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class; or

 

(d)           effect an Acquisition or to liquidate, dissolve or wind up; then, in connection with each such event, the Company shall give Holder notice thereof at the same time and in the same manner as Holder notifies the holders of the outstanding shares of the Class of such event.

 

SECTION 4.         REPRESENTATIONS, WARRANTIES OF THE HOLDER .

 

The Holder represents and warrants to the Company as follows:

 

4.1          Purchase for Own Account .  This Warrant and the Shares to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

 

5

 

4.2          Disclosure of Information .  Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

 

4.3          Investment Experience .  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

4.4          Accredited Investor Status .  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

 

4.5          The Act .  Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

4.6          No Stockholder Rights .  Without limiting any provision of this Warrant, Holder agrees that as a Holder of this Warrant it will not have any rights (including, but not limited to, voting rights) as a stockholder of the Company with respect to the Shares issuable hereunder unless and until the exercise of this Warrant and then only with respect to the Shares issued on such exercise.

 

SECTION 5.         MISCELLANEOUS .

 

5.1          Term; Automatic Cashless Exercise Upon Expiration .

 

(a)           Term .  Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.

 

(b)           Automatic Cashless Exercise upon Expiration .  In the event that, upon the Expiration Date, the fair market value of one Share as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically

 

6

 

be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares issued upon such exercise to Holder.

 

5.2          Legends .                Each certificate evidencing Shares shall be imprinted with a legend in substantially the following form:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO SILICON VALLEY BANK DATED MARCH 5, 2019, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

5.3          Compliance with Securities Laws on Transfer .  This Warrant and the Shares issued upon exercise of this Warrant may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to SVB Financial Group (Silicon Valley Bank’s parent company) or any other affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act.

 

5.4          Transfer Procedure .  After receipt by Silicon Valley Bank of the executed Warrant, Silicon Valley Bank will transfer all of this Warrant to its parent company, SVB Financial Group.  By its acceptance of this Warrant, SVB Financial Group hereby makes to the Company each of the representations and warranties set forth in Section 4 hereof and agrees to be bound by all of the terms and conditions of this Warrant as if the original Holder hereof Subject to the provisions of Section 5.3 and upon providing the Company with written notice, SVB Financial Group and any subsequent Holder may transfer all or part of this Warrant or the Shares issued upon exercise of this Warrant to any transferee, provided, however, in connection with any such transfer, SVB Financial Group or any subsequent Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable); and provided further, that any subsequent transferee other than SVB Financial Group shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.

 

5.5          Notices .  All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3 rd ) Business Day after being mailed by first-class registered or

 

7

 

certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5.  All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

SVB Financial Group
Attn:  Treasury Department
3003 Tasman Drive, HC 215
Santa Clara, CA 95054
Telephone:  (408) 654-7400
Facsimile:  (408) 988-8317
Email address: svbfgwarrants@svb.com

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

 

Axsome Therapeutics, Inc.
Attn:  Chief Executive Officer
25 Broadway, 9 th  Floor
New York, NY 10004
Telephone:  (212) 332-3241
Facsimile:  (212) 320-0245
Email:  htabuteau@axsome.com

 

With a copy (which shall not constitute notice) to:

 

DLA Piper LLP (US)
Attn:  Emilio Ragosa, Esq.
51 John F. Kennedy Parkway, Suite 120
Short Hills, New Jersey 07078-2704
Facsimile:  (973) 215-2804
Email:  emilio.ragosa@dlapiper.com

 

5.6          Waiver .  This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

5.7          Attorneys’ Fees .  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

 

5.8          Counterparts; Facsimile/Electronic Signatures .  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.  Any signature page delivered electronically or by facsimile shall be binding to the same extent as an

 

8

 

original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 

5.9          Governing Law .  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

5.10        Headings .  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

 

5.11        Business Days .  “ Business Day ” is any day that is not a Saturday, Sunday or a day on which Silicon Valley Bank is closed.

 

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[Signature page follows]

 

9

 

IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

 

“COMPANY”

 

 

 

 

 

 

AXSOME THERAPEUTICS, INC.

 

 

 

 

 

 

By:

/s/ Herriot Tabuteau

 

 

 

 

 

 

Name:

Herriot Tabuteau

 

 

 

(Print)

 

 

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

“HOLDER”

 

 

 

 

 

 

SILICON VALLEY BANK

 

 

 

 

 

 

By:

/s/ Lauren Cole

 

 

 

 

 

 

Name:

Lauren Cole

 

 

 

(Print)

 

 

 

 

 

 

Title:

Director

 

 

 

10

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.                                       The undersigned Holder hereby exercises its right to purchase              shares of the Common/Series         Preferred [circle one] Stock of                    (the “ Company ”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:

 

o                                                             check in the amount of $           payable to order of the Company enclosed herewith

 

o                                                             Wire transfer of immediately available funds to the Company’s account

 

o                                                             Cashless Exercise pursuant to Section 1.2 of the Warrant

 

o                                                             Other [Describe]

 

2.                                       Please issue a certificate or certificates representing the Shares in the name specified below:

 

 

 

Holder’s Name

 

 

 

 

 

 

 

 

 

 

 

(Address)

 

 

3.                                       By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof HOLDER:

 

 

HOLDER:

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

(Date):

 

 

11

 

AMENDMENT NO. 1 TO WARRANT TO PURCHASE STOCK

 

THIS AMENDMENT NO. 1 TO WARRANT TO PURCHASE STOCK is made this 25 th  day of July, 2019, by and between SVB Financial Group (“ Holder ”) and Axsome Therapeutics, Inc., a Delaware corporation (the “ Company ”).

 

WHEREAS, Holder is the holder, by assignment from Silicon Valley Bank (“ Bank ”), of that certain Warrant to Purchase Stock dated March 5, 2019 issued by the Company to Bank (the “ Warrant ”); and

 

WHEREAS, in connection with certain amendments of even date herewith to the loan arrangement among Bank, WestRiver Innovation Lending Fund VIII, L.P. and the Company, the parties desire to amend the Warrant in the manner set forth below;

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

4.             Amendment of Warrant .  The Warrant is hereby amended by deleting Paragraph A thereof in its entirety and substituting therefor the following new Paragraph A:

 

“A.          Number of Shares .  This Warrant shall be exercisable for 29,167 shares of the Class, subject to adjustment from time to time in accordance with the provisions of this Warrant (the “ Shares ”).”

 

5.             No Adjustment Events .  The Company represents and warrants that, since the original Issue Date of the Warrant, there has occurred no event of a type described in Section 2 thereof that resulted in an adjustment to the number of Shares, the Class or the Warrant Price (as such terms are defined in the Warrant).

 

6.             No Other Amendments .  Except as amended hereby, the Warrant shall remain in full force and effect as originally written.

 

7.             Governing Law .  This Amendment No. 1 shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

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[Signature page follows]

 

12

 

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to Warrant to Purchase Stock as of the date first above written.

 

AXSOME THERAPEUTICS, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ Herriot Tabuteau

 

 

Name:

Herriot Tabuteau

 

 

Title:

Chief Executive Officer

 

 

 

 

 

SVB FINANCIAL GROUP

 

 

 

 

 

 

 

 

 

By:

/s/ Erin Pfeifer

 

 

Name:

Erin Pfeifer

 

 

Title:

Senior Fixed Income Portfolio Manager

 

 

 

Appendix 1

Exhibit 10.3

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

WARRANT TO PURCHASE STOCK

 

Company:  Axsome Therapeutics, Inc., a Delaware corporation

Number of Shares:  As set forth in Paragraph A below

Type/Series of Stock:  Common Stock, $0.0001 par value per share

Warrant Price:  $8.10 per Share, subject to adjustment

Issue Date:   March 5, 2019

Expiration Date:  March 4, 2026            See also Section 5.1(b).

Credit Facility:  This Warrant to Purchase Stock (“ Warrant ”) is issued in connection with that certain Loan and Security Agreement of even date herewith among Silicon Valley Bank, WestRiver Innovation Lending Fund VIII, L.P. and the Company (as amended and/or modified and in effect from time to time, the “ Loan Agreement ”).

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, WESTRIVER INNOVATION LENDING FUND VIII, L.P. (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “ Holder ”) is entitled to purchase up to the number of fully paid and non-assessable shares of the above-stated Type/Series of Stock (the “ Class ”) of the above-named company (the “ Company ”) determined pursuant to Paragraph A below, at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.

 

A.                                     Number of Shares .  Upon the making (if any) of each Term Loan Advance (as defined in the Loan Agreement) to the Company, this Warrant automatically shall become exercisable for such number of shares of the Class as shall equal (i) the Shares Pool, multiplied by (ii) a fraction, the numerator of which shall equal the amount of such Term Loan Advance and the denominator of which shall equal $24,000,000, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant.  All shares, if any, for which this Warrant becomes exercisable pursuant to this Paragraph A are referred to herein cumulatively and collectively, and as may be adjusted from time to time in accordance with the provisions of this Warrant, as the “ Shares ”.  As used herein, “ Shares Pool ” means 35,000 shares of the Class, as such number may be adjusted from time to time in accordance with the provisions of this Warrant (as if the Shares Pool constituted “Shares” hereunder at all times from and after the Issue Date hereof for such purpose).

 

 

SECTION 1. EXERCISE .

 

1.1                                Method of Exercise .  Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

 

1.2                                Cashless Exercise .  On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised.  Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:

 

 

X =

Y(A-B)/A

 

 

 

where:

 

 

 

 

 

 

X =

the number of Shares to be issued to the Holder;

 

 

 

 

Y =

the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

 

 

 

 

A =

the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

 

 

 

 

B =

the Warrant Price.

 

1.3                                Fair Market Value .  If shares of the Class are then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “ Trading Market ”), the fair market value of a Share shall be the closing price or last sale price of a share of the Class reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company.  If shares of the Class are not then traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

 

1.4                                Delivery of Certificate and New Warrant .  Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver, or cause to be delivered, to Holder a certificate, or evidence of a book-entry interest, representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.

 

1.5                                Replacement of Warrant .  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss,

 

2

 

theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

 

1.6                                Treatment of Warrant Upon Acquisition of Company .

 

(a)                                  Acquisition .  For the purpose of this Warrant, “ Acquisition ” means any transaction or series of related transactions involving:  (i) the sale, lease, exclusive license (other than a license permitted under Section 7.1 of the Loan Agreement), or other disposition of all or substantially all of the assets of the Company; (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization (or, if such Company stockholders beneficially own a majority of the outstanding voting power of the surviving or successor entity as of immediately after such merger, consolidation or reorganization, such surviving or successor entity is not the Company); or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.

 

(b)                                  Treatment of Warrant at Acquisition .  In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “ Cash/Public Acquisition ”), and the fair market value of one Share as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date immediately prior to such Cash/Public Acquisition, and Holder has not exercised this Warrant pursuant to Section 1.1 or Section 1.2 above as to all Shares, then this Warrant shall automatically be deemed to be Cashless Exercised pursuant to Section 1.2 above as to all Shares not previously exercised effective immediately prior to and contingent upon the consummation of a Cash/Public Acquisition.  In connection with such Cashless Exercise, Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as of the date thereof and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon exercise.  In the event of a Cash/Public Acquisition where the fair market value of one Share as determined in accordance with Section 1.3 above would be less than the Warrant Price in effect immediately prior to such Cash/Public Acquisition, then this Warrant will expire immediately prior to the consummation of such Cash/Public Acquisition.

 

(c)                                   Upon the closing of any Acquisition other than a Cash/Public Acquisition, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.

 

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(d)                                  As used in this Warrant, “ Marketable Securities ” means securities meeting all of the following requirements:  (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition.

 

SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE .

 

2.1                                Stock Dividends, Splits, Etc .  If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in additional shares of the Class or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased.  If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

 

2.2                                Reclassification, Exchange, Combinations or Substitution .  Upon any event whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations, substitutions, replacements or other similar events.

 

2.3                                No Fractional Share .  No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.

 

2.4                                Notice/Certificate as to Adjustments .  Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or

 

4

 

number of Shares and facts upon which such adjustment is based.  The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer or other Company officer having similar duties, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon the date of such adjustment.

 

SECTION 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY .

 

3.1                                Representations and Warranties .  The Company represents and warrants to, and agrees with, the Holder as follows:

 

(a)                                  [Reserved].

 

(b)                                  All Shares which may be issued upon the exercise of this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.  The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class and other securities as will be sufficient to permit the exercise in full of this Warrant.

 

3.2                                Notice of Certain Events .  If the Company proposes at any time to:

 

(a)                                  declare any dividend or distribution upon the outstanding shares of the Class, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

 

(b)                                  offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);

 

(c)                                   effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class; or

 

(d)                                  effect an Acquisition or to liquidate, dissolve or wind up;

 

then, in connection with each such event, the Company shall give Holder notice thereof at the same time and in the same manner as Holder notifies the holders of the outstanding shares of the Class of such event.

 

SECTION 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER .

 

The Holder represents and warrants to the Company as follows:

 

4.1                                Purchase for Own Account .  This Warrant and the Shares to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

 

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4.2                                Disclosure of Information .  Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

 

4.3                                Investment Experience .  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

4.4                                Accredited Investor Status .  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

 

4.5                                The Act .  Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

4.6                                No Stockholder Rights .  Without limiting any provision of this Warrant, Holder agrees that as a Holder of this Warrant it will not have any rights (including, but not limited to, voting rights) as a stockholder of the Company with respect to the Shares issuable hereunder unless and until the exercise of this Warrant and then only with respect to the Shares issued on such exercise.

 

SECTION 5. MISCELLANEOUS .

 

5.1                                Term; Automatic Cashless Exercise Upon Expiration .

 

(a)                                  Term .  Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.

 

(b)                                  Automatic Cashless Exercise upon Expiration .  In the event that, upon the Expiration Date, the fair market value of one Share as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall

 

6

 

automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares issued upon such exercise to Holder.

 

5.2                                Legends .  Each certificate evidencing Shares shall be imprinted with a legend in substantially the following form:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO WESTRIVER INNOVATION LENDING FUND VIII, L.P. DATED MARCH 5, 2019, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

5.3                                Compliance with Securities Laws on Transfer .  This Warrant and the Shares issued upon exercise of this Warrant may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder, provided that such affiliate is an “accredited investor” as defined in Regulation D promulgated under the Act.

 

5.4                                Transfer Procedure .  Subject to the provisions of Section 5.3 and upon providing the Company with written notice, Holder may transfer all or part of this Warrant or the Shares issued upon exercise of this Warrant to any transferee, provided, however, in connection with any such transfer, Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable); and provided further, that any transferee shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.

 

5.5                                Notices .  All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5.  All notices

 

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to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

WestRiver Innovation Lending Fund VIII, L.P.

c/o Chief Financial Officer

3720 Carillon Point

Kirkland, Washington 98033-7455

Attention:  Trent Dawson

Telephone:  (425) 952-3951

Email:  tdawson@westrivermgmt.com

 

With a copy (which shall not constitute notice) to:

 

Perkins Coie LLP

1201 Third Avenue, Suite 4800

Seattle, Washington 98101-3099

Attention:  David C. Clarke

Telephone:  (206) 359-8612

Email:  dclarke@perkinscoie.com

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

 

Axsome Therapeutics, Inc.

Attn:  Chief Executive Officer

25 Broadway, 9 th  Floor

New York, NY 10004

Telephone:  (212) 332-3241

Facsimile:  (212) 320-0245

Email:  htabuteau@axsome.com

 

With a copy (which shall not constitute notice) to:

 

DLA Piper LLP (US)

Attn:  Emilio Ragosa, Esq.

51 John F. Kennedy Parkway, Suite 120

Short Hills, New Jersey 07078-2704

Facsimile:  (973) 215-2804

Email:  emilio.ragosa@dlapiper.com

 

5.6                                Waiver .  This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

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5.7                                Attorneys’ Fees .  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

 

5.8                                Counterparts; Facsimile/Electronic Signatures .  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.  Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 

5.9                                Governing Law .  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

5.10                         Headings .  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

 

5.11                         Business Days .  “ Business Day ” is any day that is not a Saturday, Sunday or a day on which banks in Washington are closed.

 

[Remainder of page left blank intentionally]
[Signature page follows]

 

9

 

IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

 

“COMPANY”

 

 

 

AXSOME THERAPEUTICS, INC.

 

 

 

By:

/s/ Harriot Tabuteau

 

 

 

 

Name:

Harriot Tabuteau

 

 

(Print)

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

“HOLDER”

 

 

 

WESTRIVER INNOVATION LENDING FUND VIII, L.P.

 

 

 

By:  Loan Manager II, LLC, its general partner

 

 

 

By:

/s/ Trent Dawson

 

 

 

 

Name:

Trent Dawson

 

 

(Print)

 

 

 

 

Title:

Chief Financial Officer

 

 

10

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.                                       The undersigned Holder hereby exercises its right to purchase              shares of the Common/Series         Preferred [circle one] Stock of                    (the “ Company ”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:

 

o                                                             check in the amount of $           payable to order of the Company enclosed herewith

 

o                                                             Wire transfer of immediately available funds to the Company’s account

 

o                                                             Cashless Exercise pursuant to Section 1.2 of the Warrant

 

o                                                             Other [Describe]

 

2.                                       Please issue a certificate or certificates representing the Shares in the name specified below:

 

 

 

Holder’s Name

 

 

 

 

 

 

 

 

 

 

 

(Address)

 

 

3.                                       By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof.

 

 

HOLDER:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

(Date):

 

 

Appendix 1

 

AMENDMENT NO. 1 TO WARRANT TO PURCHASE STOCK

 

THIS AMENDMENT NO. 1 TO WARRANT TO PURCHASE STOCK is made this 25 th  day of July, 2019, by and between WestRiver Innovation Lending Fund VIII, L.P. (“ Holder ”) and Axsome Therapeutics, Inc., a Delaware corporation (the “ Company ”).

 

WHEREAS, Holder is the holder of that certain Warrant to Purchase Stock dated March 5, 2019 issued by the Company to Holder (the “ Warrant ”); and

 

WHEREAS, in connection with certain amendments of even date herewith to the loan arrangement among Holder, Silicon Valley Bank and the Company, the parties desire to amend the Warrant in the manner set forth below;

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

B.                                     Amendment of Warrant .  The Warrant is hereby amended by deleting Paragraph A thereof in its entirety and substituting therefor the following new Paragraph A:

 

“A.                               Number of Shares .  This Warrant shall be exercisable for 29,167 shares of the Class, subject to adjustment from time to time in accordance with the provisions of this Warrant (the “ Shares ”).”

 

C.                                     No Adjustment Events .  The Company represents and warrants that, since the original Issue Date of the Warrant, there has occurred no event of a type described in Section 2 thereof that resulted in an adjustment to the number of Shares, the Class or the Warrant Price (as such terms are defined in the Warrant).

 

D.                                     No Other Amendments .  Except as amended hereby, the Warrant shall remain in full force and effect as originally written.

 

E.                                      Governing Law .  This Amendment No. 1 shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

[Remainder of page left blank intentionally]
[Signature page follows]

 

Appendix 2

 

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to Warrant to Purchase Stock as of the date first above written.

 

AXSOME THERAPEUTICS, INC.

 

 

 

 

 

By:

/s/ Herriot Tabuteau

 

Name:

Harriot Tabuteau

 

Title:

Chief Financial Officer

 

 

 

 

 

WESTRIVER INNOVATION LENDING FUND VIII, L.P.

 

 

 

By:  Loan Manager II, LLC, its general partner

 

 

 

 

 

By:

 /s/ Trent Dawson

 

Name:

Trent Dawson

 

Title:

Chief Financial Officer

 

 

Appendix 3

Exhibit 10.4

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

WARRANT TO PURCHASE STOCK

 

Company :  Axsome Therapeutics, Inc., a Delaware corporation

Number of Shares :  As set forth in Paragraph A below

Type/Series of Stock :  Common Stock, $0.0001 par value per share

Warrant Price :  $25.71 per Share, subject to adjustment

Issue Date :  July 25, 2019

Expiration Date :  July 24, 2026                   See also Section 5.1(b) .

Credit Facility :  This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain First Amendment, of even date herewith, to that certain Loan and Security Agreement dated March 5, 2019, among Silicon Valley Bank, WestRiver Innovation Lending Fund VIII, L.P. and the Company (collectively, and as may be further amended and/or modified and in effect from time to time, the “Loan Agreement”).

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “ Holder ”) is entitled to purchase up to the number of fully paid and non-assessable shares of the above-stated Type/Series of Stock (the “ Class ”) of the above-named company (the “ Company ”) determined pursuant to Paragraph A below, at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.  Reference is made to Section 5.4 of this Warrant whereby Silicon Valley Bank shall transfer this Warrant to its parent company, SVB Financial Group.

 

A.                                     Number of Shares .  Upon the making, if any, of the first Term B Loan Advance (as defined in the Loan Agreement) to the Company in any amount, this Warrant automatically shall become exercisable for 5,750 shares of the Class, as such number may be adjusted from time to time in accordance with the provisions of this Warrant (the “ Shares ”), including, without limitation, adjustments in respect of events occurring prior to the date, if any, on which this Warrant becomes exercisable for such shares as if they constituted “Shares” hereunder for such purpose at all times from the Issue Date.

 

SECTION 1. EXERCISE .

 

1.1                                Method of Exercise .  Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1

 

 

and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

 

1.2                                Cashless Exercise .  On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised.  Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:

 

X = Y(A-B)/A

 

where:

 

X =                              the number of Shares to be issued to the Holder;

 

Y =                              the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

 

A =                              the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

 

B =                              the Warrant Price.

 

1.3                                Fair Market Value .  If shares of the Class are then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “ Trading Market ”), the fair market value of a Share shall be the closing price or last sale price of a share of the Class reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company.  If shares of the Class are not then traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

 

1.4                                Delivery of Certificate and New Warrant .  Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver, or cause to be delivered, to Holder a certificate, or evidence of a book-entry interest, representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.

 

1.5                                Replacement of Warrant .  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

 

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1.6                                Treatment of Warrant Upon Acquisition of Company .

 

(a)                                  Acquisition .  For the purpose of this Warrant, “ Acquisition ” means any transaction or series of related transactions involving:  (i) the sale, lease, exclusive license (other than a license permitted under Section 7.1 of the Loan Agreement), or other disposition of all or substantially all of the assets of the Company; (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization (or, if such Company stockholders beneficially own a majority of the outstanding voting power of the surviving or successor entity as of immediately after such merger, consolidation or reorganization, such surviving or successor entity is not the Company); or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.

 

(b)                                  Treatment of Warrant at Acquisition .  In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “ Cash/Public Acquisition ”), and the fair market value of one Share as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date immediately prior to such Cash/Public Acquisition, and Holder has not exercised this Warrant pursuant to Section 1.1 or Section 1.2 above as to all Shares, then this Warrant shall automatically be deemed to be Cashless Exercised pursuant to Section 1.2 above as to all Shares not previously exercised effective immediately prior to and contingent upon the consummation of a Cash/Public Acquisition.  In connection with such Cashless Exercise, Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as of the date thereof and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon exercise.  In the event of a Cash/Public Acquisition where the fair market value of one Share as determined in accordance with Section 1.3 above would be less than the Warrant Price in effect immediately prior to such Cash/Public Acquisition, then this Warrant will expire immediately prior to the consummation of such Cash/Public Acquisition.

 

(c)                                   Upon the closing of any Acquisition other than a Cash/Public Acquisition, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.

 

(d)                                  As used in this Warrant, “ Marketable Securities ” means securities meeting all of the following requirements:  (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on

 

3

 

or prior to the closing thereof is then traded in a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition.

 

SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE .

 

2.1                                Stock Dividends, Splits, Etc .  If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in additional shares of the Class or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased.  If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

 

2.2                                Reclassification, Exchange, Combinations or Substitution .  Upon any event whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations, substitutions, replacements or other similar events.

 

2.3                                No Fractional Share .  No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.

 

2.4                                Notice/Certificate as to Adjustments .  Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and facts upon which such adjustment is based.  The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer or other Company officer having similar duties, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon the date of such adjustment.

 

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SECTION 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY .

 

3.1                                Representations and Warranties .  The Company represents and warrants to, and agrees with, the Holder as follows:

 

(a)                                  [Reserved].

 

(b)                                  All Shares which may be issued upon the exercise of this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.  The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class and other securities as will be sufficient to permit the exercise in full of this Warrant.

 

3.2                                Notice of Certain Events .  If the Company proposes at any time to:

 

(a)                                  declare any dividend or distribution upon the outstanding shares of the Class, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

 

(b)                                  offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);

 

(c)                                   effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class; or

 

(d)                                  effect an Acquisition or to liquidate, dissolve or wind up; then, in connection with each such event, the Company shall give Holder notice thereof at the same time and in the same manner as Holder notifies the holders of the outstanding shares of the Class of such event.

 

SECTION 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER .

 

The Holder represents and warrants to the Company as follows:

 

4.1                                Purchase for Own Account .  This Warrant and the Shares to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

 

4.2                                Disclosure of Information .  Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

 

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4.3                                Investment Experience .  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

4.4                                Accredited Investor Status .  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

 

4.5                                The Act .  Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

4.6                                No Stockholder Rights .  Without limiting any provision of this Warrant, Holder agrees that as a Holder of this Warrant it will not have any rights (including, but not limited to, voting rights) as a stockholder of the Company with respect to the Shares issuable hereunder unless and until the exercise of this Warrant and then only with respect to the Shares issued on such exercise.

 

SECTION 5. MISCELLANEOUS .

 

5.1                                Term; Automatic Cashless Exercise Upon Expiration .

 

(a)                                  Term .  Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.

 

(b)                                  Automatic Cashless Exercise upon Expiration .  In the event that, upon the Expiration Date, the fair market value of one Share as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares issued upon such exercise to Holder.

 

5.2                                Legends .                                                 Each certificate evidencing Shares shall be imprinted with a legend in substantially the following form:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

 

6

 

AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO SILICON VALLEY BANK DATED JULY 25, 2019, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

5.3                                Compliance with Securities Laws on Transfer .  This Warrant and the Shares issued upon exercise of this Warrant may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to SVB Financial Group (Silicon Valley Bank’s parent company) or any other affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act.

 

5.4                                Transfer Procedure .  After receipt by Silicon Valley Bank of the executed Warrant, Silicon Valley Bank will transfer all of this Warrant to its parent company, SVB Financial Group.  By its acceptance of this Warrant, SVB Financial Group hereby makes to the Company each of the representations and warranties set forth in Section 4 hereof and agrees to be bound by all of the terms and conditions of this Warrant as if the original Holder hereof.  Subject to the provisions of Section 5.3 and upon providing the Company with written notice, SVB Financial Group and any subsequent Holder may transfer all or part of this Warrant or the Shares issued upon exercise of this Warrant to any transferee, provided, however, in connection with any such transfer, SVB Financial Group or any subsequent Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable); and provided further, that any subsequent transferee other than SVB Financial Group shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.

 

5.5                                Notices .  All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3 rd ) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5.  All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

7

 

SVB Financial Group

Attn:  Treasury Department

3003 Tasman Drive, HC 215

Santa Clara, CA 95054

Telephone:  (408) 654-7400

Facsimile:  (408) 988-8317

Email address: svbfgwarrants@svb.com

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

 

Axsome Therapeutics, Inc.

Attn:  Chief Executive Officer

25 Broadway, 9 th  Floor

New York, NY 10004

Telephone:  (212) 332-3241

Facsimile:  (212) 320-0245

Email:  htabuteau@axsome.com

 

With a copy (which shall not constitute notice) to:

 

DLA Piper LLP (US)

Attn:  Emilio Ragosa, Esq.

51 John F. Kennedy Parkway, Suite 120

Short Hills, New Jersey 07078-2704

Facsimile:  (973) 215-2804

Email:  emilio.ragosa@dlapiper.com

 

5.6                                Waiver .  This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

5.7                                Attorneys’ Fees .  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

 

5.8                                Counterparts; Facsimile/Electronic Signatures .  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.  Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 

5.9                                Governing Law .  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

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5.10                         Headings .  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

 

5.11                         Business Days .  “ Business Day ” is any day that is not a Saturday, Sunday or a day on which Silicon Valley Bank is closed.

 

[Remainder of page left blank intentionally]
[Signature page follows]

 

9

 

IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

 

“COMPANY”

 

 

 

AXSOME THERAPEUTICS, INC.

 

 

 

 

 

 

By:

/s/ Herriot Tabuteau

 

 

 

 

Name:

Herriot Tabuteau

 

 

(Print)

 

 

 

 

Title:

Chief Executive Officer

 

 

 

“HOLDER”

 

 

 

SILICON VALLEY BANK

 

 

 

 

 

 

 

By:

/s/ Lauren Cole

 

 

 

 

Name:

Lauren Cole

 

 

(Print)

 

 

 

 

Title:

Director

 

 

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.                                       The undersigned Holder hereby exercises its right to purchase              shares of the Common/Series       Preferred [circle one] Stock of                  (the “ Company ”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:

 

o                                                             check in the amount of $ payable to order of the Company enclosed herewith

 

s                                                                    Wire transfer of immediately available funds to the Company’s account

 

o                                                             Cashless Exercise pursuant to Section 1.2 of the Warrant

 

o                                                             Other [Describe]

 

2.                                       Please issue a certificate or certificates representing the Shares in the name specified below:

 

 

 

Holder’s Name

 

 

 

 

 

 

 

 

 

 

 

(Address)

 

 

3.                                       By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof.

 

 

HOLDER:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

(Date):

 

 

Appendix 1

Exhibit 10.5

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

WARRANT TO PURCHASE STOCK

 

Company:   Axsome Therapeutics, Inc., a Delaware corporation

Number of Shares:   As set forth in Paragraph A below

Type/Series of Stock:   Common Stock, $0.0001 par value per share

Warrant Price:   $25.71 per Share, subject to adjustment

Issue Date:   July 25, 2019

Expiration Date:   July 24, 2026                                                       See also Section 5.1(b).

Credit Facility:   This Warrant to Purchase Stock (“ Warrant ”) is issued in connection with that certain First Amendment, of even date herewith, to that certain Loan and Security Agreement dated March 5, 2019, among Silicon Valley Bank, WestRiver Innovation Lending Fund VIII, L.P. and the Company (collectively, and as may be further amended and/or modified and in effect from time to time, the “ Loan Agreement ”).

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, WESTRIVER INNOVATION LENDING FUND VIII, L.P. (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “ Holder ”) is entitled to purchase up to the number of fully paid and non-assessable shares of the above-stated Type/Series of Stock (the “ Class ”) of the above-named company (the “ Company ”) determined pursuant to Paragraph A below, at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.

 

A.            Number of Shares .  Upon the making, if any, of the first Term B Loan Advance (as defined in the Loan Agreement) to the Company in any amount, this Warrant automatically shall become exercisable for 5,750 shares of the Class, as such number may be adjusted from time to time in accordance with the provisions of this Warrant (the “ Shares ”), including, without limitation, adjustments in respect of events occurring prior to the date, if any, on which this Warrant becomes exercisable for such shares as if they constituted “Shares” hereunder for such purpose at all times from the Issue Date.

 

SECTION 1. EXERCISE .

 

1.1          Method of Exercise .  Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section

 

 

1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

 

1.2          Cashless Exercise .  On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised.  Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:

 

X =

Y(A-B)/A

 

where:

 

X =

the number of Shares to be issued to the Holder;

 

 

Y =

the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

 

 

A =

the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

 

 

B =

the Warrant Price.

 

1.3          Fair Market Value .  If shares of the Class are then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “ Trading Market ”), the fair market value of a Share shall be the closing price or last sale price of a share of the Class reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company.  If shares of the Class are not then traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.

 

1.4          Delivery of Certificate and New Warrant .  Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver, or cause to be delivered, to Holder a certificate, or evidence of a book-entry interest, representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.

 

1.5          Replacement of Warrant .  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.

 

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1.6          Treatment of Warrant Upon Acquisition of Company .

 

(a)           Acquisition .  For the purpose of this Warrant, “ Acquisition ” means any transaction or series of related transactions involving:  (i) the sale, lease, exclusive license (other than a license permitted under Section 7.1 of the Loan Agreement), or other disposition of all or substantially all of the assets of the Company; (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization (or, if such Company stockholders beneficially own a majority of the outstanding voting power of the surviving or successor entity as of immediately after such merger, consolidation or reorganization, such surviving or successor entity is not the Company); or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.

 

(b)           Treatment of Warrant at Acquisition .  In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “ Cash/Public Acquisition ”), and the fair market value of one Share as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date immediately prior to such Cash/Public Acquisition, and Holder has not exercised this Warrant pursuant to Section 1.1 or Section 1.2 above as to all Shares, then this Warrant shall automatically be deemed to be Cashless Exercised pursuant to Section 1.2 above as to all Shares not previously exercised effective immediately prior to and contingent upon the consummation of a Cash/Public Acquisition.  In connection with such Cashless Exercise, Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as of the date thereof and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon exercise.  In the event of a Cash/Public Acquisition where the fair market value of one Share as determined in accordance with Section 1.3 above would be less than the Warrant Price in effect immediately prior to such Cash/Public Acquisition, then this Warrant will expire immediately prior to the consummation of such Cash/Public Acquisition.

 

(c)           Upon the closing of any Acquisition other than a Cash/Public Acquisition, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.

 

(d)           As used in this Warrant, “ Marketable Securities ” means securities meeting all of the following requirements:  (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on

 

3

 

or prior to the closing thereof is then traded in a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition.

 

SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE .

 

2.1          Stock Dividends, Splits, Etc .  If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in additional shares of the Class or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased.  If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

 

2.2          Reclassification, Exchange, Combinations or Substitution .  Upon any event whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations, substitutions, replacements or other similar events.

 

2.3          No Fractional Share .  No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.

 

2.4          Notice/Certificate as to Adjustments .  Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and facts upon which such adjustment is based.  The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer or other Company officer having similar duties, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon the date of such adjustment.

 

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SECTION 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY .

 

3.1          Representations and Warranties .  The Company represents and warrants to, and agrees with, the Holder as follows:

 

(a)           [Reserved].

 

(b)           All Shares which may be issued upon the exercise of this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.  The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class and other securities as will be sufficient to permit the exercise in full of this Warrant.

 

3.2          Notice of Certain Events .  If the Company proposes at any time to:

 

(a)           declare any dividend or distribution upon the outstanding shares of the Class, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

 

(b)           offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);

 

(c)           effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class; or

 

(d)           effect an Acquisition or to liquidate, dissolve or wind up;

 

then, in connection with each such event, the Company shall give Holder notice thereof at the same time and in the same manner as Holder notifies the holders of the outstanding shares of the Class of such event.

 

SECTION 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER .

 

The Holder represents and warrants to the Company as follows:

 

4.1          Purchase for Own Account .  This Warrant and the Shares to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

 

4.2          Disclosure of Information .  Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the

 

5

 

offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

 

4.3          Investment Experience .  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

4.4          Accredited Investor Status .  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

 

4.5          The Act .  Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.

 

4.6          No Stockholder Rights .  Without limiting any provision of this Warrant, Holder agrees that as a Holder of this Warrant it will not have any rights (including, but not limited to, voting rights) as a stockholder of the Company with respect to the Shares issuable hereunder unless and until the exercise of this Warrant and then only with respect to the Shares issued on such exercise.

 

SECTION 5. MISCELLANEOUS .

 

5.1          Term; Automatic Cashless Exercise Upon Expiration .

 

(a)           Term .  Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.

 

(b)           Automatic Cashless Exercise upon Expiration .  In the event that, upon the Expiration Date, the fair market value of one Share as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares issued upon such exercise to Holder.

 

6

 

5.2          Legends .  Each certificate evidencing Shares shall be imprinted with a legend in substantially the following form:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO WESTRIVER INNOVATION LENDING FUND VIII, L.P. DATED JULY 25, 2019, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

5.3          Compliance with Securities Laws on Transfer .  This Warrant and the Shares issued upon exercise of this Warrant may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder, provided that such affiliate is an “accredited investor” as defined in Regulation D promulgated under the Act.

 

5.4          Transfer Procedure .  Subject to the provisions of Section 5.3 and upon providing the Company with written notice, Holder may transfer all or part of this Warrant or the Shares issued upon exercise of this Warrant to any transferee, provided, however, in connection with any such transfer, Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable); and provided further, that any transferee shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.

 

5.5          Notices .  All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3 rd ) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5.  All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

7

 

WestRiver Innovation Lending Fund VIII, L.P.

c/o Chief Financial Officer

WestRiver Group

920 5 th  Avenue, Suite 3450

Seattle, Washington 98104

Attention:  Trent Dawson

Telephone:  (425) 952-3951

Email:  tdawson@westrivermgmt.com

 

With a copy (which shall not constitute notice) to:

 

Perkins Coie LLP

1201 Third Avenue, Suite 4800

Seattle, Washington 98101-3099

Attention:  David C. Clarke

Telephone:  (206) 359-8612

Email:  dclarke@perkinscoie.com

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

 

Axsome Therapeutics, Inc.

Attn:  Chief Executive Officer

25 Broadway, 9 th  Floor

New York, NY 10004

Telephone:  (212) 332-3241

Facsimile:  (212) 320-0245

Email:  htabuteau@axsome.com

 

With a copy (which shall not constitute notice) to:

 

DLA Piper LLP (US)

Attn:  Emilio Ragosa, Esq.

51 John F. Kennedy Parkway, Suite 120

Short Hills, New Jersey 07078-2704

Facsimile:  (973) 215-2804

Email:  emilio.ragosa@dlapiper.com

 

5.6          Waiver .  This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

5.7          Attorneys’ Fees .  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

 

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5.8          Counterparts; Facsimile/Electronic Signatures .  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.  Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 

5.9          Governing Law .  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.

 

5.10        Headings .  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

 

5.11        Business Days .  “ Business Day ” is any day that is not a Saturday, Sunday or a day on which banks in Washington are closed.

 

[Remainder of page left blank intentionally]
[Signature page follows]

 

9

 

IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

 

“COMPANY”

 

 

 

AXSOME THERAPEUTICS, INC.

 

 

 

By:

/s/ Herriot Tabuteau

 

 

 

 

Name:

Herriot Tabuteau

 

 

(Print)

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

“HOLDER”

 

 

 

WESTRIVER INNOVATION LENDING FUND VIII, L.P.

 

 

 

By:  Loan Manager II, LLC, its general partner

 

 

 

By:

/s/ Trent Dawson

 

 

 

 

Name:

Trent Dawson

 

 

(Print)

 

 

 

 

Title:

Chief Financial Officer

 

 

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.             The undersigned Holder hereby exercises its right to purchase              shares of the Common/Series            Preferred [circle one] Stock of                   (the “ Company ”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:

 

o

 

check in the amount of $      payable to order of the Company enclosed herewith

 

 

 

o

 

Wire transfer of immediately available funds to the Company’s account

 

 

 

o

 

Cashless Exercise pursuant to Section 1.2 of the Warrant

 

 

 

o

 

Other [Describe]

 

2.             Please issue a certificate or certificates representing the Shares in the name specified below:

 

 

 

Holder’s Name

 

 

 

 

 

 

 

 

 

 

 

(Address)

 

 

3.             By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof.

 

 

HOLDER:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

(Date):

 

 

Appendix 1

Exhibit 99.1

 

 

 

Axsome Therapeutics Amends Silicon Valley Bank Loan Agreement Increasing Financial Flexibility

 

Extends interest-only period and time to access additional funding

 

NEW YORK, July 29, 2019 (Globe Newswire) — Axsome Therapeutics, Inc. (NASDAQ: AXSM), a clinical-stage biopharmaceutical company developing novel therapies for the management of central nervous system (CNS) disorders, announced that it has amended its existing $24 million term loan facility agreement led by Silicon Valley Bank (SVB). The amendment extends the interest-only payment period as well as the time for drawing down additional funding under the loan facility. These modifications are expected to further extend the Company’s cash runway, and provide additional financial flexibility.

 

Axsome entered into the $24 million loan agreement in March 2019. The amendment extends the interest-only payment period by a minimum of six months to 18 months, which may be further extended to 24 months should the Company elect to draw down an additional $4 million that remains unfunded under the loan agreement. The period to draw this remaining amount has also been extended to December 31, 2019, subject to the achievement of positive results, prior to this date, from the Company’s ongoing CONCERT Phase 2 trial of AXS-12 in narcolepsy sufficient to proceed to a Phase 3 trial. In consideration for the amendment, the final payment fee, payable upon the Company’s repayment of the loan, increased from 6.0% to 6.3% of the principal amount of the loan advances. All other terms and conditions from the original term loan agreement remain substantially unchanged. Additional details of the loan amendment will be filed with the Securities and Exchange Commission on a Current Report on Form 8-K.

 

About Axsome Therapeutics, Inc.

 

Axsome Therapeutics, Inc. is a clinical-stage biopharmaceutical company developing novel therapies for the management of central nervous system (CNS) disorders for which there are limited treatment options. Axsome’s core CNS product candidate portfolio includes four clinical-stage candidates, AXS-05, AXS-07, AXS-09, and AXS-12. AXS-05 is currently in a Phase 3 trial in treatment resistant depression (TRD), a Phase 3 trial in major depressive disorder (MDD), and a Phase 2/3 trial in agitation associated with Alzheimer’s disease (AD). AXS-05 is also being developed for smoking cessation treatment. AXS-07 is currently in a Phase 3 trial for the acute treatment of migraine. AXS-12 is currently in a Phase 2 trial in narcolepsy. The Axsome Pain and Primary Care business unit (Axsome PPC) houses Axsome’s pain and primary care assets, including AXS-02 and AXS-06, and intellectual property which covers these and related product candidates and molecules being developed by Axsome and others. AXS-02 is being developed for osteoporosis, the pain of knee osteoarthritis, and chronic low back pain. AXS-06 is being developed for osteoarthritis and rheumatoid arthritis. AXS-02, AXS-05, AXS-06, AXS-07, AXS-09, and AXS-12 are investigational drug products not approved by the FDA. For more information, please visit the Company’s website at axsome.com. The Company may occasionally disseminate material, nonpublic information on the company website.

 

Forward Looking Statements

 

Certain matters discussed in this press release are “forward-looking statements”. We may, in some cases, use terms such as “predicts,” “believes,” “potential,” “continue,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. In particular, the Company’s statements regarding trends and potential future results are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including, but not limited to, the success, timing and cost of our ongoing clinical trials and anticipated clinical trials for our current product candidates, including statements regarding the timing of initiation, pace of enrollment and completion of the trials, futility analyses and receipt of interim results, which are not necessarily indicative of the final results of our ongoing clinical trials, and the number or type of studies or nature of results necessary to support the filing of a new drug application (“NDA”) for any of our current product candidates; our ability to fund additional clinical trials to continue the advancement of our product candidates; the timing of and our ability to obtain and maintain U.S. Food and Drug Administration (“FDA”) or other regulatory authority approval of, or other action with respect to, our product candidates (including, but not limited to, FDA’s agreement with the Company’s plan to discontinue the bupropion treatment arm of the ADVANCE-1 study in accordance with the independent data monitoring committee’s recommendations); the potential for the ASCEND clinical trial to provide

 

1

 

a basis for approval of AXS-05 for the treatment of major depressive disorder and accelerate its development timeline and commercial path to patients; the Company’s ability to successfully defend its intellectual property or obtain the necessary licenses at a cost acceptable to the Company, if at all; the successful implementation of the Company’s research and development programs and collaborations; the success of the Company’s license agreements; the acceptance by the market of the Company’s product candidates, if approved; the Company’s anticipated capital requirements; and other factors, including general economic conditions and regulatory developments, not within the Company’s control. The factors discussed herein could cause actual results and developments to be materially different from those expressed in or implied by such statements. The forward-looking statements are made only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstance.

 

Axsome Contact:

 

Mark Jacobson

 

Senior Vice President, Operations

 

Axsome Therapeutics, Inc.

 

200 Broadway, 3 rd  Floor

 

New York, NY 10038

 

Tel: 212-332-3243

 

Email: mjacobson@axsome.com

 

www.axsome.com

 

 

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