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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 7, 2017
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Citius Pharmaceuticals, Inc. |
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(Exact name of registrant as specified in its charter) |
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Nevada
(State or other jurisdiction of incorporation)
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333-206903 |
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27-3425913 |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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11 Commerce Drive, 1st Floor Cranford, NJ |
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07016 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant's telephone number, including area code (908) 967-6677
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ 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 ¨
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.
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Item 1.01. Entry into a Material Definitive Agreement.
On June 7, 2017, Citius Pharmaceuticals, Inc. (the “ Company ”) and Garden State Securities, Inc. (“ GSS ”) entered into a Release Agreement (the “ GSS Release ”). The Company retained GSS as an exclusive placement agent in connection with a private placement completed in February 2017 (the “ Private Offering ”). Pursuant to the GSS Release, GSS (i) consented to any future financings of the Company, thereby waiving certain covenants included in the Unit Purchase Agreements (the “ Unit Purchase Agreements ”) entered into in connection with the Private Offering that restricted the Company from selling debt or equity securities, at fixed or variable prices or any combination thereof, at a price below $6.00 per share (the “ Price Limit ”), the price of the units sold in the Private Offering as adjusted for the reverse stock split effected on June 9, 2017 (the “ Restrictions ”); and (ii) upon the closing of a public financing that lists the Company on a national stock exchange (the “ Uplisting Financing ”), released the Company from its obligation to pay GSS a cash fee of ten percent (10%) of the amount raised in any future financing from any investors contacted by GSS during the Private Offering. As consideration to GSS for entering into the GSS Release, the Company issued 100,000 shares of restricted common stock to GSS (the “ Equity ”).
On June 8, 2017, the Company and the investors in the Private Offering entered into Release Agreements (the “ Investor Releases ”) pursuant to which each investor agreed to release the Company from the Restrictions set forth in the Unit Purchase Agreements. In exchange, the Company agreed that (i) in the event that an Uplisting Financing is conducted at a price per share or price per unit lower than the Price Limit (the “ Lower Recent Price ”), then the Company will issue additional shares to each investor sufficient to effectively reprice the sale of units to the Lower Recent Price; (ii) in the event that the Uplisting Financing is conducted at a price per share or price per unit of less than the exercise price of the warrants issued in the Private Offering ($8.25 per share as adjusted for the reverse stock split effected on June 9, 2017), then the exercise price shall be reduced to the Lower Recent Price; and (iii) the Company will give each investor no less than 6 hours of notice before the closing of any subsequent financing, through and including the Uplisting Financing, and each investor shall have a 6-hour option to purchase up to 20% of the securities sold in such offering;
The forgoing description is a summary only, does not purport to set forth the complete terms of the GSS Release or Investor Releases, and is qualified in its entirety by reference to the GSS Release and Form of Investor Release filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 of this Current Report on Form 8-K regarding the GSS Release and Equity is incorporated herein by reference.
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Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
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Exhibit No. |
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Description of Exhibit |
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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.
| CITIUS PHARMACEUTICALS, INC. | |||
| Date: June 13, 2017 | By: | /s/ Myron Holubiak | |
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Myron Holubiak | |
| President and Chief Executive Officer | |||
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EXHIBIT 10.1
RELEASE AGREEMENT
This Release Agreement (“ Release ) by and between Citius Pharmaceuticals, Inc., (“ CITIUS ”) and Garden State Securities, Inc. (“ GSS ” and together with Citius, each a “ Party ” and collectively the “ Parties ”) is dated and effective as of the 7th day of June, 2017.
WHEREAS, CITIUS and GSS are Parties to that certain Engagement Letter Agreement dated August 16, 2016 (the “ Letter Agreement ”);
WHEREAS, pursuant to the terms of the Letter Agreement, CITIUS retained GSS as an exclusive placement agent for the Services (as defined in the Letter Agreement) for CITIUS in connection with a private placement of securities (the “2016 Offering” ) pursuant to a form of Unit Purchase Agreement (the “ Unit Purchase Agreement ”).
WHEREAS, GSS began providing the Services to CITIUS in August 2016;
WHEREAS, GSS began marketing a Private Placement Memorandum, the (“ PPM ”), in October 2016 in connection with the 2016 Offering, for gross proceeds up to $6,000,000 dollars in purchase of a Unit or Units, with each Unit being defined as one (1) share of common stock and one (1) warrant at a price of $0.40 cents per Unit with each warrant having an exercise price of $0.55 cents for a period of five (5) years.
WHEREAS, GSS sold 1,920,000 total units for gross proceeds of $768,100.
WHEREAS, CITIUS terminated the Agreement in March 2017.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Parties hereby agree as follows:
1. Release of all obligations under Item (5) Future Financings . The Parties acknowledge and agree that CITIUS is released from any and all obligations in Item (5) in the Letter Agreement and may sell securities to any party with no fee obligation to GSS.
2. Consent under Item 6.13 and 6.14 . GSS hereby irrevocably consents to the consummation of any financing or event requiring GSS’s consent under Item 6.13 and 6.14 of the Unit Purchase Agreement.
2. Consideration for Release . CITIUS agrees that in exchange for the release and consent above it will issue 100,000 shares of restricted common equity to GSS (the “ Consideration ”).
[ Signature Page Follows ]
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IN WITNESS WHEREOF, the parties have executed this Release Agreement to be executed as of the day and year first above written.
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CITIUS PHARMCEUTICALS, INC. |
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By: |
/s/ Myron Holubiak |
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Name: |
Myron Holubiak |
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Title: |
Chief Executive Officer |
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GSS CAPITAL MARKETS, LLC |
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By: |
/s/ Ernest Pelligrino |
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Name: |
Ernest Pelligrino |
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Title: |
Executive Managing Director |
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[Signature Page to Release Agreement]
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EXHIBIT 10.2
RELEASE AGREEMENT
This Release Agreement (“ Release ) by and between Citius Pharmaceuticals, Inc., (“ CITIUS ”) and [______] (the “ Investor ”) is dated and effective as of the 8th day of June, 2017.
WHEREAS, CITIUS and Garden State Securities Inc., (“ GSS ”) are parties to that certain Engagement Letter Agreement dated August 16, 2016 (the “ Letter Agreement ”);
WHEREAS, pursuant to the terms of the Letter Agreement, CITIUS retained GSS as an exclusive placement agent for the Services (as defined in the Letter Agreement) for CITIUS in connection with a private placement of securities the ( “2016 Offering” ).
WHEREAS, GSS began marketing a Private Placement Memorandum (“ PPM ”) and form of Unit Purchase Agreement (the “Unit Purchase Agreement ”) in October 2016 in connection with the 2016 Offering, for gross proceeds up to $6,000,000 dollars in purchase of a Unit (“ Units ”), with each Unit being defined as one (1) share of common stock and one (1) warrant at a price of $0.40 per Unit (the “ Unit Price ”) with each warrant having an exercise price of $0.55 (the “ Exercise Price ”) with a term of five (5) years.
WHEREAS, Investor purchased 250,000 Units via the Unit Purchase Agreement.
WHEREAS, CITIUS plans another fundraising which will include being listed to the NASDAQ or NYSE (the “ Uplisting Financing ”).
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, CITIUS and Investor hereby agree as follows:
1. Release from Additional Covenants . Both CITIUS and Investor acknowledge and agree that CITIUS is released from any and all obligations related to the Additional Covenants in the PPM and Investor waives any restriction of CITIUS to sell debt or equity, fixed or variable priced or any combination thereof, at a price below the Unit pricing set forth in the Unit Purchase Agreement.
2. Release on Restricted Transactions. Both CITIUS and Investor acknowledge and agree that CITIUS is released from any and all obligations related to 6.13 Restricted Transactions in the Unit Purchase Agreement and Investor waives any restriction on the ability to issue securities senior to the common stock, or issue any securities at a price below $0.40 cents per share.
3. Release on Prohibition on Variable Priced Securities. Both CITIUS and Investor acknowledge and agree that CITIUS is released from any and all obligations related to 6.14 Prohibition on Variable Priced Securities in the Unit Purchase Agreement and Investor waives any restriction on the ability to issue any security, debt equity or combination thereof, at a variable price.
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4. Consideration for Releases . CITIUS further agrees that in exchange for the Release from Additional Covenants, Restricted Transactions, and Prohibition on Variable Priced Securities, to do as follows:
a. In the event that the Uplisting Financing is conducted at a price per share or price per unit of less than the Unit Price (the “ Lower Recent Price ”), then CITIUS will issue additional shares and warrants to Investor sufficient to effectively reprice the sale of Units to the Lower Recent Price.
b. In the event warrants are issued in the Uplisting Financing with an exercise price below the Exercise Price (the “ Uplisting Warrant Price ”), then the Exercise Price shall be reduced to the Uplisting Warrant Price.
c. CITIUS will give Investor no less than 6 hours of notice before the closing of any subsequent financing, through and including the Uplisting Financing, and Investor shall have a 6-hour option to purchase up to 20% of the securities sold in such offering .
[ Signature Page Follows ]
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IN WITNESS WHEREOF, the parties have executed this Release Agreement to be executed as of the day and year first above written.
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CITIUS PHARMCEUTICALS, INC. |
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By: |
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INVESTOR |
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By: |
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[Signature Page to Release Agreement]
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