Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 3,
2010
INVIVO
THERAPEUTICS HOLDINGS CORP.
(Exact
name of registrant as specified in its charter)
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Nevada
(State
or other jurisdiction of incorporation)
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000-52089
(Commission
File No.)
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36-4528166
(IRS
Employer Identification
No.)
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One
Broadway, 14th
Floor
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Cambridge,
Massachusetts
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02142
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(Address
of principal executive offices)
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(Zip
Code)
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(617)
475-1520
(Registrant’s
telephone number, including area code)
Design
Source, Inc., 100 Europa Drive, Suite 455, Chapel Hill, NC 27517
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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))
Item
1.01 Entry into a Material Definitive
Agreement.
On
November 10, 2010 and December 3, 2010, InVivo Therapeutics Holdings Corp., a
Nevada corporation (the “Company”), completed the final two closings
(collectively, the “Additional Closings”) of its recently announced private
placement of equity securities. At the Additional Closings, the
Company offered and sold an aggregate of 2,485,903 units (“Units”), at a price
of $1.00 per Unit, to accredited investors (as defined under Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended (the “1933
Act”)). Each Unit consists of one share of Common Stock of the Company, $0.00001
par value per share (the “Common Stock”), and a warrant to purchase one share of
Common Stock. Each investor entered into a Subscription Agreement
(each, a “Subscription Agreement”) with the Company in connection with each
person’s investment at the Additional Closings. The warrants (the
“Investor Warrants”) are exercisable for a period of five years at a purchase
price of $1.40 per share of Common Stock.
The
Company intends to use the net proceeds of approximately $2,157,106 from the
Additional Closings for working capital and general corporate
purposes.
As was
previously announced, on October 26, 2010, the Company completed the first
closing of the private placement of Units, at which 10,514,097 Units at a price
of $1.00 per Unit were sold to accredited investors for total cash consideration
of $10,514,097, which included the conversion of $504,597 of outstanding
principal and accrued interest under certain bridge notes.
The
offer, sale and issuance to the investors of the shares of units and the
shares of Common Stock issuable upon the exercise of the Investor Warrants at
the Additional Closings have been made in reliance on the statutory exemption
from registration in Section 4(2) of the 1933 Act and/or Rule 506 of
Regulation D and Regulation S promulgated thereunder, have not been registered
under the 1933 Act, and, unless so registered, may not be offered or sold in the
United States, except pursuant to an applicable exemption from the registration
requirements of the 1933 Act and applicable state securities laws.
The
Company paid Spencer Trask Ventures, Inc., its placement agent, a cash
commission of 10% of the funds raised from such investors at the Additional
Closings. In addition, the placement agent received a non-accountable expense
allowance equal to 3% of the proceeds raised in the Additional Closings as well
as warrants to purchase a number of shares of Common Stock equal to 20% of the
Units sold to investors in the Additional Closings. As a result of the foregoing
arrangement, at the Additional Closings, the placement agent was paid
commissions and expenses of $323,127 and was issued warrants to purchase (i)
497,181 shares of Common Stock at an exercise price of $1.00 per share and (ii)
497,181 shares of Common Stock at an exercise price of $1.40 per share. The
warrants issued to the placement agent have no registration rights and contain
weighted average anti-dilution and immediate cashless exercise
provisions.
For all
three closings, the Company raised total gross proceeds of $13 million and total
net proceeds of $10,913,954. The Company issued 13 million shares and 13 million
warrants exercisable at $1.40 to investors in the private placement. The
placement agent was paid total cash consideration of $1,690,000 and was issued
warrants to purchase 2,600,000 shares of Common Stock at an exercise price of
$1.00 per share and warrants to purchase 2,600,000 shares of Common
Stock at an exercise price of $1.40 per share.
The
Company entered into a registration rights agreement with the investors at the
Additional Closings. Under the terms of the registration rights agreement, the
Company agreed to file a registration statement covering the resale of the
Common Stock underlying the Units and the Common Stock that is issuable on
exercise of the Investor Warrants (but not the Common Stock that is issuable
upon exercise of the warrants issued as compensation to the placement agent in
connection with the Additional Closings) within 90 days from the final closing
date of the private placement (the “Filing Deadline”), and shall use
commercially reasonable efforts to cause the registration statement to become
effective no later than 180 days after it is filed (the “Effectiveness
Deadline”).
The
Company agreed to use reasonable efforts to maintain the effectiveness of the
registration statement through the one year anniversary of the date the
registration statement is declared effective by the Securities and Exchange
Commission, or until Rule 144 of the 1933 Act is available to investors in the
Offering with respect to all of their shares, whichever is earlier. If the
Company does not meet the Filing Deadline or Effectiveness Deadline, the Company
will be liable for monetary penalties equal to one-half of one percent (0.5%)
of each investor’s investment in the offering on every thirty (30) day
anniversary of such Filing Deadline or Effectiveness Deadline failure until such
failure is cured. The payment amount shall be prorated for partial thirty (30)
day periods. The maximum aggregate amount of payments to be made by the Company
as the result of such shall be an amount equal to 9% of each investor’s
investment amount. Notwithstanding the foregoing, no payments shall be owed with
respect to any period during which all of the investor’s registrable securities
may be sold by such investor under Rule 144 or pursuant to another exemption
from registration.
Moreover,
no such payments shall be due and payable with respect to any registrable
securities the Company is unable to register due to limits imposed by the SEC’s
interpretation of Rule 415 under the 1933 Act. The holders of any registrable
securities removed from the registration statement as a result of a Rule 415 or
other comment from the SEC shall have “piggyback” registration rights for those
shares of Common Stock with respect to any registration statement filed by the
Company following the effectiveness of the registration statement which would
permit the inclusion of these shares.
Each
Investor Warrant entitles the holder to purchase one share of Common Stock at a
purchase price of $1.40 during the five (5) year period commencing on the
issuance of the Investor Warrants. The Investor Warrants may be called by the
Company at any time the Common Stock trades above $2.80 for twenty (20)
consecutive days following the effectiveness of the registration statement
covering the resale of the shares underlying the Investor Warrant. The Investor
Warrants can only be called if a registration statement registering the shares
underlying the Investor Warrants is in effect at the time of the
call.
The
Investor Warrants, at the option of the holder, may be exercised by cash payment
of the exercise price to the Company. The Investor Warrants may be exercised on
a cashless basis commencing one year after issuance if no registration statement
registering the shares underlying the Investor Warrants is then in
effect. The placement agent shall receive a warrant solicitation fee
equal to 5% of the funds solicited by the placement agent upon exercise of the
Investor Warrants if the Company elects to call the Investor Warrants. The
exercise price and number of shares of Common Stock issuable on exercise of the
Investor Warrants may be adjusted in certain circumstances including a weighted
average adjustment in the event of future issuances of the Company’s equity
securities at a price less than the exercise price of the Investor Warrant, in
the event of a stock dividend, or our recapitalization, reorganization, merger
or consolidation.
This
Current Report on Form 8-K is neither an offer to sell nor a solicitation of an
offer to buy any of the securities described herein. This Current Report on Form
8-K is being filed pursuant to and in accordance with Rule 135c of the 1933
Act.
The
foregoing descriptions of the registration rights agreement, Investor Warrants,
Subscription Agreement and placement agent warrants and the transactions
contemplated therein and thereby, do not purport to be complete and are
qualified in their entirety by reference to the full text of such agreements,
instruments and documents, which are filed herewith or incorporated herein by
reference from other filings with the Securities and Exchange Commission, each
of which is incorporated herein by reference.
Item 3.02. Unregistered
Sales of Equity Securities.
The
information disclosed under Item 1.01 above is incorporated herein by
reference.
Item 9.01. Financial
Statements and Exhibits.
(d)
Exhibits
The
exhibits listed in the Exhibit Index below are filed with this
report.
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.
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InVivo
Therapeutics Holdings Corp.
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Date: December
9, 2010
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By:
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/s/ Frank
M. Reynolds
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Frank
M. Reynolds
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Chief
Executive Officer
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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4.1
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Form
of Investor Warrant of InVivo Therapeutics Holdings Corp., filed as
Exhibit 4.3 with the Company’s Current Report on Form 8-K dated October
26, 2010 (File No. 000-52089), which is incorporated herein by
reference.
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4.2
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Form
of Warrant of InVivo Therapeutics Holdings Corp. ($1.00 exercise price)
issued to Placement Agent.
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4.3
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Form
of Warrant of InVivo Therapeutics Holdings Corp. ($1.40 exercise price)
issued to Placement Agent.
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10.1
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Form
of Subscription Agreement, by and between InVivo Therapeutics Holdings
Corp. and the investors in the offering.
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10.2
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Form
of Registration Rights Agreement, by and between InVivo Therapeutics
Holdings Corp. and the investors in the offering., filed as Exhibit 10.4
with the Company’s Current Report on Form 8-K dated October 26, 2010 (File
No. 000-52089), which is incorporated herein by
reference.
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10.3
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Finder’s
Fee Agreement dated August 18, 2010, between InVivo Therapeutics Corp. and
Placement
Agent.
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10.4
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Placement
Agent Agreement dated October 4, 2010, among InVivo Therapeutics
Corp., Design Source, Inc. and Placement Agent.
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10.5
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Finder’s
Fee Agreement dated October 26, 2010, between InVivo Therapeutics Corp.
and Placement Agent.
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| 10.6 |
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Master
Services Agreement dated October 26, 2010, between InVivo Therapeutics
Corp. and Placement Agent.
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| 10.7 |
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Form
of Lock-Up Agreement. |
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| 99.1 |
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Press
Release of the Company, dated December 6,
2010. |