Azimuth Opportunity agrees to purchase stock over 24 months
By Susanna Moon
Chicago, July 23 - Alexza Pharmaceuticals, Inc. secured a purchase agreement with Azimuth Opportunity LP on July 20 to sell the investor $20 million of stock over 24 months.
Under the agreement, the company may sell up to 2,310,811 shares, which is equal to 20% of its issued and outstanding shares as of the purchase agreement, less (i) one share and (ii) the 80,429 commitment shares it agreed to issue to Azimuth on July 23 for the execution and delivery of the purchase agreement, according to an 8-K filing with the Securities and Exchange Commission.
Financial West Group is the placement agent.
The trading market limit will not be applicable as long as the average purchase price of all common stock issued to Azimuth is at least $3.86 per share, which represents (i) the consolidated closing bid price per share of the common stock as reported on the Nasdaq the date of the purchase agreement and (ii) an incremental amount to account for the issuance of the commitment shares to Azimuth, the filing noted.
From time to time over the term of the purchase agreement, the company may present Azimuth with drawdown notices to purchase a total dollar amount of its stock over 10 consecutive trading days or another period mutually agreed upon, with each drawdown subject to limitations based on the price of the stock and a limit of 2.5% of the company's market capitalization at the time of the drawdown.
The company may present Azimuth with up to 24 drawdown notices during the term of the purchase agreement, with only one drawdown notice allowed per drawdown period and a minimum of five trading days required between each period. The commitment shares are being issued in addition to the up to $20 million of stock that may be issued under the purchase agreement under the drawdown notices.
Once presented with a drawdown notice, Azimuth is required to purchase a pro rata portion of the drawdown amount on each trading day during the period on which the daily volume-weighted average price for the stock equals or exceeds a threshold price determined by the company for the drawdown.
The purchase price per share for these shares equals the daily VWAP of the stock on each date during the drawdown period on which shares are purchased, less a discount of 5%. If the daily VWAP of the company's stock falls below the threshold price on any trading day during a drawdown period, Azimuth will not be required to purchase the pro rata portion of the drawdown amount allocated to that day. However, at its election, Azimuth may buy the pro rata portion of the drawdown amount that day at the threshold price less the 5% discount.
The company may also grant Azimuth the right to exercise options to purchase additional shares of stock during each drawdown period for an amount of shares based on the trading price of the stock. Upon Azimuth's exercise of that option, the company will sell to Azimuth the shares subject to the option at a price per share equal to the greater of the daily VWAP on the day Azimuth notifies the company of its election to exercise its option or the threshold price for the option determined by the company, less a discount of 5%.
The facility replaces a similar facility that was established in May 2010 and expired after its 24-month term, according to a company press release. No shares were issued under the previous facility.
"This flexible financing facility is an important component of our portfolio of financing options, giving us the potential ability to raise capital efficiently by potentially issuing shares in multiple tranches at times of our choosing over the next 24 months," Thomas B. King, president and chief executive officer of Alexza, said in the release.
"We believe this facility benefits Alexza and our stockholders, as we continue to plan our transition from a development stage company into the commercialization of Adasuve (Staccato loxapine)."
Alexza is a Mountain View, Calif., pharmaceutical company.
| Issuer: | Alexza Pharmaceuticals, Inc.
|
| Issue: | Stock purchase agreement
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| Amount: | $20 million
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| Shares: | Up to 2,310,811 shares
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| Warrants: | No
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| Agent: | Financial West Group
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| Pricing date: | July 20
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| Stock symbol: | Nasdaq: ALXA
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| Stock price: | $3.61 at close Feb. 16
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| Market capitalization: | $43.40 million
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