Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On October 1, 2019,
Constellation Pharmaceuticals, Inc., a Delaware corporation (the Company), entered into a securities purchase agreement (the Securities Purchase Agreement) with accredited investors (the Investors), pursuant
to which the Company agreed to issue and sell to the Investors in a private placement an aggregate of 7,647,057 shares of the Companys common stock, par value $0.0001 per share (the Shares), at a price of $8.50 per share (the
Offering). The Offering is expected to close on or about October 3, 2019, subject to the satisfaction of certain customary closing conditions.
The Company expects to receive aggregate gross proceeds from the Offering of approximately $65 million, before deducting offering expenses. The Company
intends to use the net proceeds to fund research and development expenses, including the clinical development of CPI-0610, CPI-1205 and
CPI-0209, to advance the current pipeline of preclinical candidates, to discover and develop additional preclinical product candidates using its platform, as well as for working capital and other general
corporate purposes. The Company believes that the net proceeds of the Offering, together with its existing cash and cash equivalents, will enable it to fund its planned operating and capital expenditures into the first half of 2021. The Company
based this estimate on assumptions that may prove to be wrong, and could use its available capital resources sooner than expected.
The Company has
granted the Investors indemnification rights with respect to its representations, warranties, covenants and agreements under the Securities Purchase Agreement.
Registration Rights Agreement
Also on October 1,
2019, the Company entered into a registration rights agreement (the Registration Rights Agreement) with the Investors, pursuant to which the Company agreed to register for resale the Shares. Under the Registration Rights Agreement,
the Company has agreed to file a registration statement covering the resale by the Investors of their Shares (the Registrable Securities) within 75 days following the closing of the Offering. The Company has agreed to use
commercially reasonable efforts to cause such registration statement to be declared effective as soon as practicable and to keep such registration statement effective until the date the Shares covered by such registration statement have been sold or
cease to be Registrable Securities. The Company has agreed to be responsible for all fees and expenses incurred in connection with the registration of the Registrable Securities.
In the event (i) the registration statement has not been filed within 75 days following the closing date, (ii) the registration statement is not
declared effective prior to the earlier of (a) five business days after the date on which the Company is notified by the Securities and Exchange Commission (the SEC) that the registration statement will not be reviewed by the SEC
staff or is not subject to further comment by the SEC staff, (b) the 90th day following the closing date, if the SEC staff determines not to review the registration statement, or (c) the
120th day following the closing date, if the SEC staff determines to review the registration statement, or (iii) after the registration statement has been declared effective by the SEC, sales
cannot be made pursuant to the registration statement for any reason, subject to certain limited exceptions, then the Company has agreed to make pro rata payments to each Investor as liquidated damages in an amount equal to 1% of the aggregate
amount invested by each such Investor in the Registrable Securities per 30-day period or pro rata for any portion thereof for each such month during which such event continues, subject to certain limits set
forth in the Registration Rights Agreement.
The Company has granted the Investors customary indemnification rights in connection with the registration
statement. The Investors have also granted the Company customary indemnification rights in connection with the filing of the registration statement.
The
foregoing descriptions of the Securities Purchase Agreement and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Securities Purchase Agreement and the
Registration Rights Agreement, copies of which are filed as Exhibits 10.1 and 10.2 hereto, respectively, and incorporated by reference herein.
The
representations, warranties and covenants contained in the Securities Purchase Agreement and the Registration Rights Agreement were made solely for the benefit of the parties thereto and the placement agent expressly named as a third-party
beneficiary thereto and may be subject to limitations agreed upon by the contracting parties. Accordingly, the Securities Purchase Agreement and the Registration Rights Agreement are incorporated herein by reference only to provide investors with
information regarding the terms thereof and not to provide investors with any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Companys periodic reports and other
filings with the SEC.