Item 1.01. Entry into a
Material Definitive Agreement.
Common Stock and Warrant Private Placement
On
October 21, 2016, MetaStat, Inc. (the “Company”)
entered into a subscription agreement (the “Subscription
Agreement”) with a number of accredited investors
(collectively, the “Investors”) pursuant to which the
Company may sell up a maximum of 2,000 units, with each unit
consisting of (i) 5,000 shares of the Company’s common stock,
par value $0.0001 per share (the “Common Stock”), at an
effective price of $2.00 per share (the “Effective
Price”), and (ii) and five-year warrants (the
“Warrants”) to purchase 2,500 shares of Common Stock
(the “Warrant Shares”), at a purchase price of $3.00
per share (the “Private Placement”). For the benefit of
certain Investors that would be deemed to have beneficial ownership
in excess of 4.99% or 9.99%, the Company may issue shares of a
newly created convertible preferred stock, classified as Series A-2
Convertible Preferred Stock (the “Series A-2
Preferred”), in lieu of issuing to such Investors shares of
Common Stock in the Private Placement. Each share of Series A-2
Preferred is convertible into 10 shares of Common Stock (the
“Conversion Shares”). The offering price is $10,000 per
unit.
Pursuant
to this final closing of the Private Placement under the
Subscription Agreement on October 21, 2016, the Company issued an
aggregate of 116.5 units consisting of 582,500 shares of Common
Stock and 291,250 Warrants, for an aggregate purchase price of
$1,165,000. After deducting placement agent fees and other offering
expenses, the Company received net proceeds of approximately
$1,070,000. Additionally, the Company issued 5 units consisting of
25,000 shares of Common Stock and 12,500 Warrants to a Company
vendor for the cancellation of $50,000 of accounts receivable due
to the vendor by the Company. Alere Financial Partners, a division
of Cova Capital Partners, LLC (the “Placement Agent”),
acted as placement agent in connection with the Private Placement.
In connection with the final closing of the Private Placement, the
Company will issue the Placement Agent an aggregate of 46,600
placement agent warrants in substantially the same form as the
Warrants.
In
aggregate, pursuant to all closings in the Private Placement, the
Company issued an aggregate of 265.25 units consisting of 843,250
shares of Common Stock, 48,300 shares of Series A-2 Preferred,
convertible into 483,000 shares of Common Stock, and 663,125
Warrants, for an aggregate purchase price of $2,602,500, plus the
cancellation of $50,000 of accrued payables. After deducting
placement agent fees and other offering expenses, the Company
received net proceeds of approximately $2.37 million. Additionally,
the Company issued the Placement Agent an aggregate of 46,600
placement agent warrants in substantially the same form as the
Warrants.
Certain
holders of the Company’s outstanding promissory notes and
Series B Convertible Preferred Stock have the right, pursuant to
the terms of the outstanding securities, to exchange their
securities for the securities issued in the Private
Placement.
Exchange of Debt into Common Stock and Warrants
Pursuant
to the amendment, dated February 12, 2016, between the Company and
Dolphin Offshore Partners, L.P. (“Dolphin”), that
amended certain terms of the existing promissory note issued to
Dolphin, dated July 31, 2015, in the aggregate principal amount of
$1,200,000 (the “Existing Promissory Note”), the
Private Placement has triggered the voluntary exchange of $600,000
principal amount plus $48,000 of accrued and unpaid interest of the
Existing Promissory Note into the securities issued in the Private
Placement (the “Note Exchange”).
The
foregoing description of the Private Placement and related
transactions does not purport to be complete and is qualified in
its entirety by reference to the complete text of the (i) form of
Subscription Agreement filed as Exhibit 10.1 hereto; (ii) form of
Registration Rights Agreement filed as Exhibit 10.2 hereto, (iii)
form of Warrant issued in connection with the Private Placement
filed as Exhibit 4.1 hereto, and (iv) form of Series A-2
Convertible Preferred Stock Certificate of Designation as Exhibit
4.2 hereto. For a more complete description of the terms of the
Private Placement, please see the Company’s Current Report on
Form 8-K filed with the Securities and Exchange Commission on
October 17, 2016.
