Obalon Therapeutics (NSDQ:OBLN) announced that it entered into a new purchase agreement with Lincoln Park Capital Fund that will see a previously agreed purchase of $20 million of Obalon’s common stock drop to $15 million.
The new purchase agreement between the two companies is replacing the existing deal from Dec. 27, 2018. The previous agreement has been terminated, effective on Feb. 5.
Obalon has the right, but not the obligation, under the new agreement to sell to Lincoln Park, while Lincoln Park is obligated to purchase up to $15 million of Obalon’s commons tock. Sales of the common stock may occur from time to time at Obalon’s discretion over a 36-month period.
On any business day picked by Obalon, the company may direct Lincoln Park to purchase up to 150,000 shares of common stock. In each case, Lincoln Park’s maximum commitment in any single regular purchase may not exceed $1 million, according to an SEC filing.
According to the rules of the Nasdaq market, Obalon is not permitted to sell more than 19.99% (more than 1.5 million) of its common stock shares before the execution of the purchase agreement without stockholder approval. Lincoln Park has no right to require the sale of Obalon’s stock, but it is obligated to make purchases as Obalon instructs.
Obalon agreed with Lincoln Park that there will be no “variable rate” transactions with any third party for a period defined in the purchase agreement. The San Diego-based obesity treatment maker also paid Lincoln Park $150,000 in cash as a reimbursement for expenses incurred in connection with the deal.
Obalon develops and markets a swallowable intragastric balloon system for the treatment of obesity.