Item 1.01 Entry Into a Material Definitive
Agreement.
On September 20, 2018,
Bio-Path Holdings, Inc. (the “Company”) and certain institutional and accredited investors entered into securities
purchase agreements (the “Purchase Agreements”), pursuant to which the Company agreed to sell, in a registered direct
offering (the “Registered Direct Offering”), an aggregate of 1,969,077 shares (the “Shares”) of its
common stock, par value $0.001 per share (“Common Stock”), for a purchase price per Share of $0.65 and gross proceeds
of approximately $1.3 million.
In addition, the Company
also agreed to sell in the Registered Direct Offering warrants to purchase up to 292,461 shares of Common Stock (the “Pre-Funded
Warrants”) for a purchase price per Pre-Funded Warrant of $0.64 and gross proceeds of approximately $0.2 million. The Pre-Funded
Warrants are being offered and sold to investors whose purchase of Shares in the Registered Direct Offering would otherwise result
in such investor, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election
of such investor, 9.99%) of the Company’s outstanding Common Stock immediately following the consummation of the Registered
Direct Offering. Each Pre-Funded Warrant is immediately exercisable for one share of Common Stock at an exercise price of $0.01
per share and may be exercised at any time until exercised in full. The number of shares issuable upon exercise of the Pre-Funded
Warrants and the exercise price of the Pre-Funded Warrants are adjustable in the event of stock splits, stock dividends, combinations
of shares and similar recapitalization transactions.
The Shares, the Pre-Funded
Warrants and the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants (the “Pre-Funded Warrant Shares”)
will be issued pursuant to a prospectus supplement dated as of September 20, 2018, which was filed with the Securities and Exchange
Commission in connection with a takedown from the Company’s shelf registration statement on Form S-3 (File No. 333-215205),
which became effective on January 9, 2017, and the base prospectus dated as of January 9, 2017 contained in such registration statement.
In a concurrent private
placement (the “Private Placement”), the Company has also agreed pursuant to the Purchase Agreements to issue to the
investors in the Registered Direct Offering warrants to purchase up to 2,261,538 shares of Common Stock (the “Series A Warrants”),
which represent 100% of the number of shares of Common Stock and shares of Common Stock issuable upon exercise of the Pre-Funded
Warrants purchased in the Registered Direct Offering. Subject to certain ownership limitations, the Series A Warrants will be exercisable
beginning six months after issuance, have a term of five and one-half years from issuance and have an exercise price of $0.96 per
share. The number of shares issuable upon exercise of the Series A Warrants and the exercise price of the Series A Warrants are
adjustable in the event of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.
Neither the Series A Warrants
nor the shares of Common Stock issuable upon exercise of the Series A Warrants (the “Series A Warrant Shares”)
will be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws.
The Series A Warrants and the Series A Warrant Shares will be issued in reliance on the exemptions from registration provided by
Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder. The investors who entered into to the Purchase
Agreements have represented that they are accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities
Act.
On July 25,
2018, the Company entered into an engagement letter (the “Engagement Letter”) with H.C. Wainwright & Co., LLC
(the “Placement Agent”), pursuant to which the Placement Agent agreed to serve as the exclusive placement agent
for the Company, on a reasonable best efforts basis, in connection with the Registered Direct Offering and the Private
Placement. The Company has agreed to pay the Placement Agent an aggregate cash fee equal to 7.0% of the gross proceeds
received in the Registered Direct Offering and the Private Placement. In addition, the Company has agreed to grant to the
Placement Agent warrants to purchase up to 135,692 shares of Common Stock (the “Placement Agent Warrants”) in a
private placement. The terms of the Placement Agent Warrants are substantially the same as the terms of the Series A
Warrants, except they have a term of five years from the effective date of the Registered Direct Offering. The Company will
also reimburse the Placement Agent $35,000 for non-accountable expenses and $30,000 for fees and expenses of legal
counsel and other out-of-pocket expenses.
The issuance of the Placement
Agent Warrants will not be registered under the Securities Act or any state securities laws. The Placement Agent Warrants will
be issued in reliance on the exemptions from registration provided by Section 4(a)(2) under the Securities Act and Regulation D
promulgated thereunder. The Placement Agent has represented that it is an accredited investor, as defined in Rule 501 of Regulation
D promulgated under the Securities Act.
The net proceeds to the
Company from the Registered Direct Offering, after deducting the Placement Agent’s fees and expenses and the Company’s
estimated offering expenses, and excluding the proceeds, if any, from the exercise of the Pre-Funded Warrants, the Series A Warrants
and the Placement Agent Warrants, are expected to be approximately $1.2 million. The Registered Direct Offering and the Private
Placement are expected to close on or about September 25, 2018, subject to the satisfaction of customary closing conditions. The
Company currently intends to use these net proceeds for working capital and general corporate purposes.
The legal opinion of Winstead
PC relating to the legality of the issuance and sale of the Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares in
the Registered Direct Offering is attached as Exhibit 5.1 to this Current Report on Form 8-K.
The description of terms
and conditions of the Engagement Letter, the form of Purchase Agreement, the form of Pre-Funded Warrant and the form of Series
A Warrant set forth herein do not purport to be complete and are qualified in their entirety by the full text of the Engagement
Letter, form of Purchase Agreement, form of Pre-Funded Warrant and form of Series A Warrant, which are attached hereto as Exhibits
99.1, 10.1, 4.1 and 4.2, respectively.