Item 1.01 Entry into a Material Definitive Agreement.
On September 23, 2019, Onconova Therapeutics, Inc. (“we,” “us,” “our,” or the “Company”) entered into securities purchase agreements with certain institutional and accredited investors pursuant to which we agreed to sell an aggregate of 2,198,938 shares of our common stock, par value $0.01 per share (“common stock”) in a registered direct offering to the investors for gross proceeds of approximately $3.5 million. The purchase price per share of common stock was $1.60 per share. The offering is expected to close on or about September 25, 2019, subject to the satisfaction of customary closing conditions.
The investors in this offering are holders of our warrants to purchase shares of our convertible preferred stock issued in February 2018 (which we refer to as the February 2018 warrants) and May 2018 (which we refer to as the May 2018 warrants). We also have entered into a warrant amendment with each investor pursuant to which, for each share of common stock purchased by the investor in the offering, we will amend one outstanding February 2018 warrant held by the investor and/or one outstanding May 2018 warrant held by the investor, as applicable, to reduce the exercise price of the February 2018 warrants and/or May 2018 warrants to $1.60 per share (on an as-converted basis per share of common stock) and to extend the term of the February 2018 warrants and/or May 2018 warrants to December 31, 2022. The price for amending one outstanding February 2018 warrant and/or one outstanding May 2018 warrant was $0.125 per share (on an as-converted basis per share of common stock).
We also entered into an engagement letter with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which Wainwright agreed to serve as exclusive placement agent for the offering. We have agreed to pay Wainwright $56,000 for non-accountable expenses, and $10,000 for clearing expenses.
We also have agreed to issue to Wainwright placement agent warrants to purchase up to 109,585 shares of common stock, which represents a number of shares of common stock equal to 5.0% of the aggregate number of shares of common stock sold in this offering but excluding the number of shares sold to one of our directors. The placement agent warrants have an exercise price of $2.00 per share of common stock, which equals 125% of the offering price for the shares sold in the registered direct offering. The placement agent warrants will be immediately exercisable and will expire on September 23, 2023.
Additionally, we have granted to Wainwright, subject to certain conditions, a six-month right of first refusal with respect to additional raises of funds by us. In addition, if any investor introduced to us by Wainwright participates in a capital raising transaction during the eight months following termination or expiration of our engagement of Wainwright, we have agreed to pay to Wainwright the cash compensation described herein in connection with capital provided by such investor.
The net proceeds to us from the offering, after deducting Wainwright’s placement agent expenses and other estimated offering expenses payable by us are expected to be approximately $3.3 million.
The shares of our common stock subject to the securities purchase agreement were offered and will be sold pursuant to a prospectus supplement that will be filed with the Securities and Exchange Commission (“SEC”), in connection with a takedown from our effective shelf registration statement on Form S-3 (File No. 333-221684) (the “Registration Statement”) and the base prospectus dated as of December 28, 2017 contained in such Registration Statement. We also will file with the SEC amended prospectus supplements relating to the amendments to the February 2018 warrants (pursuant to our registration statement on Form S-1 (Registration No. 333-222374)) and May 2018 warrants (pursuant to our registration statement on Form S-1 (Registration No. 333-224315)) described above.
The securities purchase agreements contain representations and warranties that the parties made to, and solely for the benefit of, the other in the context of all of the terms and conditions of that agreement and in the context of the specific relationship between the parties. The provisions of the securities purchase agreements, including the representations and warranties contained therein, are not for the benefit of any party other than the parties to such agreements. Rather, investors and the public should look to other disclosures contained in our filings with the SEC.
2