Item 1.01 Entry into a Material Definitive Agreement.
On December 17, 2019,
Onconova Therapeutics, Inc. (“we,” “us,” “our,” or the “Company”) entered into
definitive securities purchase agreements (each, a “Purchase Agreement” and collectively, the “Purchase Agreements”)
with institutional investors for the issuance and sale in a registered direct offering of (i) 13,878,864 shares of the Company’s
common stock, par value $0.01 per share (“Common Stock”), and (ii) warrants to purchase up to a total of 6,939,432
shares of Common Stock (the “Investor Warrants”) at an offering price of $0.36026 per share and accompanying 0.5 Investor
Warrant. Each Investor Warrant will be exercisable for one share of our Common Stock at an exercise price of $0.298 per share,
will be exercisable immediately upon issuance and will have a term of five years from the date of issuance. The offering is expected
to close on or about December 19, 2019, subject to the satisfaction of customary closing conditions.
As previously disclosed
on our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 10, 2019, we have entered into
an Engagement Letter (the “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 an aggregate
cash fee equal to 7.0% of the gross proceeds in the offering.
In addition, in connection
with the offering, we have agreed to pay Wainwright (a) a management fee equal to 1.0% of the gross proceeds raised in the offering
(b) $85,000 for non-accountable expenses; and (c) $10,000 for clearing fees.
We also have agreed
to issue to Wainwright (or its designees) placement agent warrant to purchase up to 693,943 shares of Common Stock (“Placement
Agent Warrants”), which represents a number of shares of Common Stock equal to 5.0% of the aggregate number of shares of
Common Stock sold in the offering. The Placement Agent Warrants will be substantially on the same terms as the Investor Warrants,
except that the Placement Agent Warrants will have an exercise price of $0.4503 per share and will have a term of five years from
the effective date of the offering.
Additionally, we
have granted to Wainwright, subject to certain conditions, a twelve-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 fees and expenses and other estimated offering expenses
payable by us are expected to be approximately $4.4 million.
The shares of Common
Stock, Investor Warrants and Placement Agent Warrants (and the shares of Common Stock issuable upon exercise of the Investor Warrant
and Placement Agent Warrants sold in the offering are offered and sold pursuant to a prospectus dated December 28, 2017, and a
prospectus supplement dated as of December 17, 2019, which was filed on December 19, 2019 in connection with a takedown from the
Company’s shelf registration statement (“Registration Statement”) on Form S-3 (File No. 333-221684).
The 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 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 Securities and Exchange Commission.
The descriptions
of terms and conditions of the Purchase Agreements, the Investor Warrants and the Placement Agent Warrants set forth herein do
not purport to be complete and are qualified in their entirety by the full text of the form of Purchase Agreement, the form of
Investor Warrant and the form of Placement Agent Warrant, which are attached hereto as Exhibits 10.1, 4.1 and 4.2, respectively,
and incorporated herein by reference.
A copy of the opinion
of Morgan, Lewis & Bockius LLP relating to the legality of the securities offered by us in the offering is attached as Exhibit
5.1 hereto.
On December 18, 2019,
the Company issued a press release announcing its entry into the Purchase Agreements. A copy of the press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.