Entry into a Material Definitive Agreement.
On April 23, 2019,
Moleculin Biotech, Inc. (the “Company”) entered into subscription agreements (each a “Subscription Agreement”)
with certain institutional investors (the “Investors”) for the sale by the Company of up to 9,375,000 units (each a
“Unit”), each Unit consisting of (i) one share of the Company’s common stock, $0.001 par value per share (“Common
Stock”), and (ii) 0.5 of a warrant to purchase one share of Common Stock (each a “Warrant”). The public offering
price of the Units was $1.60 per Unit.
The Warrants included
in the Units will be immediately exercisable at a price of $1.75 per share, and will expire five years from the date of issuance.
The shares of Common Stock are being offered together with the Warrants, but the securities comprising the Units will be issued
separately and will be separately transferable.
The closing of the
offering is expected to take place on April 25, 2019, subject to the satisfaction of customary closing conditions. The Company
estimates that the net proceeds from the sale of the Units will be approximately $14.0 million after deducting the placement agent
fees and estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for
planned clinical trials, preclinical programs, for other research and development activities and for general corporate purposes.
The Units are being
offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-219434), which became effective
on August 21, 2017.
On April 23, 2019,
the Company also entered into a placement agent agreement (the “Placement Agent Agreement”) with Oppenheimer &
Co. Inc. (“Oppenheimer”), pursuant to which Oppenheimer agreed to serve as exclusive placement agent for the issuance
and sale of the Units. The Company has agreed to pay Oppenheimer an aggregate fee equal to 6.0% of the gross proceeds received
by the Company from the sale of the Units in the transactions.
Pursuant to the Placement
Agent Agreement, the Company agreed to grant to Oppenheimer warrants to purchase up to 6% of the aggregate number of shares of
Common Stock sold in the offering (the “Oppenheimer Warrant”). The exercise price of the Oppenheimer Warrant will be
$1.75 per share. The Oppenheimer Warrant has been deemed underwriting compensation by the Financial Industry Regulatory Authority,
Inc. (“FINRA”) and therefore shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject
of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the
securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the
offering, pursuant to Rule 5110(g)(1) of FINRA’s Rules. The Company will also reimburse Oppenheimer for its expenses of $75,000.
The Company agreed
to a 90-day “lock-up” with respect to shares of Common Stock and other securities beneficially owned, including securities
that are convertible into, or exchangeable or exercisable for, shares of Common Stock. Subject to certain exceptions, during the
lock-up period, the Company and its executive officers and directors may not offer, sell, pledge or otherwise dispose of the foregoing
securities without the prior written consent of Oppenheimer.
The Placement Agent
Agreement contains customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification
obligations of the Company and the Placement Agent, including for liabilities under the Securities Act of 1933, as amended, other
obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Placement
Agent Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties
to such agreement, and may be subject to limitations agreed upon by the contracting parties.
The foregoing description
of the material terms of the Placement Agent Agreement, Subscription Agreement, Warrant and Oppenheimer Warrant is not complete
and is qualified in its entirety by reference to the full text of the Placement Agent Agreement, Subscription Agreement, form of
Warrant and Oppenheimer Warrant, copies of which are filed as Exhibits 1.1, 10.1, 4.1 and 4.2 to this Current Report on Form 8-K
and are incorporated herein by reference. The legal opinion of Schiff Hardin LLP, counsel to the Company, relating to the securities
offered is filed as Exhibit 5.1 to this Current Report on Form 8-K.