Item 1.01 Entry into a Material Definitive Agreement.
On February 1, 2019, Leap Therapeutics, Inc. (the Company) entered into an underwriting agreement (the Underwriting Agreement) with Raymond James & Associates, Inc. and Ladenburg Thalmann & Co. Inc., as representatives of the several underwriters listed therein (the Underwriters), relating to the issuance and sale in an underwritten public offering by the Company of 6,571,428 shares of the Companys common stock, par value $0.001 per share (the Common Stock), and warrants to purchase up to 6,571,428 shares of its Common Stock. Each share of Common Stock is being sold together with a warrant to purchase one share of Common Stock for a combined offering price of $1.75 per share and accompanying warrant. The warrants are exercisable commencing on the date of issuance, will expire on February 5, 2026 and will have an exercise price of $1.95 per share, subject to certain adjustments.
Under the terms of the Underwriting Agreement, the Company has granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 985,714 shares of its Common Stock offered in the public offering and/or warrants to purchase up to 985,714 shares of its Common Stock at the public offering price, less underwriting discounts and commissions. The net proceeds to the Company from the Offering are expected to be approximately $10.5 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, assuming no exercise by the Underwriters of its option to purchase additional shares of common stock or additional warrants, and excluding any proceeds the Company may receive upon exercise of the warrants being offered. The transactions contemplated by the Underwriting Agreement are expected to close on February 5, 2019, subject to the satisfaction of customary closing conditions. Raymond James & Associates, Inc. and Ladenburg Thalmann & Co. Inc. are acting as book-running managers for the offering.
The Company intends to use the net proceeds from the offering for general corporate purposes, which may include, without limitation, funding new clinical trials of DKN-01 and TRX518 and the continuation of ongoing studies, capital expenditures, working capital and general and administrative expenses.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended (the Securities Act), and other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the
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parties to such agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Underwriting Agreement.
As part of the Underwriting Agreement, subject to certain exceptions, certain of the Companys officers, directors and five percent shareholders agreed not to sell or otherwise dispose of any of the Companys Common Stock held by them for a period ending 60 days after the date of the Underwriting Agreement without first obtaining the written consent of Raymond James & Associates, Inc. and Ladenburg Thalmann & Co. Inc.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report and is incorporated herein by reference. A copy of the form of warrant is filed as Exhibit 4.1 to this Current Report and is incorporated herein by reference. The foregoing description of the Underwriting Agreement and warrants do not purport to be complete and the terms of the Underwriting Agreement and warrants are subject to, and qualified in their entirety by reference to, the Underwriting Agreement and warrants, which are filed herewith as Exhibits 1.1 and 4.1, respectively, and are incorporated herein by reference.
The Common Stock and warrants are being offered and sold pursuant to the Companys effective shelf registration statement on Form S-3 and an accompanying prospectus (Registration Statement No. 333-223419) filed with the Securities and Exchange Commission (the SEC) on March 2, 2018 and declared effective by the SEC on March 16, 2018, as supplemented by a preliminary prospectus supplement filed with the SEC on January 31, 2019, and a final prospectus supplement to be filed with the SEC pursuant to Rule 424(b) under the Securities Act. A copy of the opinion of Morgan, Lewis & Bockius LLP relating to the legality of the issuance and sale of the shares of Common Stock, warrants and shares of Common Stock underlying the warrants in the offering is attached as Exhibit 5.1 hereto.
Item 9.01.
Financial Statements and Exhibits.
(d)
Exhibits.
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