Item 1.01 Entry into a Material Definitive Agreement.
On December 6, 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) 14,326,648 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 7,163,324 shares of Common Stock (the “Investor Warrants”) at an offering price of $0.349 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 $0.287 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 10, 2019, subject to the satisfaction of customary closing conditions.
We also 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 716,332 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 $0.43625 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 6, 2019 to be filed 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 Agreement, 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 9, 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.