Item 1.01 Entry into a Material Definitive Agreement.
On December 31,
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 certain institutional investors for the issuance and sale in a registered direct offering of 27,662,518
shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), at a purchase price of $0.3615
per share, for aggregate gross proceeds of approximately $10.0 million. The offering closed on January
3, 2020.
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 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 warrants to purchase up to 1,383,126 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. Each Placement Agent Warrant will have an exercise price of $0.4519 per share of Common Stock
and will have a term of four years from the date of issuance.
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, were approximately $9.025 million.
The shares of Common
Stock and Placement Agent Warrants (and the shares of Common Stock issuable upon exercise of the Placement Agent Warrants) are
offered and sold pursuant to a prospectus dated December 28, 2017, and a prospectus supplement dated as of December 31, 2019, which
was filed on January 3, 2020 in connection with a takedown from the Company’s shelf 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 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 and the form of Placement Agent Warrant,
which are attached hereto as Exhibits 10.1 and 4.1, 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 31, 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.
On January 3, 2020, the Company issued a press release announcing
the closing of the offering. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.