| Item 1.01. | Entry Into a Material Definitive Agreement. |
On November 20, 2019, Molecular Templates, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Cowen and Company, LLC, Barclays Capital Inc. and Stifel, Nicolaus & Company, Incorporated, as representatives of the several underwriters named therein (the “Underwriters”), relating to the underwritten public offering of (i) an aggregate of 6,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Shares”), and (ii) an aggregate of 250 shares of newly designated Series A Convertible Preferred Stock, $0.001 par value (“Series A Preferred Stock”), which is referred to herein as the “Offering”. The price to the public in the Offering was $8.00 per share with respect to the Common Shares and $8,000.00 per share with respect to the Series A Preferred Stock. In addition, under the terms of the Underwriting Agreement, the Company granted the Underwriters an option, exercisable for 30 days, to purchase up to 900,000 additional shares of common stock.
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”), other obligations of the parties and termination provisions. The Offering was made pursuant to the Company’s effective registration statementon Form S-3 (RegistrationStatement No. 333-228975) previously filed with the Securities and Exchange Commission (“SEC”) and a related prospectus supplement and accompanying prospectus.
The net proceeds to the Company from the Offering are expected to be approximately $53.3 million, after deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company. This includes the full exercise of the Underwriters’ option to purchase 900,000 shares of Common Stock, which the Underwriters exercised in full on November 21, 2019. The Offering is scheduled to close on or about November 25, 2019, subject to customary closing conditions
The foregoing description of the terms of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to such exhibit. The Underwriting Agreement is filed as Exhibit 1.1 to this report and is incorporated herein by reference.
A copy of the opinion of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. relating to the legality of the issuance and sale of the Firm Shares in the Offering is attached as Exhibit 5.1 hereto.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Effective November 25, 2019, immediately prior to the closing of the Offering, the Company designated the terms of 250 shares of its authorized and unissued “blank check” preferred stock; specifically, designating the terms of the Series A Preferred Stock as described in the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate of Designation”) filed with the Delaware Secretary of State, which is attached hereto as Exhibit 3.1 and the materials terms of which are summarized below:
Each share of the Series A Preferred Stock is convertible into 1,000 shares of the Company’s common stock (subject to adjustment
as provided in the Certificate of Designation) at any time at the option of the holder, provided that the holder will be prohibited from
converting Series A Preferred Stock into shares of the Company’s common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 9.99% of the total number of shares of the Company’s common stock then issued and outstanding. In the event of the Company’s liquidation, dissolution, or winding up, holders of Series A Preferred Stock will receive a payment equal to $0.001 per share of Series A Preferred Stock before any proceeds are distributed to the holders of the Company’s common stock andpari passuwith any distributions to the holders of the Company’s Series A Preferred Stock. Shares of Series A Preferred Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the then outstanding Series A Preferred Stock will be required to amend the terms of the Series A Preferred Stock. Shares of Series A Preferred Stock will be entitled to receive any dividends payable to holders of the Company’s common stock, and will rank:
| | • | | senior to all of the Company’s common stock; |
| | • | | senior to any class or series of the Company’s capital stock hereafter created specifically ranking by its terms junior to the Series A Preferred Stock; |
| | • | | on parity to any class or series of the Company’s capital stock hereafter created specifically ranking by its terms on parity with the Series A Preferred Stock; and |
| | • | | junior to any class or series of the Company’s capital stock hereafter created specifically ranking by its terms senior to the Series A Preferred Stock; |
in each case, as to distributions of assets upon the Company’s liquidation, dissolution or winding up whether voluntarily or involuntarily and/or the right to receive dividends.
