| Item 3.02 | Unregistered Sales of Equity Securities |
The information contained below in Item 8.01 related to the Underwriter Warrants (as defined below) and the shares of Common Stock (as defined below) issuable thereunder is hereby incorporated by reference into this Item 3.02.
On December 9, 2020, Oncternal Therapeutics, Inc. (“Oncternal” or the “Company”) entered into an underwriting agreement (as amended and restated, the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), relating to the issuance and sale of 16,666,667 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The price to the public in this offering is $4.50 per share. Wainwright has agreed to purchase the shares from the Company pursuant to the Underwriting Agreement at a price of $4.185 per share, net of its underwriting discounts and commissions, as discussed below. The net proceeds to the Company from this offering are expected to be approximately $68.7 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. The offering is expected to close on or about December 14, 2020, subject to the satisfaction of customary closing conditions. In addition, under the terms of the Underwriting Agreement, the Company has granted Wainwright a 30-day option to purchase up to 2,495,000 additional shares of Common Stock at the same offering price to the public, less underwriting discounts and commissions.
The offering is being made pursuant to a shelf registration statement on Form S-3 (Registration Statement No. 333-222268) filed by the Company with the Securities and Exchange Commission (the “SEC”) that became effective on January 5, 2018, and a prospectus supplement and accompanying prospectus filed with the SEC.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and Wainwright, 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 Underwriting 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.
Wainwright is acting as the sole book-running manager for the offering. The Company has agreed to pay Wainwright underwriting discounts and commissions equal to 7.0% of the gross proceeds received by the Company from the sale of the shares of Common Stock in the offering as well as a management fee equal to 1.0% of the gross proceeds received by the Company from the sale of the shares of Common Stock in the offering. In addition, the Company will also issue to Wainwright or its designees warrants to purchase up to 6.0% of the aggregate number of shares of Common Stock sold in the offering (the “Underwriter Warrants”). The Underwriter Warrants are exercisable for five years from commencement of sales in this offering and have an exercise price equal to 125% of the public offering price per share of Common Stock in this offering, or $5.625 per share, subject to adjustments as provided in the terms of the Underwriter Warrants. The Underwriter Warrants and the shares issuable upon exercise of the Underwriter Warrants will be issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state laws. The Company will also pay Wainwright $40,000 for non-accountable expenses, up to $100,000 for documented reimbursable expenses and $12,900 for clearing fees.
The foregoing descriptions of the Underwriting Agreement and Underwriter Warrants are not complete and are qualified in their entirety by reference to the full text of the Underwriting Agreement and Form of Underwriter Warrant, copies of which are filed as Exhibit 1.1 and Exhibit 4.1, respectively, to this report and are incorporated by reference herein. A copy of the opinion of Latham & Watkins LLP relating to the legality of the issuance and sale of Common Stock in the offering is attached as Exhibit 5.1 to this report.
The Company issued press releases on December 9, 2020 announcing the pricing and upsizing of the offering, which press releases are attached as Exhibits 99.1 and 99.2, respectively, to this report.
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