Item 3.02 Unregistered Sales of Equity Securities.
On July 23, 2020, Mateon Therapeutics, Inc. (the “Company”) entered intosubscription agreements with certain accredited investors (“SubscriptionAgreement”), whereby the Company issued and sold a total of 40 units (“Units”),with each Unit consisting of (i) 25,000 shares of the common stock, par value$0.01 per share (“Edgepoint Common Stock”), of EdgePoint AI, Inc., a DelawareCorporation (“EdgePoint”), a division of the Company, for a price of $1.00 pershare of Edgepoint Common Stock; (ii) one convertible promissory note issued bythe Company (the “Note”), convertible into up to 25,000 shares of EdgePointCommon Stock at a conversion price of $1.00 per share, or up to 138,889 sharesof the Company’s common stock, par value $0.01 per share (“Mateon CommonStock”), at a conversion price of $0.18 per share; and (iii) 100,000 warrants(the “Warrants”), consisting of (a) 50,000 warrants to purchase an equivalentnumber of shares of EdgePoint Common Stock at $1.00 per share (“EdgepointWarrant”), and (b) 50,000 warrants to purchase an equivalent number of shares ofCompany Common Stock at $0.20 per share (“Mateon Warrant”) (the “Financing”).
The Financing resulted in gross proceeds of $2.0 million to the Company.Placement agent fees of $256,000 were paid to JH Darbie & Co., Inc. (“JHDarbie”). JH Darbie and the Company are parties to a placement agent agreement,dated February 25, 2020 (“Agreement”) pursuant to which DH Darbie has the rightto sell a minimum of 40 Units and a maximum of 100 Units on a best effortsbasis. The issuance and sale of the Units on July 23, 2020 represented the firsttranche of the Financing (“First Tranche”).
In connection with the consummation of the First Tranche, the Company enteredinto a Registration Rights Agreement granting certain registration rights withrespect to the shares of Mateon Common Stock issued in connection with theFinancing, as well as the shares of Mateon Common Stock issuable upon exerciseof the Mateon Warrants.
The issuance of the Units is exempt from the registration requirements of theSecurities Act of 1933, as amended (“Securities Act”), in reliance on theexemptions provided by Section 4(a)(2) of the Securities Act as provided in Rule506 of Regulation D promulgated thereunder. The shares of Common Stock andWarrants and any shares of Common Stock issuable upon exercise of the Warrants,have not been registered under the Securities Act or any other applicablesecurities laws, and unless so registered, may not be offered or sold in theUnited States except pursuant to an exemption from the registration requirementsof the Securities Act.
The foregoing description of the Subscription Agreement, Agreement, EdgepointWarrants, Mateon Warrants, Note and Registration Rights Agreement are summaries,and are qualified by reference to such documents, which are attached hereto asExhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, respectively.
Item 8.01 Other Events
On July 27, 2020, the Company issued a press release announcing the closing ofthe First Tranche. A copy of the press release is filed herewith as Exhibit99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.Exhibit No. Description10.1 Form of Subscription Agreement, dated July 23, 202010.2 Form of Placement Agency Agreement, dated February 25, 202010.3 Form of Edgepoint Warrant, dated July 23, 202010.4 Form of Mateon Warrant, dated July 23, 202010.5 Form of Note, dated July 23, 202010.6 Registration Rights Agreement, dated July 23, 202099.1 Press Release issued by the Company, dated July 27, 2020.
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