Item 1.01.
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Entry into a Material Definitive Agreement.
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On October 25, 2017, Sunesis Pharmaceuticals, Inc.
(the Company) entered into two underwriting agreements (each, an Underwriting Agreement) with Cowen and Company, LLC and Wells Fargo Securities, LLC, as representatives of the underwriters (collectively, the
Underwriters) for separate, concurrent offerings of the Companys securities, which together are expected to result in gross proceeds to the Company of approximately $20 million.
The first Underwriting Agreement relates to the offering and sale of 7,500,000 shares of the Companys common stock, par value $0.0001 per share (the
Common Stock) and accompanying warrants to purchase 3,750,000 shares of the Common Stock (the Common Stock Offering). The purchase price of each share of common stock and accompanying warrant to purchase 0.5 shares of common
stock is $2.00.
The second Underwriting Agreement relates to the offering and sale of 2,500 shares of the Companys Series D Convertible
Preferred Stock, par value $0.0001 per share (the Series D Stock) and accompanying warrants to purchase 1,250,000 shares of the Common Stock (the Series D Offering). The purchase price of each share of Series D
Preferred Stock, convertible into 1,000 shares of common stock, and accompanying warrant to purchase 500 shares of common stock is $2,000.
The initial
per share exercise price of the warrants is $3.00 per whole share of common stock. The exercise price is subject to adjustment in the event of stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events
affecting our common stock. The warrants may be exercised at any time until and including October 27, 2018.
The foregoing summary of the terms of
the warrant is subject to, and qualified in their entirety by, a form of warrant attached herewith as Exhibit 4.1 to this Current Report on
Form 8-K
and is incorporated by reference herein.
The Company will enter into a warrant agency agreement, or the Warrant Agency Agreement, with American Stock Transfer & Trust Company, LLC, or the
Warrant Agent, pursuant to which the Warrant Agent will act as the Companys agent in connection with the issuance, registration, transfer, exchange, exercise and replacement of the warrants and the delivery of the shares of common stock upon
exercise of the warrants. The warrants will be issued in book-entry form.
The rights, preferences and privileges of the Series D Stock are set forth in a
Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (the Certificate of Designation of Series D Convertible Preferred Stock), which the Company filed with the Delaware Secretary of
State on October 25, 2017. Each share of Series D Stock is convertible into 1,000 shares of the Companys Common Stock at any time at the holders option. The holder, however, will be prohibited from converting shares of Series D Stock
into shares of Common Stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 9.98% of the total number of shares of the Companys Common Stock then issued and outstanding. In the event of the
Companys liquidation, dissolution, or winding up, holders of Series D Stock will receive a payment equal to $0.0001 per share of Series D Stock before any proceeds are distributed to the holders of Common Stock. Shares of Series D Stock will
generally have no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding Series D Stock will be required to amend the terms of the Series D Stock. Shares of the Series D Stock will not be
entitled to receive any dividends, unless and until specifically declared by the Companys board of directors, and will rank:
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senior to all of the Companys Common Stock;
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senior to all of the Companys authorized but unissued Series A Preferred Stock;
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senior to any class or series of the Companys capital stock hereafter created specifically ranking by its terms junior to the Series D Stock;
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on parity with all of the Companys Series B Preferred Stock and Series C Preferred Stock;
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on parity with any class or series of the Companys capital stock hereafter created specifically ranking by its terms on parity with the Series D Stock;
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junior to any class or series of the Companys capital stock hereafter created specifically ranking by its terms senior to the Series D Stock;
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in each case, as to distributions of assets upon the Companys liquidation, dissolution or winding up whether voluntarily or involuntarily.
Each of the Common Stock Offering and the Series D Offering is being made pursuant to the Companys effective shelf registration statement on Form
S-3
(Registration
No. 333-195779),
including the prospectus dated June 10, 2014 contained therein, as the same has been supplemented.
The sale of shares of Common Stock and Series D Stock is expected to close on October 27, 2017. Each
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, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in each 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. Subject to certain exceptions, the Company and all of the Companys directors and executive officers and certain
stockholders also agreed to not sell or transfer any common stock of the Company for 60 days after October 25, 2017 without first obtaining the consent of the Underwriters.
A copy of the Underwriting Agreement relating to the Common Stock Offering is attached hereto as Exhibit 1.1 and is incorporated herein by reference. A
copy of the Underwriting Agreement relating to the Series D Offering is attached hereto as Exhibit 1.2 and is incorporated herein by reference. A copy of the Certificate of Designation of Series D Convertible Preferred Stock is
attached hereto as Exhibit 3.1 and is incorporated herein by reference. The foregoing description of the terms of the Underwriting Agreements and the rights, preferences and privileges of the Series D Stock is qualified in its entirety by
reference to such exhibits. A copy of the opinion of Cooley LLP relating to the legality of the issuance and sale of the securities in these offerings is attached as Exhibit 5.1 hereto.