On January 7, 2020 Leap Therapeutics, Inc. (Nasdaq:LPTX), a biotechnology company focused on developing targeted and immuno-oncology therapeutics, reported the closing of its previously announced equity financing to issue 1,421,801 shares of newly designated Series A mandatorily convertible preferred stock to a lead institutional investor, at a price of $10.54 per share, and an aggregate of 1,137,442 shares of newly designated Series B mandatorily convertible preferred stock to BeiGene and Perceptive Advisors, at a price of $10.55 per share (Press release, Leap Therapeutics, JAN 7, 2020, View Source [SID1234552783]). The preferred stock price reflects a common stock equivalent price of $1.055 per share, the closing price for Leap’s common stock on the Nasdaq Global Market on the day of pricing, January 2, 2020 and, in the case of the Series A mandatorily convertible preferred stock, reflects a per share reduction equal to the exercise price of the pre-funded warrant issued upon conversion of the Series A mandatorily convertible preferred stock. The holder of Series A mandatorily convertible preferred stock also received a share of a newly designated special voting preferred stock that will entitle it to elect one member of Leap’s Board of Directors.

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Upon approval by the stockholders of Leap, the Series A mandatorily convertible preferred stock will automatically convert into pre-funded warrants to purchase 14,218,010 shares of common stock and the Series B mandatorily convertible preferred stock will automatically convert into 11,374,420 shares of common stock, plus that number of additional shares of common stock representing payment of an 8% per annum accruing dividend on each share of preferred stock as of the conversion date. Upon stockholder approval and conversion of the preferred stock, the investors will also receive warrants to purchase up to an equal number of shares of common stock at an exercise price of $2.11 per share. The aggregate gross proceeds to Leap from this offering are approximately $27 million, before deducting placement agent fees and estimated offering expenses payable by Leap, and excluding proceeds from the exercise of any warrants.

Raymond James & Associates, Inc. was the placement agent for the equity financing.

The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from such registration requirements. Leap has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issuable upon conversion of the preferred stock and exercise of the warrants issued in the private placement.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state.