Item 1.01
Entry into a Material Definitive Agreement
On August 14, 2019, DelMar Pharmaceuticals,
Inc. (the “
Company
”) entered into an underwriting agreement (the “
Underwriting Agreement
”)
with Maxim Group LLC and Dawson James Securities, Inc. (the “
Representatives
”), as representatives of the several
underwriters named therein, relating to the sale of 6,750,000 shares of its common stock, par value $0.001 per share (the “
Common
Stock
”) (or pre-funded warrants to purchase Common Stock in lieu thereof) and common warrants to purchase up to an aggregate
of 6,750,000 shares of Common Stock (the “
Offering
”). Each share of Common Stock or pre-funded warrant, as applicable,
was sold together with a common warrant to purchase one share of Common Stock at a combined effective price to the public of $1.00
per share and accompanying common warrant. The Offering is expected to close on or about August 16, 2019.
The Company expects the net proceeds from
the Offering will be approximately $6.0 million after deducting underwriting discounts and commissions and other estimated offering
expenses payable by the Company. The Company intends to use the net proceeds from the Offering for its clinical trials and for
general corporate purposes, which may include working capital, capital expenditures, research and development and other commercial
expenditures. In addition, the Company may use the net proceeds from the Offering for investments in businesses, products or technologies
that are complementary to its business.
The common warrants are exercisable immediately
at an exercise price of $1.00 per share and will expire five years from the date of issuance. The pre-funded warrants are exercisable
immediately at an exercise price of $0.01 per share and will remain outstanding until they are exercised in full. The exercise
price and number of shares of Common Stock issuable upon exercise of the common warrants and pre-funded warrants will be subject
to adjustment in the event of any stock split, reverse stock split, stock dividend, recapitalization, reorganization or similar
transaction, among other events as described in the common warrants and pre-funded warrants. The shares of Common Stock or pre-funded
warrants, as applicable, and the accompanying common warrants can only be purchased together in this Offering but will be issued
separately.
The Company has granted the underwriters
a 45-day option, ending September 28, 2019, to purchase up to an additional 1,012,500 shares of Common Stock and/or common warrants
to purchase up to 1,012,500 shares of Common Stock, at the public offering price less discounts and commissions.
Maxim Group LLC is acting as the book-running
manager and Dawson James Securities, Inc. is acting as a co-manager in connection with the Offering, which was a firm commitment
underwritten public offering pursuant to a registration statement on Form S-1 (Registration No. 333-232931) that was declared effective
by the Securities and Exchange Commission (the “
SEC
”) on August 14, 2019. The Offering was made only by means
of a prospectus forming a part of the effective registration statement. The Company will pay the underwriters a commission equal
to 8.0% of the gross proceeds of the Offering and other expenses. As additional compensation, the Company will issue warrants to
the Representatives to purchase a number of shares equal to five percent (5%) of the total number of shares of Common Stock sold
in the Offering (the “Underwriter Warrants”). The Underwriter Warrants will have an exercise price of $1.15 per share,
will be exercisable for three years from the date of the Underwriting Agreement and may be exercised on a cashless basis in certain
circumstances specified therein.
The Underwriting Agreement contains customary
representations, warranties, and agreements by the Company, and 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. Pursuant to the Underwriting Agreement, the Company agreed, subject to certain exceptions,
not to offer, issue or sell any shares of Common Stock or securities convertible into or exercisable or exchangeable for shares
of Common Stock for a period of ninety (90) days following the Offering without the prior written consent of the Representatives.
In connection with the Offering, on August 14,
2019, certain purchasers entered into leak-out agreements with the Company (each a “
Leak-Out Agreement
” and
collectively, the “
Leak-Out Agreements
”). Pursuant to the Leak-Out Agreements, for a period beginning on the
date of the Underwriting Agreement and ending on September 24, 2019 (the “
Leak-Out Period
”), if any of the purchasers
that are signatory to the Leak-Out Agreements decide to sell any securities during the Leak-Out Period, they will only be permitted
to sell securities in such amount as shall equal up to 35% in the aggregate of the average daily volume of the Common Stock on
any given trading day, as reported by Bloomberg, LP. However, the foregoing restriction shall not apply to (a) any sales of the
common warrants sold in the Offering or (b) any actual “long” (as defined in Regulation SHO of the Securities Exchange
Act of 1934, as amended) sales of Common Stock by the purchaser or any of the purchaser’s affiliates at a price per share
greater than $2.25 (in each case, as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other
similar events occurring after the pricing date).
On August 14, 2019, the Company also entered
into a Warrant Agency Agreement (the “Warrant Agency Agreement”) with Mountain Share Transfer, LLC (the “Transfer
Agent”) pursuant to which the Transfer Agent agreed to act as transfer agent with respect to the common warrants.
The foregoing descriptions of the Underwriting
Agreement, the Warrant Agency Agreement, the Underwriter Warrants, the common warrants and the pre-funded warrants are not complete
and are qualified in their entirety by reference to the full text of the Underwriting Agreement, the Warrant Agency Agreement and
the forms of the Underwriter Warrant, common warrant and pre-funded warrant, copies of which will be filed as exhibits to an amendment
to this Current Report on Form 8-K.