Item 1.01. Entry into a Material Definitive Agreement.
On February 11, 2020, Phio
Pharmaceuticals Corp. (the “Company”) entered into an Underwriting Agreement (the “Underwriting
Agreement”) with H.C. Wainwright & Co., LLC, as representative of the several underwriters identified therein
(collectively, the “Underwriters”), pursuant to which the Company agreed to issue and sell, in a registered
public offering of the Company (the “Offering”), (i) 993,633 Units (the “Units”), consisting of one
share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) and one warrant to
purchase one share of Common Stock (the “Warrants”); and (ii) 1,006,367 Pre-Funded Units (the “Pre-Funded
Units”), consisting of one pre-funded warrant to purchase one share of Common Stock (the “Pre-Funded
Warrants”) and one Warrant, which closed on February 13, 2020. The offering price was $4.00 per Unit and $3.999 per Pre-Funded Unit.
The Warrants included in the Units and the
Pre-Funded Units are immediately exercisable at a price of $4.00 per share of Common Stock, subject to adjustment in certain circumstances,
and expire five years from the date of issuance. The shares of Common Stock, or Pre-Funded Warrants in the case of the Pre-Funded
Units, and the Warrants were offered together, but the securities contained in the Units and the Pre-Funded Units were issued separately.
The Pre-Funded Units were offered and sold
to purchasers whose purchase of Units in the Offering would otherwise result in the purchaser, together with its affiliates and
certain related parties, beneficially owning more than 4.99% of the Company’s outstanding Common Stock immediately following
the consummation of this Offering. Each Pre-Funded Warrant contained in a Pre-Funded Unit is exercisable for one share of Common
Stock at an exercise price of $0.001 per Pre-Funded Warrant. The Pre-Funded Warrants are immediately exercisable and may be exercised
at any time until all of the Pre-Funded Warrants are exercised in full.
The Underwriting Agreement contains customary
representations and warranties, agreements and obligations, conditions to closing and termination provisions. The Underwriting
Agreement provides for indemnification by the Underwriters of the Company, its directors and certain of its executive officers,
and by the Company of the Underwriters, for certain liabilities, including liabilities arising under the Securities Act of 1933,
as amended (the “Securities Act”), and affords certain rights of contribution with respect thereto.
The net proceeds to the Company from the
Offering are expected to be approximately $7.0 million, after deducting underwriting discounts and commissions and payment of other
estimated expenses associated with the Offering that are payable by the Company. The Company intends to use substantially all of
the net proceeds of the Offering primarily for the development of the Company’s immuno-oncology program, for other research
and development activities and for general working capital.
Pursuant to the Underwriting Agreement,
the Company, upon closing of the Offering, issued to the Underwriter warrants to purchase up to 150,000 shares of Common Stock
(the “Underwriter Warrants”), or 7.5% of the aggregate number of shares of Common Stock and Pre-Funded Warrants sold
in the Offering. The Underwriter Warrants are immediately exercisable at a price of $5.00 per share of Common Stock, subject to
adjustment in certain circumstances, may be exercised on a cashless basis under certain circumstances, and expire on February 11,
2025.
A registration statement on Form S-1 relating
to the Offering (File No. 333-234032) was declared effective by the Securities and Exchange Commission on February 11, 2020. The
Offering was made only by means of a prospectus forming a part of the effective registration statement.
The foregoing descriptions of the Underwriting
Agreement, the Warrants, the Pre-Funded Warrants and the Underwriter Warrants are not complete and are qualified in their entirety
by reference to the full text of the Underwriting Agreement and the forms of the Warrant, the Pre-Funded Warrant and Underwriter
Warrants, copies of which are filed as Exhibit 1.1, Exhibit 4.1, Exhibit 4.2 and Exhibit 4.3 to this Current Report on Form 8-K
and hereby incorporated by reference herein.