GALENA BIOPHARMA, INC. (NASDAQ:GALE) Files An 8-K Unregistered Sales of Equity Securities

As previously reported, on May 10, 2016, Galena Biopharma,
Inc.(the Company) entered into a Securities Purchase Agreement
(the Securities Purchase Agreement), with JGB (Cayman) Newton
Ltd. (the Purchaser) to which the Company sold to Purchaser, at a
6.375% original issue discount, a $25,530,000 Senior Secured
Debenture (the Initial Debenture) and warrants to purchase up to
100,000 shares of the Company’s common stock, $0.0001 par value
per share (Common Stock). Net proceeds to the Company from sale
of the Initial Debenture and warrants, after payment of
commissions and legal fees, were approximately $23,400,000. The
Initial Debenture contained no conversion features to shares of
Common Stock. Unless noted otherwise, all per share prices and
per share amounts discussed herein have been adjusted to take
into account the November 11, 2016 1for-20 reverse split of the
Common Stock (the Reverse Stock Split).

The Initial Debenture carried an interest only period of six
months following which the holder of the Initial Debenture had
the right, at its option, to require the Company to redeem up to
$1,100,000 of the outstanding principal amount of the Initial
Debenture per calendar month. The Company is required to
promptly, but in any event no more than three trading days after
the holder delivers a redemption notice to the Company, pay the
applicable redemption amount in cash or, at the Companys election
and subject to certain conditions, in shares of Common Stock. If
the Company elects to pay the redemption amount in shares of
Common Stock, then the shares will be delivered at the lesser of
A) 7.5% discount to the average of the 3 lowest volume weighted
average prices over the prior 20 trading days or B) a 7.5%
discount to the prior trading days volume weighted average price
(the Stock Payment Price). to the Initial Debenture, the Company
may only opt for payment in shares of Common Stock if certain
equity conditions are met or waived, including, among others,
that the volume weighted price of the Common Stock be at least
$15.00 (the Original Minimum Price Condition).

Under the Initial Debenture, if the interim analysis of the
PRESENT Trial resulted in a discontinuation of the study (which
it did), the holder of the Initial Debenture had the right to
require the Company to prepay in cash all, or any portion, of the
outstanding principal amount of this Debenture funded in cash by
the holder on the closing date, plus all accrued and unpaid
interest. If the holder elected such prepayment of the Initial
Debenture, then the number of shares subject to the warrants
issued to the holder would have been reduced in proportion to the
percentage of principal and accrued interest required to be
prepaid by the Company. Upon the closing of the sale of the
Initial Debenture, the Purchaser received a Series A Warrant to
purchase 50,000 shares of Common Stock at an exercise price of
$30.20, exercisable for five years from issuance (the Series A
Warrant). In accordance with the terms of the Securities Purchase
Agreement, the Purchaser also received a warrant to purchase
50,000 shares of Common Stock in connection with the Companys
announcement of the results of the interim analysis of its
PRESENT Trial in June 2016 (the Series B Warrant). The Series B
Warrant has an exercise price of $8.60, 120% of the
volume-weighted average price of the Common Stock on the date of
the announcement of the results of the interim analysis.

Armentum Partners, LLC (the Placement Agent) acted as the
placement agent in the offering of the Initial Debenture and the
Company agreed to pay the Placement Agent a fee equal to 2% of
the funds received from the sale of the Initial Debenture. The
Company paid half of the placement fee upon funding and the other
half was paid at the time the Present Trial was discontinued and
the Debenture was not prepaid in connection with such
discontinuation.

As previously reported, the Initial Debenture was amended and
restated in its entirety on August 22, 2016 (as so amended, the
Debenture) to an Amendment Agreement, dated August 22, 2016,
among the Company, the Purchaser and JGB Collateral LLC (the
Amendment Agreement). As previously reported, interest on the
Debenture is payable at the end of each month based on the
outstanding principal. The Debenture matures on November 10,
2018, and accrues interest at 9% per year. In addition, on the
maturity date of the Debenture (or such earlier date that the
principal amount of the Debenture is paid in full by acceleration
or otherwise) a fixed amount, which shall be deemed interest
under the Debenture, equal to $765,900, will be due and payable
to the holder of the Debenture on such date in, at the option of
the Company, cash and, subject to the same conditions for the
payment of interest in shares of Common Stock, shares of Common
Stock or a combination of cash and Common Stock.

The Companys obligations under the Debenture are secured under a
Security Agreement by a senior lien on all of the Companys
assets, including all of the Companys interests in its
consolidated subsidiaries.

After giving effect to the Amendment Agreement, the Debenture
contains the following modified and/or additional terms, among
others:

In addition, in accordance with the terms of the Amendment
Agreement, the exercise price of the Series A Warrant was reduced
from $30.20 per share to $8.60 per share (as may be further
adjusted appropriately for stock splits, combinations or similar
events).

As previously reported, on December 14, 2016, the Company and the
Purchaser entered into a waiver (the First Waiver) to which, as
contemplated by the Debenture, the Purchaser waived with respect
to the calendar months of December 2016, January 2017, February
2017 and March 2017 (collectively, the First Specified Months)
the Amended Minimum Price Condition, provided that, among other
things, with respect to the First Specified Months, the volume
weighted average price of the Common Stock was not less than
$1.00 and the Companys cash on hand exceeded the outstanding
principal amount of the Debenture by $10 million. Furthermore,
the First Waiver set out a monthly amount to be redeemed for each
of the First Specified Months equal to $1,500,000 and amended the
Debenture to require the Company to withdraw all cash and/or cash
equivalents in excess of $18,500,000 from certain accounts and
deposit such funds into an account in a form acceptable to the
Purchaser, to be executed by the Company, U.S. Bank, N.A. and SVB
Asset Management such that the Company requires the prior written
consent of the Purchaser for certain withdrawals. The First
Waiver amends the Debenture to grant the Purchaser the right to
redeem any portion of the outstanding principal amount of the
Debenture in Common Stock if the price per share of Common Stock
on a principal trading market at any point in time of any trading
day exceeds the closing price per share of the Common Stock on
the immediately preceding trading day by more than 25%.

As previously reported, on April 1, 2017, the Company and
Purchaser entered into a waiver (the Second Waiver) to which ,as
contemplated by the Debenture, the Purchaser waived with respect
to the calendar months of April 2017, May 2017, June 2017, July
2017, August 2017 and September 2017 (collectively, the Second
Specified Months) the Amended Minimum Price Condition, provided
that, among other things, with respect to the Second Specified
Months, the volume weighted average price of the Common Stock is
not less than $0.30 and the Companys cash on hand exceeds the
outstanding principal amount of the Debenture by $10 million.

On May 1, 2017, the Purchaser, the Company and the guarantors of
the Companys obligations under the Debenture entered into an
amendment agreement (the 2017 Amendment Agreement) to which the
Purchaser may, from time to time, at the Purchasers option waive
the Amended Minimum Price Condition; provided, however, the
Purchaser cannot waive the Amended Minimum Price Condition to the
extent that the resulting Stock Payment Price would be less than
$0.35 per share as a result of any such waiver (the Minimum Stock
Payment Price Condition). The 2017 Amendment Agreement further
provides that, in the event of any Equity Conditions Failure (as
such term is defined in the Debenture) that is not, or cannot be
as a result of the 2017 Amendment Agreement, waived by the
Purchaser, the Company shall honor the holder redemption amounts
in cash or, at the Companys election, with the prior written
consent of the Purchaser, deliver aggregate consideration in
shares of Common Stock and cash in satisfaction of the applicable
holder redemption amount as follows: (i) the number of shares of
Common Stock equal to the quotient obtained by dividing such
holder redemption amount and $0.35 (each such share having a
deemed value per share at the Stock Payment Price that would have
been in effect but for the Minimum Stock Payment Price Condition
of $0.35 per share) and (ii) cash equal to the difference between
the holder redemption amount and the aggregate deemed value of
the shares of Common Stock delivered in clause (i).

As of May 1, 2017, (i) there were 37,435,524 shares of Common
Stock outstanding and (ii) 9,131,868 shares of Common Stock had
been issued by the Company to the terms of the Debenture.
Assuming all the shares issuable to the terms of the Debenture
subsequent to May 1, 2017 are issued at a Stock Payment Price of
$0.35, the lowest Stock Payment Price permitted under the Minimum
Stock Price Payment Condition, the Company estimates that the
maximum number of shares of Common Stock that the Company could
issue to the terms of the Debenture subsequent to May 1, 2017 is
45,000,000.

The Debenture, warrants and shares of Common Stock issued (or to
be issued) to the Purchaser to the Debenture were sold to the
Purchaser in reliance on the exemption from registration under
Section 4(a)(2) of the Securities Act of 1933, as amended (the
Securities Act) and the Regulation D (Rule 506) promulgated under
the Securities Act. The Common Stock to be issued upon exercise,
if any, of the Series A Warrant will be sold in reliance on the
exemption from registration under Section 4(a)(2) of the
Securities Act. The Purchaser has represented that it was an
accredited investor (as defined by Rule 501 promulgated under the
Securities Act) at the time it was offered the Debenture, the
shares of Common Stock issuable to the Debenture and the
warrants, and that it will be an accredited investor on each date
it exercises the Series A Warrant and the Series B Warrant. The
Company did not engage in any general solicitation in connection
with the sale of securities to the Securities Purchase Agreement.
The Sale of Securities to the Securities Purchase Agreement did
not, and the sale of Common Stock upon the exercise of the
warrants will not, involve a public offering.

(d) Exhibits