TRACON Pharmaceuticals, Inc. (NASDAQ:TCON) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01Entry into a Material Definitive Agreement.

On March 14, 2017, TRACON Pharmaceuticals, Inc. (the Company),
entered into a common stock purchase agreement (the Purchase
Agreement) with Aspire Capital Fund, LLC, an Illinois limited
liability company (Aspire Capital), which provides that, upon the
terms and subject to the conditions and limitations set forth
therein, Aspire Capital is committed to purchase up to an
aggregate of $21.0 million of shares of the Companys common stock
at the Companys request from time to time during a 30 month
period beginning on the effective date of a registration
statement related to the transaction.Upon execution of the
Purchase Agreement, the Company agreed to sell to Aspire Capital
222,222 shares of common stock at $4.50 per share for proceeds of
$1.0 million.Concurrently with entering into the Purchase
Agreement, the Company also entered into a registration rights
agreement with Aspire Capital (the Registration Rights
Agreement), in which the Company agreed to file one or more
registration statements, as permissible and necessary to register
under the Securities Act of 1933, as amended (the Securities
Act), registering the sale of the shares of the Companys common
stock that have been and may be issued to Aspire Capital under
the Purchase Agreement.

Under the Purchase agreement, after the Securities and Exchange
Commission (the SEC) has declared effective the registration
statement referred to above, on any trading day selected by the
Company, the Company has the right, in its sole discretion, to
present Aspire Capital with a purchase notice (each, a Purchase
Notice), directing Aspire Capital (as principal) to purchase up
to 75,000 shares of the Companys common stock per business day,
up to $20.0 million of the Companys common stock in the aggregate
at a per share price (the Purchase Price) equal to the lesser of:

In addition, on any date on which the Company submits a Purchase
Notice to Aspire Capital in an amount equal to 75,000 shares, the
Company also has the right, in its sole discretion, to present
Aspire Capital with a volume-weighted average price purchase
notice (each, a VWAP Purchase Notice) directing Aspire Capital to
purchase an amount of stock equal to up to 30% of the aggregate
shares of the Companys common stock traded on its principal
market on the next trading day (the VWAP Purchase Date), subject
to a maximum number of shares the Company may determine.The
purchase price per share to such VWAP Purchase Notice is
generally 97% of the volume-weighted average price for the
Companys common stock traded on its principal market on the VWAP
Purchase Date.

The Purchase Agreement provides that the Company and Aspire
Capital shall not effect any sales under the Purchase Agreement
on any purchase date where the closing sale price of the Companys
common stock is less than $0.50.There are no trading volume
requirements or restrictions under the Purchase Agreement, and
the Company will control the timing and amount of sales of the
Companys common stock to Aspire Capital.Aspire Capital has no
right to require any sales by the Company, but is obligated to
make purchases from the Company as directed by the Company in
accordance with the Purchase Agreement.There are no limitations
on use of proceeds, financial or business covenants, restrictions
on future financing transactions, rights of first refusal,
participation rights, penalties or liquidated damages in the
Purchase Agreement.In consideration for entering into the
Purchase Agreement, concurrently with the execution of the
Purchase Agreement, the Company issued to Aspire Capital 195,726
shares of the Companys common stock (the Commitment Shares).The
Purchase Agreement may be terminated by the Company at any time,
at its discretion, without any cost to the Company. Aspire
Capital has agreed that neither it nor any of its agents,
representatives and affiliates shall engage in any direct or
indirect short-selling or hedging of the Companys common stock
during any time prior to the termination of the Purchase
Agreement. Any proceeds the Company receives under the Purchase
Agreement are expected to be used for working capital and general
corporate purposes.

The foregoing is a summary description of certain terms of the
Purchase Agreement and the Registration Rights Agreement and, by
its nature, is incomplete.Copies of the Purchase Agreement and
Registration Rights Agreement are filed herewith as Exhibits 99.1
and 4.1, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.All readers are encouraged to
read the entire text of the Purchase Agreement and the
Registration Rights Agreement.

The issuance of the Commitment Shares and all other shares of
common stock that may be issued from time to time to Aspire
Capital under the Purchase Agreement is exempt from registration
under the Securities Act, to the exemption for transactions by an
issuer not involving any public offering under Section 4(a)(2) of
the Securities Act.

On March 14, 2017, the Company issued a press release announcing
that it has entered into the Purchase Agreement with Aspire
Capital. A copy of the press release is attached as Exhibit 99.2
to this Current Report on Form 8-K.

This Current Report on Form 8-K contains forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including statements related to the potential future sale
of shares of the Companys common stock, the price for such sales
under the Purchase Agreement, and the Companys expected use of
proceeds from such sales. The words may, will, could, would,
should, expect, intend, plan, anticipate, believe, estimate,
predict, project, potential, continue, ongoing and similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words.While the Company believes its plans,
intentions and expectations reflected in those forward-looking
statements are reasonable, these plans, intentions or
expectations may not be achieved. The Companys actual results,
performance or achievements could differ materially from those
contemplated, expressed or implied by the forward-looking
statements, including due to the Companys inability to satisfy
the conditions to sell shares under the Purchase Agreement. For
information about the factors that could cause such differences,
please refer to the Companys Annual Report on Form 10-K for the
year ended December 31, 2016, including the information discussed
under the captions Item 1 Business, Item 1A. Risk Factors and
Item 7 Managements Discussion and Analysis of Financial Condition
and Results of Operations, as well as the Companys various other
filings with the SEC. Given these uncertainties, you should not
place undue reliance on these forward-looking statements. The
Company assumes no obligation to update any forward-looking
statement.

Item 3.02Unregistered Sales of Equity Securities.

The information contained above in Item 1.01 is hereby
incorporated by reference into this Item 3.02 in its entirety.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits

About TRACON Pharmaceuticals, Inc. (NASDAQ:TCON)

TRACON Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on the development and commercialization of therapeutics for cancer, wet age-related macular degeneration (wet AMD) and fibrotic diseases. The Company’s research focuses on antibodies that bind to the endoglin receptor, which is essential to angiogenesis (the process of new blood vessel formation) and a contributor to fibrosis (tissue scarring). The Company’s lead product candidate, TRC105, is an endoglin antibody that is being developed for the treatment of multiple solid tumor types in combination with inhibitors of the vascular endothelial growth factor (VEGF) pathway. TRC205 is being developed for the treatment of fibrotic disease. The Company is also developing TRC102, a small molecule that is in clinical development for the treatment of lung cancer and glioblastoma.

TRACON Pharmaceuticals, Inc. (NASDAQ:TCON) Recent Trading Information

TRACON Pharmaceuticals, Inc. (NASDAQ:TCON) closed its last trading session down -0.10 at 4.05 with 21,615 shares trading hands.