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Prospectus
Supplement No. 2
(To
Prospectus dated April 14, 2006)
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Filed
Pursuant to Rule 424(b)(3)
File
No. 333-129680
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ZIOPHARM
Oncology, Inc.
7,462,095
Shares
Common
Stock
The
information contained in this prospectus supplement amends and updates our
prospectus dated April 14, 2006, as supplemented by Prospectus Supplement No.
1
dated April 26, 2006 (collectively, the “Prospectus”), and should be read in
conjunction therewith. Please keep this prospectus supplement with your
Prospectus for future reference.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
supplement or the Prospectus is truthful or complete. Any representation to
the
contrary is a criminal offense.
The
date
of this prospectus supplement is May 3, 2006
Completion
of Private Placement - Sale of Common Stock and Warrants
Pursuant
to subscription agreements with certain institutional and other accredited
investors, on May 3, 2006 we completed the sale of an aggregate of 7,991,256
shares (the “Shares”) of our common stock at a price of $4.63 per share in a
private placement. Each investor also received a five-year warrant to purchase,
at an exercise price of $5.56 per share, an additional number of shares of
common stock equal to 30 percent of the shares purchased by such investor in
the
private placement. In the aggregate, these warrants entitle investors to
purchase an additional 2,397,392 shares of our common stock. The total gross
proceeds resulting from the private placement was approximately $37 million,
before deducting selling commissions and expenses. Following the completion
of
the private placement, we have 15,264,248 shares of common stock
outstanding.
We
engaged Paramount BioCapital, Inc. and Griffin Securities, Inc. as co-placement
agents in connection with the private placement. In consideration for their
services, we paid the co-placement agents, and certain selected dealers engaged
by them, aggregate cash commissions of $2,589,966 and issued 7-year placement
agent warrants to purchase an aggregate of 799,126 shares (10 percent of the
shares sold in the private placement) at an exercise price of $5.09 per share.
We also agreed to reimburse the co-placement agents for their accountable
expenses incurred in connection with the private placement.
Pursuant
to the private placement, we agreed to use our best efforts to (i) file a
registration statement covering the resale of the shares of common stock sold
in
the private placement, and the shares of common stock issuable upon exercise
of
the investor warrants and the placement agent warrants, within 30 days following
the closing date of the private placement, and (ii) use our reasonable
commercial efforts to cause the registration statement to be effective within
120 days after the closing date.
None
of
the securities sold and issued in the private placement (including the shares
of
common stock issuable upon exercise of the investor warrants and placement
agent
warrants), were registered under the Securities Act of 1933, as amended, and
therefore may not be offered or sold in the United States absent registration
or
an applicable exemption from registration requirements. For these issuances,
we
relied on the exemption from federal registration under Section 4(2) of the
Securities Act and/or Rule 506 promulgated thereunder, based on our belief
that
the offer and sale of the securities did not involve a public offering as each
investor was “accredited” and no general solicitation was involved in the
private placement.
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