Alterity Therapeutics (ASX:ATH) entered into an underwriting agreement with MST Financial Services, under which MST Financial agreed to underwrite the exercise of up to a total of 8.4 million unexercised ATHO listed options ahead of their expiry, according to a Monday Australian bourse filing.

There are currently 15.9 million listed ATHO options on issue, exercisable at AU$0.50 and due to expire on Tuesday. MST Financial agreed to underwrite any shortfall arising from options not exercised by optionholders before the expiry date, up to a maximum of 8.4 million options. It will subscribe, or procure subscriptions, for a corresponding number of new fully paid ordinary shares in the firm.

MST Financial will receive an underwriting fee of 7% of the gross proceeds raised from the exercise of options underwritten by it.

The options are expected to raise around AU$4.2 million before costs, and the proceeds are expected to support continued late-stage clinical development of its ATH434 candidate in multiple system atrophy, as well as general working capital.

Its shares fell 1% in recent trading on Monday.