On July 21, 2023 RedHill Biopharma Ltd. (Nasdaq: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company, reported that it has entered into definitive agreements with institutional investors for the purchase and sale of 1,301,923 of the Company’s American Depositary Shares ("ADSs") (or ADS equivalents), each ADS representing four hundred (400) ordinary shares, at a purchase price of $1.35 per ADS (or ADS equivalent), in a registered direct offering (Press release, RedHill Biopharma, JUL 21, 2023, View Source [SID1234633368]).
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The Company has also entered into a definitive agreement with a certain holder of its existing Class A warrants exercisable for 1,500,000 ADSs, in the aggregate, to exercise its warrants at a reduced exercise price of $1.35 per ADS, in exchange for new warrants as described below.
H.C. Wainwright & Co. is acting as the exclusive placement agent for the transactions.
The closing of the offering and warrant exercises is expected to occur on or about July 25, 2023, subject to the satisfaction of customary closing conditions. The gross proceeds to the Company from the transactions are expected to be approximately $3.8 million, before deducting the placement agent’s fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from these transactions for general working capital, acquisitions, research and development, and general corporate purposes.
The securities described above other than the new warrants are being offered by the Company, and the ADSs issuable upon exercise of the Class A warrants are registered, pursuant to a "shelf" registration statement on Form F-3 (File No. 333-258259) previously filed with the Securities and Exchange Commission (the "SEC") on July 29, 2021, and declared effective by the SEC on August 9, 2021. The offering of the securities in the registered direct offering is made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the registered direct offering will be filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, on the SEC’s website at View Source or by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (212) 865-5711 or e-mail at [email protected].
In consideration for the immediate exercise of the warrants for cash, the exercising holder (i) will receive new warrants to purchase ADSs in a private placement and (ii) have the exercise price of its existing Class B warrants exercisable for 1,500,000 ADSs, in the aggregate, reduced to $1.80 per ADS. The new warrants will be exercisable into an aggregate of up to 1,500,000 ADSs, at an exercise price of $1.80 per ADS and shall be exercisable until April 3, 2028. The new warrants described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act"), and Regulation D promulgated thereunder and, along with the ADSs representing ordinary shares underlying such warrants, have not been registered under the Act, or applicable state securities laws. Accordingly, the new warrants and the ADSs underlying the warrants may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Act and such applicable state securities laws. As part of the transaction, the Company has agreed to file a resale registration statement on Form F-3 with the SEC within 15 days of the closing to register the resale of the ADSs underlying the new warrants issued in the private placement.
In connection with the registered direct offering, the Company also has agreed that (i) certain existing warrants to purchase up to an aggregate of 330,106 ADSs at an exercise price of $4.75 per ADS and (ii) certain existing warrants to purchase up to an aggregate of 971,817 ADSs at an exercise price of $4.6305 per ADS, will each be amended, effective upon the closing of the offering, so that the amended warrants will have a reduced exercise price of $1.80 per ADS.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.