On August 18, 2023 Imugene Limited (ASX:IMU) (Company), a clinical stage immuno-oncology company, reported that it has received firm commitments from institutional and sophisticated investors for a $35 million placement (Placement Subscribers) of approximately 416.7m new fully paid ordinary shares (New Shares) in the Company at a price of $0.084 per share (Placement) (Press release, Imugene, AUG 18, 2023, View Source [SID1234634487]).

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The Placement received strong interest and support from specialist biotech institutional investors, as well as a number of the Company’s Directors and key management personnel who have committed approximately $840,000 (part of which shall be subject to shareholder approval at an extraordinary general meeting to be convened by the Company shortly).

The Placement is being followed by a share purchase plan (SPP), to raise approximately $30 million, for existing eligible shareholders (Eligible Shareholders) at the lower of $0.084 and a 2.5% discount to the 5-day VWAP up to and including the closing date of the SPP.

Under the Placement and SPP (together, the Offer), Placement Subscribers and Eligible Shareholders are anticipated to receive one free option for every New Share (New Options) subscribed for under the Offer (Options Offer). The New Options will have an exercise price of $0.118 per option with an expiration of 31 August 2026 and will be subject to shareholder approval. It is intended that the New Options will be quoted on the ASX. The funds raised from the Offer will be used:
 to make the upfront payment of US$8 million to Precision Biosciences Inc. (NASDAQ GS: DTIL) in accordance with the terms of the licence agreement entered into between the Company and Precisions Biosciences Inc. on 16 August 2023 (Licence Agreement);
 to meet the deferred consideration and milestone payment obligations under the Licence Agreement, including for the completion of the Phase 1b clinical trial for the licensed Azer-cel Allogeneic CD19 Car-T technology; and
 for associated manufacturing, clinical trial, regulatory and working capital costs relating to the Licence Agreement.

Further details in relation to the Licence Agreement can be found in the Company’s announcement dated 16 August 2023. In relation to the Offer, Imugene Founder and Executive Chairman Paul Hopper said: "I am delighted with the very strong support shown for the raise with institutional interest coming from Australia, Asia in particular, and the US. It was very important to the Board that our loyal individual shareholders be offered the opportunity to also participate via the SPP, and we are glad to say that their voice has been heard". Imugene Managing Director and CEO Leslie Chong said: "We appreciate the strong support and belief from new and existing investors in our Company’s vision. This raise places Imugene in an enviable position with regards to its balance sheet with the financial horsepower to execute across all our platforms. I thank all our investors for the confidence they have shown in our company." Bell Potter Securities Limited is acting as Lead Manager to the capital raising.

OFFER

About the Placement

Under the terms of the Placement, the Company has secured commitments of $35 million and proposes to issue a total of 416,666,667 New Shares to Placement Subscribers at a price of $0.084 per share, representing a discount of 10.64% to the last close on Tuesday, 15 August 2023 ($0.094), and a discount of 12.38% to the 20-day VWAP up to, and including, Tuesday, 15 August 2023 ($0.096). The Placement is being conducted under Imugene’s existing placement capacity pursuant to ASX Listing Rule 7.1, save for those commitments by certain Directors and will be subject to prior shareholder approval.

About the SPP

The Company will also offer a SPP to Eligible Shareholders at a price equal to the lower of:  $0.084 (being the same price as for the Placement); and  a 2.5% discount to the 5-day VWAP up to and including the closing date of the SPP. Under the SPP, Eligible Shareholders listed on the Imugene register at 7:00pm (Sydney time) on the record date of Thursday, 17 August 2023 with an address in Australia or New Zealand will be offered the opportunity to apply for up to $30,000 of fully paid ordinary New Shares in Imugene, without incurring brokerage fees or other transactions costs, irrespective of their holding size. The SPP is not underwritten.

Notwithstanding the target raise amount of $30 million, the Company reserves its right to increase or decrease the amount to be raised under the SPP. Any funds raised in excess of the target raise amount would also be used to fund the development of the CAR T drug Azer-Cel technology and associated costs relating to the Licence Agreement. The SPP shares will be issued pursuant to Exception 5 in ASX Listing Rule 7.2 and will not count towards Imugene’s placement capacity.

About the Options Offer

Under the Offer, Imugene intends to issue one free attaching New Option for every New Share subscribed for by Placement Subscribers and Eligible Shareholders under the SPP, for an aggregate of approximately 773.9m New Options to be issued. The New Options will have an exercise price of $0.118, and will expire on 31 August 2026. The offer for New Options will be set out in a prospectus (Prospectus) and the issuance of the New Options will be subject to shareholder approval at an extraordinary general meeting to be convened shortly.

Other information
The SPP (and Options Offer) will be made under a transaction specific Prospectus which is anticipated to be lodged with ASIC in accordance with the above timetable. Eligible Shareholders should carefully consider the Prospectus before deciding to apply under the SPP. Eligible Shareholders who wish to participate in the SPP will need to
complete the personalised application form (Application Form).

All dollar references are to the Australian dollar unless otherwise stated.