Redwood Pharma secures bridge financing and issues warrants
On June 18, 2020, the Board of Directors of Redwood Pharma AB decided to take up a bridge loan totaling SEK 4.5 million. At the same time, the company issues warrants to the company’s shareholders free of charge. The exercise period for these warrants occurs during the period 5 – 16 October 2020. The subscription price will be calculated with a 30 percent discount on the average weighted closing price of the share during a previous measurement period of 15 trading days.
In this way, the company strengthens its position and endurance in ongoing discussions with future partners. In addition, value-enhancing development work for an upcoming Phase III trial is made possible.
The bridge loan
Redwood Pharma AB (publ) (“Redwood” or “The Company”) borrows SEK 4.5 million from the Danish fund Formue Nord Markedsneutral A / S (“Formue Nord”). The loan falls due on October 31, 2020. An arrangement fee for the loan will be paid through the issuance of 81,818 warrants to Formue Nord under the conditions set out below. Furthermore, the loan will run at an interest rate of 1% per month to be paid in cash in connection with payment of the capital amount.
The Company has, as authorized by the Annual General Meeting on May 11, 2020, decided to issue a further total of 937 025 warrants free of charge to existing shareholders who own shares on the record date. The record date will be announced as soon as the warrants are registered with the Swedish Companies Registration Office. For each full sixteen (16) shares, one (1) warrant is received.
Each warrant entitles, during the period 5 – 16 October 2020, to subscribe for one (1) new share in the Company at a subscription price corresponding to 70% of the volume weighted average price of Redwood’s share during the period 10 – 30 September 2020, but not more than SEK 14.65.
The amount that Redwood will receive upon subscription of the warrants is thus dependent on the development of the Redwood share. Upon full subscription of the warrants, Redwood will receive up to approximately SEK 14.9 million before transaction costs, which are estimated to amount to approximately SEK 0.6 million.
Upon full subscription of all warrants, the company’s share capital will increase by SEK 203,768.60 from SEK 2,998,481.80 to SEK 3,202,250.40. In this case, the number of shares will increase by 1,018,843 from 14,992,409 to 16,011,252. The dilution effect amounts to 6.36% of the number of shares and votes in the Company.
Redwood intends to apply for listing of the warrants at Spotlight Stock Market as soon as possible after the delivery of the warrants has been completed.
A word from the CEO
“As we now approach the final analysis of the topline results from our clinical trial, management is still very satisfied with these and the potential that RP101 shows. We have now developed detailed plans for the next step in the process of taking the product through phase III. We continue to be in active discussions with a number of international pharmaceutical companies regarding participation in the next phase of the development program in order to realize and maximize the value of RP101. In light of the challenges posed by the COVID-19 pandemic, the transactions we announce today will allow the company to continue some value-enhancing development work and provide time and flexibility to secure the best possible agreement for our shareholders, preferably in the form of a license or co-development agreements. Together with Redwood Pharma’s other management, I intend to make this all come true, says CEO Martin Vidaeus.
Eminova Fondkommission AB acts as financial advisor and Advokatfirman Lindahl KB is legal advisor in connection with the transaction.
For more information:
Martin Vidaeus, CEO Redwood Pharma AB (publ.)
Tel: +46 (0) 70 232 29 29
This information is information that Redwood Pharma AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on June 18, 2020.
About Redwood Pharma
Redwood Pharma develops ophthalmic products for unmet medical needs. The Company’s first project is the development of drug candidate RP101 with a known active substance against chronic dry eye in postmenopausal women who have moderate to severe symptoms. With the drug delivery platform IntelliGel the release of active substances is controlled. Through the use of IntelliGel, Redwood Pharma can also improve dosing of other established drugs. Redwood Pharma’s strength lies in formulation and early clinical development. Revenues will be generated through licensing agreements with pharmaceutical companies that have capabilities to manufacture and sell commercial products worldwide.
Redwood Pharma AB (publ.) is listed on the Spotlight Stock Market (Ticker: REDW.ST, ISIN: SE008294789).
For more information visit: www.redwoodpharma.com