Novogen (ASX:NRT) has announced completion of a $15 million capital raise with US-based institutional investors.
Under the agreements, the company will issue approximately 51 million fully-paid ordinary shares plus one attaching 6-month option and half of one attaching 5-year option for every ordinary share issued.
Existing shareholders of the company will be given an opportunity to participate at the same price, with a 1 for 6 non-renounceable rights issue offering of fully-paid ordinary shares to raise up to a maximum of approximately $15 million
Participants will also receive, for no additional cash consideration, one 6-month option and half of one 5-year option for every one share issued under the Rights Issue.
Under the terms of the Placement and the Rights Issue, Novogen proposes raising up to a total of $30.5 million through the issue of an aggregate of up to approximately 98.7 million fully-paid ordinary shares at a price of $0.30 each, comprising approximately 51 million shares under the Placement and up to approximately 47 million shares under the Rights Issue.
The $0.30 issue price represents a 10 per cent discount to the 5-day VWAP leading up to Friday 17 April 2015.
The Company has also agreed to grant to the investors under both the Placement and the Rights Issue, for no additional cash consideration: 6-month options to purchase up to an aggregate of approximately 98 million ordinary shares at an exercise price of $0.30 per option; and, 5-year options to purchase up to an aggregate of approximately 49 million ordinary shares at an exercise price of $0.40 per option.
Issuance of the options under the Placement is subject to Novogen receiving shareholder approval at a general meeting, which is expected to be held in June 2015.
Graham Kelly, Novogen Group CEO, said, “The Company is about to enter a significant growth phase. The last two years have been about laying the groundwork with our two technology platforms. That work has brought us now to a position of being in a position to exploit the considerable opportunities that those two proprietary drug technology platforms offer.”
He continued, “We have identified 3 needs for funding. The first is to provide a runway for our 3 lead oncology candidate drugs to put them in a position (Phase 1b/2a, Phase 0) where we might expect to see objective evidence of clinical benefit.
“The second need is to build on the highly promising data we are seeing with both technology platforms in a range of non-oncology fields. Five such programs are underway, each with the potential to develop into major new areas of therapeutic opportunity.
“The third need is to retain our independence in order to maximize shareholder value. Novogen has the opportunity to grow quickly into a significant drug discovery company. The further we take that opportunity as an independent company, the greater the shareholder value. I believe that the Company has the intellectual property and the management expertise to achieve its goal of becoming a major player in the international biotechnology sector, and the fund-raising that we have announced today is key to that,” Mr Kelly added.
