On August 27, 2019 ESSA Pharma Inc. (NASDAQ: EPIX; TSXV: EPI) ("ESSA" or the "Company"), a pharmaceutical company focused on developing novel therapies for the treatment of prostate cancer, is reported that, further to its previously announced equity offering, it has closed a public offering of equity securities of the Company in Canada and a concurrent private placement of equity securities in the United States for aggregate gross proceeds of US$36 million (the "Offering") (Press release, ESSA, AUG 27, 2019, View Source [SID1234539032]). The Offering was led by Soleus Capital and included RA Capital Management as a new investor. Existing investors, including BVF Partners LP, Omega Funds, and Eventide Funds, among others, also participated in the Offering.

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The Company intends to use the net proceeds of the Offering primarily to complete the Phase 1 dose-escalation and extension studies, Phase 1 combination studies with recent anti-androgens and initiate Phase II studies. In addition, the Company plans to conduct preclinical studies with EPI-7386 in additional prostate and breast cancer models as well as to continue the development of additional Aniten molecules. According to current plans, the net proceeds combined with the company’s current cash reserves are expected to provide sufficient cash resources through 2022.

The Offering was completed in each of the provinces of British Columbia, Alberta and Ontario by way of a prospectus supplement dated August 23, 2019 to ESSA’s base shelf prospectus dated July 12, 2018 and in the United States on a private placement basis pursuant to Rule 506(c) of Regulation D under the Securities Act of 1933, as amended (the "U.S. Securities Act"). Pursuant to the Offering, ESSA issued a total of 6,080,596 common shares and 11,919,404 pre-funded warrants in lieu of common shares of the Company at a price of US$2.00 per security for aggregate gross proceeds of US$36,000,000. Each pre-funded warrant (together with the common shares, the "Securities") entitles the holder thereof to acquire one common share at a nominal exercise price for a period of 60 months following the closing of the Offering.

The Offering was undertaken on a best efforts basis pursuant to the terms and conditions of an agency agreement (the "Agency Agreement") dated August 23, 2019 between the Company and Bloom Burton Securities, Inc. ("Bloom Burton") as the Company’s sole agent for the Offering in Canada. Oppenheimer & Co. Inc. ("Oppenheimer", together with Bloom Burton, the "Agents") acted as the exclusive U.S. placement agent. The Agents were paid a cash commission equal to 7.0% of the gross proceeds of the Offering (except in respect of Securities issued to certain specified purchasers, in which case the cash commission was reduced to 3.5%).

The issuance of the common shares under the Offering constitutes a related-party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") due to the participation by certain insiders of the Company. These transactions are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of any securities issued to nor the consideration paid by such persons exceeds 25.0% of the Company’s market capitalization.

The Securities have not been registered under the U.S. Securities Act or any state securities laws, and accordingly, they may not be offered or sold to, or for the account or benefit of, persons in the United States, or "U.S. persons," as such term is defined in Regulation S promulgated under the U.S. Securities Act ("U.S. Persons"), except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom.