On June 11, 2021 The Executive Board of Epigenomics AG (Frankfurt Prime Standard: ECX, OTCQX: EPGNY; the "Company") reported that it has taken a decision in principle, with the approval of the Supervisory Board, to issue a subordinated mandatory convertible bond in an aggregate principal amount of up to EUR 18,150,000.00 (Press release, Epigenomics, JUN 11, 2021, View Source [SID1234583893]). This will be convertible into up to a total of 15,000,000 no-par value registered shares of the Company with a share of up to a total of EUR 15,000,000.00 in the share capital of the Company.
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The mandatory convertible bond will consist of up to 181,500 notes with a nominal amount of EUR 100.00 each, which will be offered for subscription by means of a rights offering initially to existing shareholders of Epigenomics AG. Shareholders will also be given the option of oversubscription. Furthermore, the Company plans to organize stock exchange trading of the subscription rights. The Company will shortly mandate an investment bank to accompany the issue and will start preparing a securities prospectus if legally necessary for the offering. The dates for the publication of a rights offering and the start of the subscription period will be published in due course.
In addition, today, Epigenomics AG has entered into a back-stop agreement with its shareholder Deutsche Balaton Aktiengesellschaft under which the latter has undertaken to acquire all notes in an aggregate principal amount of up to EUR 18,150,000.00 by exercising its subscription rights and by the acquisition of notes not subscribed via subscription rights and oversubscription rights. The obligation of Deutsche Balaton Aktiengesellschaft shall lapse in particular at the end of October 31, 2021, if the rights offering has not been published in the Federal Gazette by that date.
The notes will be non-interest-bearing (zero coupon) and have a term until 2027. In addition to conversion rights for the holders or creditors of the notes, they will also include a conversion obligation for all outstanding notes not yet converted at maturity.
Subject to any anti-dilution adjustments, the conversion price per share is EUR 1.21, i.e. each note with a nominal amount of EUR 100.00 will be convertible into 82 (eighty-two) no-par value registered shares representing EUR 1.00 per share of the Company’s share capital.
Epigenomics AG plans to use the proceeds from the convertible bond issue to finance its operations. Primarily, this is the completion of the development of the blood-based colorectal cancer screening test Epi proColon Next-Gen by conducting a clinical study in the U.S.A., which is required to obtain approval for the test by the U.S. Food and Drug Administration (FDA).