On August 23, 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 a public offering of equity securities of the Company in Canada and a concurrent private placement of equity securities in the United States (the "Offering") (Press release, ESSA, AUG 23, 2019, View Source [SID1234538966]). The Offering is being led by Soleus Capital and includes RA Capital Management as a new investor. Existing investors, including BVF Partners LP, among others, are also co-investing in the Offering.

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The Offering will be conducted 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 intends to issue up to 18,000,000 common shares (or pre-funded warrants in lieu of common shares) of the Company at a price of US$2.00 per common share for aggregate gross proceeds of up to US$36,000,000. Each pre-funded warrant (together with the common shares, the "Securities") entitles the holder thereof to acquire one common share (a "Warrant Share") at a nominal exercise price for a period of 60 months following the closing of the Offering.

The Offering will be 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") will act as the exclusive U.S. placement agent. The price of the Securities was determined by negotiation between the Company and the Agents in the context of the market.

The Company has applied to list the additional common shares and the Warrant Shares on the TSX Venture Exchange ("TSXV") and the Nasdaq Capital Market ("Nasdaq"). Listing will be subject to satisfying all of the requirements of the TSXV and Nasdaq. The Company expects to close the Offering on or about August 27, 2019, or such other date as may be mutually agreed to by the Company and the Agents, subject to satisfaction of customary closing conditions, including, but not limited to, the receipt of all necessary stock exchange approvals, such as the conditional approval of the TSX.

The Company intends to use the net proceeds of the Offering primarily to complete the Phase 1 dose-escalation, Phase 1 expansion, and Phase 1 combination studies with EPI-7386. In addition, the Company plans to conduct additional preclinical studies with EPI-7386 in various preclinical cancer models including prostate and breast cancer as well as to continue the development of additional Aniten molecules. The net proceeds from the Offering will also be used for working capital and general corporate purposes.

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 expected 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 would exceed 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, 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.