RedHill Biopharma Announces Definitive Agreement for Up To $6 Million Private Placement with a Single Investor

On March 8, 2023 RedHill Biopharma Ltd. (Nasdaq: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company, reported agreement, with a single investor, for the issuance of convertible promissory note in the principal amount of up to $6 million, convertible into American Depositary Shares ("ADS") and warrants to purchase ADSs of the Company, pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (Press release, RedHill Biopharma, MAR 8, 2023, View Source [SID1234628351]).

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Gross proceeds to the Company under the promissory note will be up to $6 million, subject to certain conditions, before costs and fees, including prepaid interest of eight (8%) percent. Advances under the promissory note are to be made in three tranches of $2 million, $1 million, and $3 million, respectively. The first tranche will be paid upon closing, and the second and third tranches will be advanced following effectiveness of a registration statement that the Company will file with the Securities and Exchange Commission covering the resale of ADSs to be acquired by the investor under the convertible promissory note and the warrants. The promissory note has a one-year term and must be converted by the end of the term. The conversion price of the promissory note is 93% of the closing price of the Company’s ADSs on the trading day immediately preceding the date of any conversion by the investor.

The number of warrants to be issued will be one-fourth of the value of each tranche divided by $0.21, today’s ADS closing price. Each warrant will have a term of three years commencing six months following closing and have an exercise price equal to $0.21.

RedHill intends to use the net proceeds from this placement for general working capital, acquisitions, research and development and general corporate purposes.

The convertible promissory note and warrants described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act"), and Regulation D promulgated thereunder and, along with the ADSs underlying the promissory note and the warrants, have not been registered under the Act, or applicable state securities laws. Accordingly, the warrants and underlying ADSs may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Act and such applicable state securities laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

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