On December 14, 2023 TME Pharma N.V. (Euronext Growth Paris: ALTME), a biotechnology company focused on developing novel therapies for treatment of cancer by targeting the tumor microenvironment (TME), reported that it has successfully completed its capital increase with preferential subscription rights through the issuance of new shares with associated warrants for an amount of €2.7 million (the "Rights Issue") (Press release, TME Pharma, DEC 14, 2023, View Source [SID1234638585]).

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"We are very grateful to all our investors for their participation in this latest successful financing for TME Pharma, which we are convinced offers a great opportunity and one which I have subscribed to1," said Aram Mangasarian, CEO of TME Pharma. "We extend our thanks to our existing shareholders to whom we offered the opportunity to minimize their dilution linked to this capital raise by providing preferential subscription rights. We are thrilled to see their significant participation and consider it a sign of strong support for the company. And we warmly welcome our new investors who are joining us at the beginning of a crucial period in our mission of developing our lead asset NOX-A12 in brain cancer. I’m pleased to report that this capital injection provides sufficient flexibility to finalize our formal advice meeting with the FDA on the next clinical and regulatory steps for NOX-A12, file our IND and expedited regulatory pathway applications and allows us to step up the search for potential partners to collaborate with us in bringing NOX-A12 to market in the fastest, most efficient way possible."

Following the subscription period from November 30 to December 11, 2023, total subscription orders amounted to 5,076,880 ABSA Y for an amount of €1,269,220, representing a subscription rate of 46.9%. Subscriptions on an irreducible basis represented 4,542,295 ABSA Y for €1,135,573.75. Subscriptions on a reducible basis represented 334,585 ABSA Y for €83,646.25. Free subscriptions represented 200,000 ABSA Y for €50,000. Considering the number of ABSA Y subscribed for at the end of the period, €1,437,162 corresponding to 5,748,648 ABSA Y was guaranteed by a group of Dutch investors in line with their commitment to bring the capital increase to the total amount of €2.7 million gross.

The gross proceeds of the Rights Issue amounted to €2.7 million and resulted in the issuance of 10,825,528 ABSA Y (containing 10,825,528 new shares and 10,825,528 Warrants Y) subscribed at a price of €0.25. Settlement and delivery of the new shares and the attached Warrants Y, as well as their admission to trading on Euronext Growth Paris, are scheduled for December 18, 2023. The new shares will be listed on the same quotation line as the existing shares, under ISIN code NL0015000YE1, and the Warrant Y will be listed on a separate quotation line under ISIN code NL0015001SS1. Warrants Y have maturity period until February 16, 2024, with two periods of exercise: from January 10 to January 16, 2024, and from February 12 to February 16, 2024. Each 5 Warrants Y entitle the holder to subscribe to 2 ABSA Z (2 new shares with 2 Warrants Z attached). Each series of 4 Warrants Z entitle the holder to subscribe to 5 new shares with an exercise price of €0.20 per Warrant Z and a maturity of June 30, 2025, with one period of exercise per quarter. See a dedicated "TME Rights Issue" page on the company’s website for further details.

Considering the net proceeds of the Rights Issue and based on the company’s current budget projections, the company’s cash runway extends into May 2024. The net proceeds from this operation will primarily be used:

to reach increased data maturity in the ongoing NOX-A12 GLORIA Phase 1/2 trial in glioblastoma and to advance discussions with the US Food and Drug Administration (FDA) past regulatory milestones (approx. 1/3rd of proceeds)
for general corporate purposes including intensifying interactions with investors and potential industry partners (approx. 1/3rd of proceeds)
to buy back 898 out of 1,998 outstanding convertible bonds previously issued under agreement with Atlas Special Opportunities and subject the remaining convertible bonds to a lock-up until April 1, 2024 (approx. 1/3rd of proceeds)
The table below summarizes the maximum dilutive potential for an investor who did NOT participate in the transaction should all Warrants Y and all Warrants Z be exercised, and excluding any potential additional dilution. Shareholders who participate fully in the transaction, i.e. who purchased the ABSA Y and subsequently exercise both Warrants Y and Z will not be diluted by this transaction.

Description

Shares to be issued

Total shares outstanding

Dilution (max)

Shareholder starting with 1% would then hold

Issue of ABSA Y from the capital increase
(Dec 18, 2023)

10,825,528

17,320,845

62.50%

0.38%

Exercise of Warrant Y
(latest on Feb 16, 2024)

4,330,211

21,651,057

70.00%

0.30%

Exercise of Warrant Z
(latest on June 20, 2025)

5,412,764

27,063,821

76.00%

0.24%

For more information on the Rights Issue, please consult the Rights Issue dedicated section on the TME Pharma website.