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Appili Therapeutics Inc. (TSX: APLI) (the “Company” or “Appili”), a biopharmaceutical company focused on drug development for infectious diseases, today announced that it has entered into a $3.5 million convertible security funding agreement (the “Agreement”) with Lind Global Fund II, LP, an investment entity managed by The Lind Partners, a New York based institutional fund manager (together "Lind").
Appili Therapeutics intends to use the funding to support the operations of the Company as it prepares for top-line data from its PRESECO Phase 3 trial evaluating Avigan®/Reeqonus™ (favipiravir) as a potential oral therapy for patients with mild-to-moderate COVID-19. The funding will also be used to advance the broader Appili pipeline, including ATI-2307, a novel clinical stage antifungal expected to enter Phase 2 study in 2022.
“Appili is working to develop medicines for some of the most urgent health challenges facing the world today, including the COVID-19 pandemic and the growing threat of Candida auris, a highly drug-resistant fungus that is spreading within hospital settings,” said Dr. Armand Balboni, Chief Executive Officer, Appili Therapeutics. “This funding from Lind will help us move our pipeline forward to address these important public health threats, as well as provide Appili greater operational flexibility.”
Under the terms of the Agreement, Lind will make an investment of $3.5 million in exchange for a secured convertible security with a principal amount of $4.095 million (“Face Value”) and a 24-month maturity date. Appili will receive net proceeds of $3.395 million from the funding (after deducting a commitment fee of $105,000). Lind will be entitled to convert up to 1/20th of the Face Value per month into Class A common shares of Appili (“Shares”) at a price equal to 85% of the five-day volume weighted average share price (“VWAP”) immediately prior to conversion (the “Conversion Price”). Shares underlying the convertible security will be subject to resale restrictions for a period of four months and one day following the closing date.
The Agreement also includes provisions entitling Lind to accelerated conversion rates based on Appili’s trading price. Appili has the right to buy-back outstanding Face Value at any time with no penalty. If Appili elects to exercise its buy-back rights, Lind will have the option to convert up to 25% of the Face Value. In addition, if such buy-back right is exercised within 180 days, the Face Value will be reduced to $3,794,000.
As part of the Agreement, Lind will be issued 2,209,874 cash-exercise warrants, exercisable for 48 months, subject to acceleration, with a warrant exercise price of $0.9517, representing a 30% premium to the 20-day VWAP immediately prior to execution of the Agreement.
The convertible security will be secured against all of the assets and property of the Company pursuant to a general security agreement.
The transaction contemplated under the Agreement has been conditionally approved by the Toronto Stock Exchange. Funding under the Agreement is expected to be completed on or before August 20, 2021.
“Lind is excited to invest in Appili Therapeutics at such a critical moment for the company,” said Phillip Valliere, Managing Director from The Lind Partners. “We look forward to helping Appili further accelerate their pipeline and supporting them in their upcoming trials.”
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described herein. The securities offered have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or U.S. persons (as both such terms are defined in Regulation S promulgated under the U.S. Securities Act) absent registration or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities offered in any jurisdiction in which such offer, solicitation, or sale would be unlawful.
About Appili Therapeutics
Appili Therapeutics is an infectious disease biopharmaceutical company that is purposefully built, portfolio-driven, and people-focused to fulfill its mission of solving life-threatening infections. By systematically identifying urgent infections with unmet needs, Appili’s goal is to strategically develop a pipeline of novel therapies to prevent deaths and improve lives. As part of a global consortium, Appili is sponsoring late-stage clinical trials evaluating the antiviral Avigan/Reeqonus for the worldwide treatment and prevention of COVID-19. The Company is also advancing a diverse range of anti-infectives, including a broad-spectrum antifungal, a vaccine candidate to eliminate a serious biological weapon threat, and two novel antibiotic programs. Led by a proven management team, Appili is at the epicenter of the global fight against infection. For more information, visit www.AppiliTherapeutics.com.
About The Lind Partners
The Lind Partners is an institutional fund manager and leading provider of growth capital to small- and mid-cap companies publicly traded in the US, Canada, Australia and the UK. Lind makes direct investments ranging from US$1 to US$30 million, invests in syndicated equity offerings and selectively buys on market. Lind has completed more than 100 direct investments totaling over US$1 billion in value and has been a flexible and supportive capital partner to investee companies since 2011. For more information, please visit www.thelindpartners.com.
Forward looking statements
This news release contains “forward-looking statements”, including with respect to the proposed use of proceeds and the funding timeline. Wherever possible, words such as “may,” “would,” “could,” “should,” “will,” “anticipate,” “believe,” “plan,” “expect,” “intend,” “estimate,” “potential for” and similar expressions have been used to identify these forward-looking statements. These forward-looking statements reflect the current expectations of the Company’s management for future growth, results of operations, performance and business prospects and opportunities and involve significant known and unknown risks, uncertainties and assumptions, including, without limitation, those listed in the annual information form of the Company dated June 23, 2021 and the other filings made by the Company with the Canadian securities regulatory authorities (which may be viewed at www.sedar.com). Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully, and prospective investors should not place undue reliance on the forward-looking statements. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.