LONDON (Alliance News) - ValiRx PLC on Friday said it has entered into a GBP1.3 million subscription agreement with European High Growth Opportunities SF.
The stock was trading 17% lower on Friday at 0.44 pence a share.
The clinical stage biotechnology company said the agreement is split into three equal tranches of 71.0 million shares at a price of 0.6 pence per share, raising GBP426,000 per tranche.
ValiRX said it will pay an aggregate structuring fee totalling GBP278,000 to European High Growth in three equal instalments of GBP92,667 following each of the tranches.
Under the terms, European High Growth has committed convertible funds of up to GBP6.0 million with a 0% coupon. The first tranche of GBP500,000 will then be followed by 22 additional tranches of GBP250,000.
European High Growth will secure an option to buy ValiRX shares equivalent to GBP1.5 million during a period of five years.
The company said the exercise price is to be calculated as 120% of the lower of either the lowest closing bid price in the 15 days immediately preceding the date of the signing of the letter of intent or immediately preceding the request to issue the first tranche.
Additionally, the European High Growth will have the option to purchase an amount of ValiRX's shares equivalent to 15% of the value of each tranche of convertible funds during a period of five years. The exercise price will be calculated on the same terms.
"This investment into the company at a premium to the recent share price is an exciting endorsement of our work to develop ground-breaking anti-cancer drugs and it will enable us to conclude the current trial of VAL201 and will provide us with a funding pathway to add real value to our VAL301 pre-clinical asset," said ValiRx Chief Executive Satu Vainikka.
"While a portion of the funding made available as part of this agreement will be used to both conclude the VAL201 clinical trial and progress VAL301 into the clinic, having access to additional funds will provide ValiRx with the flexibility to invest in further research and development and a strengthened position when negotiating licensing and joint venturing deals with potential partners," added Vainikka.