A clinical stage oncology company, Pharmaust Limited (ASX: PAA) had on 26 February 2019 published its rights issue offer document. The company had intended to raise up to $2 million via the rights issue. The offer was scheduled to close on 19 March 2019. Today the company reported an update on the rights issue.
The company informed the exchange that it had raised $1.3 million in the rights issue. The total offer uptake was at 66 percent, resulting in a 34 percent shortfall. The shortfall to be placed through the lead manager to the issue, Alto Capital.
It is to be noted that the shares were offered on the basis of two new shares for every five shares held as on 21 February 2019 (Record date), and the shares were issued at 2.5 cents.
The announcement by PAA on the rights issue provided details on the overall participation. The company received subscriptions for 52,404,851 shares and in the process raised $1,310,121.55. The company would allot the shares to the shareholders who participated as per the timetable released by the company.
The company Directors participated in the rights issue and took up their rights issue entitlements in full. The Directors invested $192,584.83 in the company.
The issue did not manage to get a 100 percent subscription. Further, the shortfall of 27,715,629 shares would be placed through the lead manager as per the clause 3.10 of the offer document.
Commenting on the rights issue proceedings, PAA CEO Dr. Roger Aston stated that the management was pleased with the outcome and said that the proceeds would be used to complete the Phase I and II clinical programs examining anticancer activity of the monepantel in dogs with cancer. Also, he highlighted that similar anticancer clinical trials would be initiated on humans with cancer.
Prior to the rights issue, the company had current funds of approximately $625,000 as reported in the offer document. Post the rights issue, the company was intending to increase its cash reserves by $2,003,007. As per their plan (assuming full subscription), the company plans to spend ~$540,000 on human clinical trials, $852,357 on its working capital, and around $515,000 to finalise MPL tablet production for canine trials. The company had recently released an update on its MPL tablets, and same could be read here.
The total number of shares post full subscription of the rights issue would be 280,420,930.
The stock since its listing has delivered a return of -89.46%. However, in the past six months, it has delivered a return of 10.22%. The shares of PAA closed the day’s trading at A$0.036 on ASX (As on Fri 22 Mar 19) down by 2.857% as compared to its previous day close.
Pharmaust Limited’s (ASX: PAA) market capitalization is ~ $7.01 million. The total number of outstanding shares is ~200.23 million. The avg. trading volume is 439,777. The Stock’s 52-week high price is A$0.058, and the 52-week low price is A$0.030. As per the latest ASX update, the company’s EPS stood at -0.008 AUD.