The ImmuPharma PLC (LON: IMM) share price plunged 16.7% after announcing plans to raise £1.35 million via a share subscription, issuing 67,500,000 new ordinary shares priced at 2p each. The adverse reaction from shareholders was expected due to the discount offered to the participating investors.
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The subscription comprises a Sharing Agreement of £1.0 million and Direct Subscriptions of £0.35 million. The sharing agreement is between ImmuPharma and Lanstead Capital Investors L.P., which currently owns 7.97% of the company. Lanstead has agreed to subscribe to 50 million new ordinary shares priced at 2p each for £1.0 million.
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The £1.0 million subscription is based on the Sharing Agreement signed by the two companies. Lanstead will also subscribe to additional ordinary shares worth £0.2 million, while an institutional investor will raise the remaining £0.15 million.
The company also intends to raise a maximum additional £0.5 million via the Winterflood Retail Access Platform (WRAP). The retail offer will allow qualifying investors to invest in the ordinary shares on the same terms as the Direct Subscription Shares.
The 2 pence issue price offered to investors by ImmuPharma represents a 16.7% discount to the closing mid-market price of 2.4p of the ordinary shares as of yesterday, 30 August 2023, the latest business date before the subscription and direct subscription announcement.
The funds raised will be used to invest in the company’s R&D pipeline for general working capital purposes and cash expenses associated with the fundraising of about £0.1 million.
Tim McCarthy, ImmuPharma’s Chairman and CEO, said: “We are delighted to have reached an agreement with Lanstead, our largest and long-standing shareholder, to provide additional funding for the Company, which provides us with a clear cash runway to at least the end of 2024. After a period of significant reorganisation of the Company, both in corporate structure and our development portfolio, we are now entering a very important period, and we are poised to see a sustained positive news flow programme going forward.”
The ImmuPharma share price.
The ImmuPharma share price plunged 16.67% to trade at 2.00p, from Wednesday’s closing price of 2.40p.
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