TIDMNSCI
RNS Number : 1995X
NetScientific PLC
25 August 2022
NetScientific plc
("NetScientific", the "Group" or the "Company")
PDS Biotech Completes $35 Million Financing Agreement Led By
Horizon Technology Finance
NetScientific plc (AIM: NSCI), the international life sciences
and sustainability technology investment and commercialisation
Group, announces that its portfolio company, PDS Biotechnology
Corporation (Nasdaq: PDSB), announced that it has entered into a
debt financing agreement led by Horizon Technology Finance
Corporation (NASDAQ: HRZN) ("Horizon") to provide up to a $35.0
million term loan.
As part of the financing, PDS Biotech received an initial
tranche of $25 million at the close. The Company has an option to
receive an additional $10 million. Each advance of the loan will be
repaid in 48 monthly payments consisting of 24 monthly payments of
interest only, followed by 24 monthly payments of principal and
accrued interest. In connection with the financing, PDS Biotech
issued Horizon warrants to purchase up to 4% of the loan amount,
381,625 of its common shares at an exercise price of $3.6685 per
share. Proceeds will be used to support the ongoing clinical
development of PDS0101 and other product candidates within the
company's pipeline and for general working capital purposes.
Frank Bedu-Addo, Chief Executive Officer of PDS Biotech said :
"We are pleased to partner with Horizon, a leading specialty
finance company that has an extensive history of supporting
innovative life science companies.
"We anticipate a number of important milestones across our
oncology and infectious disease programs. This transaction
immediately strengthens our balance sheet and provides the
financial resources necessary to advance the company's clinical
pipeline. We look forward to our meeting with the U.S. Food and
Drug Administration this quarter to discuss the registrational
trial design for our lead program."
Dr. Ilian Iliev, CEO of NetScientific, commented: "PDS is an
outlier In the context of challenging biotech capital market
conditions. This $35m venture debt package by a leading institution
is a significant validation of the PDS team's credibility and the
validity of their investment and corporate development approach.
This loan framework further extends PDS' runway, and provides the
certainty needed for the continued execution of their ambitious
clinical pipeline. We are looking forward to PDS' further clinical
results announcements and progress in their discussions with the
FDA."
Further information with respect to the debt financing agreement
with Horizon is contained in a report that has been filed on Form
8-K by PDS Biotechnology with the Securities and Exchange
Commission and is appended to this announcement and can be viewed
here: Inline XBRL Viewer (sec.gov)
The full text of the announcement from PDS Biotechnology is
available online here: PDS Biotech - PDS Biotech - PDS Biotech
Completes $35 Million Financing Agreement Led By Horizon Technology
Finance
For more information, please contact:
NetScientific Via Walbrook PR
Ilian Iliev, CEO
WH Ireland (NOMAD, Financial Adviser
and Broker)
Chris Fielding / Darshan Patel +44 (0)20 7220 1666
Walbrook PR +44 (0)20 7933 8780 or netscientific@walbrookpr.com
Nick Rome / Tom Cooper 07748 325 236 / 07971 221 972
About NetScientific
NetScientific plc (AIM: NSCI) is a holding company, that invests
in, develops, commercialises and realises shareholder value in life
sciences/healthcare, sustainability and technology companies, which
offer significant growth potential predominately in the UK, EU and
USA.
With the acquisition of EMV Capital in August 2020 and further
investment activities, the Group more than doubled its portfolio
from 8 to 22 companies. These are held as direct subsidiary and
minority stakes, through balance sheet investment or capital under
advisory, varying from start-up private companies to publicly
listed equities.
NetScientific delivers shareholder returns through a proactive
and hands-on management approach to their portfolio companies;
identifying, investing in, and helping to build game-changing
companies. The Group targets value inflection points and the
release of value through partial or full exits from trade sales,
public listings, or equity sales. The Company has a strong
transatlantic and growing international presence, providing
attractive expansion prospects.
NSCI can deploy a capital-light investment structure; utilising
the power of the PLC Brand, and the NetScientific balance sheet to
anchor future investments and achieve a multiplier effect by
attracting 3rd party investment for the portfolio companies.
NetScientific is headquartered in London, United Kingdom, and
was admitted to trading on AIM, a market operated by the London
Stock Exchange, in 2013 (website: netscientific.net ).
Appendix
Venture Loan and Security Agreement
On August 24, 2022, PDS Biotechnology Corporation (the
"Company"), as borrower (the "Borrower"), entered into that certain
Venture Loan and Security Agreement (the "Loan and Security
Agreement") by and among Borrower, PDS Operating Corporation, as
guarantor ("Guarantor", including the Borrower and any subsidiary
of the Borrower party thereto from time to time, collectively, the
"Loan Parties" and each individually a "Loan Party") , the persons
party thereto from time to time as lenders (collectively, the
"Lenders"), and Horizon Technology Finance Corporation, as a lender
and collateral agent for itself and the other Lenders (in such
capacity, the "Collateral Agent").
Term loan Amounts . The Loan and Security Agreement provides for
the following six (6) separate and independent term loans: (a) a
term loan in the amount of $7,500,000 ("Loan A"), (b) a term loan
in the amount of $10,000,000 ("Loan B"), (c) a term loan in the
amount of $3,750,000 ("Loan C"), (d) a term loan in the amount of
$3,750,000 ("Loan D"), (e) a term loan in the amount of $5,000,000
("Loan E"), and (f) a term loan in the amount of $5,000,000 ("Loan
F") (with each of Loan A, Loan B, Loan C, Loan D, Loan E, and Loan
F, individually a "Loan" and, collectively, the "Loans"). Loan A,
Loan B, Loan C, and Loan D are committed Loans and shall be made
available to Borrower upon entering into the Loan and Security
Agreement. Loan E and Loan F are uncommitted Loans that may be
advanced by the Lenders upon their discretion prior to July 31,
2023 upon the satisfaction by Borrower and Guarantor of certain
agreed upon conditions precedents. Borrower may only use the
proceeds of the Loans for working capital or general corporate
purposes.
Maturity . Each Loan matures on the forty-eight (48)-month
anniversary following the applicable Funding Date (defined as any
date on which a Loan is made to or on account of the Borrower under
the Loan and Security Agreement) (the "Maturity Date") unless
accelerated pursuant to agreed upon events of default. All amounts
outstanding under each Loan will be due and payable upon the
earlier of the Maturity Date or the acceleration of the loans and
commitments upon an event of default.
Interest Rate . The principal balance of each Loan bears a
floating interest. The interest rate is calculated initially and,
thereafter, each calendar month as the sum of (a) the per annum
rate of interest from time to time published in The Wall Street
Journal as contemplated by the Loan and Security Agreement, or any
successor publication thereto, as the "prime rate" then in effect,
plus (b) 5.75%; provided that, in the event such rate of interest
is less than 4.00%, such rate shall be deemed to be 4.00% for
purposes of calculating the interest rate. Interest is payable on a
monthly basis based on each Loan principal amount outstanding the
preceding month.
Amortization. Each Loan shall commence amortization upon the
date set forth on the promissory note executed in connection with
the respective Loan, upon which the Borrower is required to
commence making equal payments of principal plus accrued interest
on the outstanding principal amount of the respect Loan (the "Loan
Amortization Date"), and continuing thereafter on the first
business day of each calendar month through the Maturity Date.
Prepayment Premium. The Borrower may, at its option upon at
least ten (10) business days' written notice to the Lenders, prepay
all (and not less than all) of the outstanding Loan by
simultaneously paying to each Lender an amount equal to (i) any
accrued and unpaid interest on the outstanding principal balance of
the Loans; plus (ii) an amount equal to (A) if such Loan is prepaid
on or before the Loan Amortization Date applicable to such Loan,
three percent (3%) of the then outstanding principal balance of
such Loan, (B) if such Loan is prepaid after the Loan Amortization
Date applicable to such Loan, but on or before the date that is
twelve (12) months after such Loan Amortization Date, two percent
(2%) of the then outstanding principal balance of such Loan, or (C)
if such Loan is prepaid more than twelve (12) months after the Loan
Amortization Date but prior to the stated Maturity Date applicable
to such Loan, one percent (1%) of the then outstanding principal
balance of such Loan; plus (iii) the outstanding principal balance
of such Loan; plus (iv) all other sums, if any, that shall have
become due and payable hereunder. No prepayment premium will be
applied to any outstanding balance of any Loan paid on the stated
Maturity Date.
Security . The Borrower's obligations are secured by a security
interest in all of the Loan Parties' respective rights, title,
interests, claims and demands in, to and under all of the Loan
Parties respective properties and other assets, subject to limited
exceptions and excluding the Loan Parties' intellectual
property.
Covenants; Representations and Warranties; Other Provisions .
The Loan and Security Agreement contains customary representations,
warranties and covenants, including covenants by the Loan Parties
limiting additional indebtedness, liens, including on intellectual
property, guaranties, mergers and consolidations, substantial asset
sales, investments and loans, certain corporate changes,
transactions with affiliates and fundamental changes.
Default Provisions . The Loan and Security Agreement provides
for events of default customary for term loans of this type,
including but not limited to non-payment, breaches or defaults in
the performance of covenants, insolvency, and bankruptcy by and/or
of the Company.
Warrants
In connection with the entry into the Loan and Security
Agreement, the Company has issued to Horizon Technology Finance
Corporation and Powerscourt Investments XXV, LP warrants (each,
individually, a "Warrant" and, collectively, the "Warrants") to
purchase an aggregate number of shares of the Company's Common
Stock (as defined below) for each Loan as follows: (a) for Loan A
an amount that is equal to $300,000 divided by the warrant price
for such Warrant, (b) for Loan B an amount that is equal to
$400,000 divided by the warrant price for such Warrant, (c) for
Loan C an amount that is equal to $150,000 divided by the warrant
price for such Warrant, (d) for Loan D an amount that is equal to
$150,000 divided by the warrant price for such Warrant, (e) for
Loan E an amount that is equal to $200,000 divided by the warrant
price for such Warrant, and (f) for Loan F an amount that is equal
to $200,000 divided by the warrant price for such Warrant.
The Warrants, which are exercisable for an aggregate of 381,625
shares, will be exercisable for a period beginning on the Date of
Grant and ending on the earlier of (A) ten (10) years from the Date
of Grant, and (B) the closing of (A) (i) the sale, lease, exchange,
conveyance or other disposition of all or substantially all of the
Company's property or business, or (ii) its merger into or
consolidation with any other corporation (other than a wholly-owned
subsidiary of the Company), or any transaction (including a merger
or other reorganization) or series of related transactions, in
which more than 50% of the voting power of the Company is disposed
of, in each case, for cash or for marketable securities meeting all
of the following requirements: (1) the issuer thereof is then
subject to the reporting requirements of Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and is then current in its filing of all required
reports and other information under the Securities Act of 1933, as
amended, and the Exchange Act, (2) the class and series of shares
or other security of the issuer that would be received by the
holder of a Warrant in connection with a merger were such holder to
exercise or convert such Warrant on or prior to the closing thereof
is then traded on a national securities exchange or
over-the-counter market, (3) the issuer thereof has a market cap of
at least $750,000,000 and (4) such holder would not be restricted
by contract or by applicable federal and state securities laws from
publicly re-selling, within six (6) months and one day following
the closing of such acquisition, all of the issuer's shares and/or
other securities that would be received by such holder in such
merger were such holder to exercise or convert a Warrant in full on
or prior to the closing of such merger. Each Warrant will be
exercisable at a per-share exercise price of $3.6685, which is
equal to the 10 day average closing price prior to June 16, 2022,
the date on which the term sheet relating to the Loan and Security
Agreement was entered into, subject to certain adjustments as
specified in the Warrants.
The foregoing descriptions of the Loan and Security Agreement
and the Warrants are qualified in their entirety by reference to
the Loan and Security Agreement and the form of Warrant each of
which will be filed as exhibits to the Company's quarterly report
on Form 10-Q for the quarter ending September 30, 2022.
Sales Agreement
On August 24, 2022, the Company entered into an At Market
Issuance Sales Agreement (the "Sales Agreement") with B. Riley
Securities, Inc. and BTIG, LLC (each an "Agent" and collectively
the "Agents") with respect to an at-the-market offering program
under which the Company may offer and sell, from time to time at
its sole discretion, shares of its common stock, par value $0.00033
per share (the "Common Stock"), having an aggregate offering price
of up to $50.0 million (the "Placement Shares") through or to the
Agents, as sales agents or principals. The issuance and sale, if
any, of the Placement Shares by the Company under the Sales
Agreement is subject to the effectiveness of the Company's
registration statement on Form S-3 (File No. 333-267041), which was
filed with the Securities and Exchange Commission on August 24,
2022.
Upon delivery of a placement notice and subject to the terms and
conditions of the Sales Agreement, the Agents may sell the
Placement Shares by any method permitted by law deemed to be an "at
the market" offering as defined in Rule 415 of the Securities Act
of 1933, as amended, including, without limitation, sales made
through The Nasdaq Capital Market or on any other existing trading
market for the Common Stock. The Agents will use commercially
reasonable efforts to sell the Placement Shares from time to time,
based upon instructions from the Company (including any price, time
or size limits or other customary parameters or conditions the
Company may impose). The Company will pay the Agents a commission
equal to three percent (3%) of the gross sales proceeds of any
Placement Shares sold through the Agents under the Sales Agreement,
and also has provided the Agents with customary indemnification and
contribution rights.
The Company is not obligated to make any sales of the Common
Stock under the Sales Agreement. The offering of Placement Shares
pursuant to the Sales Agreement will terminate upon the earlier of
(i) the sale of all Placement Shares subject to the Sales Agreement
or (ii) termination of the Sales Agreement in accordance with its
terms.
DLA Piper LLP (US), counsel to the Company, has issued a legal
opinion relating to the Placement Shares. A copy of such legal
opinion, including the consent included therein, is attached as
Exhibit 5.1 hereto.
The foregoing description of the Sales Agreement is qualified in
its entirety by reference to the full text of the Sales Agreement,
which is filed as Exhibit 10.1 to this Current Report on Form 8-K
and incorporated herein by reference.
This Current Report on Form 8-K shall not constitute an offer to
sell or the solicitation of an offer to buy the securities
discussed herein, nor shall there be any offer, solicitation, or
sale of the securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
Item 2.03 Creation of a Direct Financial Obligation or and Obligation under and Off-Balance Sheet Arrangement of a
Registrant.
The information provided in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information provided in Item 1.01 of this Current Report on
Form 8-K regarding the Warrants is incorporated by reference into
this Item 3.02.
Item 8.01 Other Events.
On August 24, 2022, the Company issued a press release regarding
the Loan and Security Agreement. A copy of the press release is
filed as Exhibit 99.1 hereto and incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit
No. Description
5.1 Opinion of DLA Piper LLP (US), dated August 24, 2022.
10.1 At Market Issuance Sales Agreement dated August 24, 2022 by and between PDS Biotechnology Corporation, B.
Riley Securities,
Inc., and BTIG, LLC (incorporated by reference to Exhibit 1.2 to the Registration Statement on Form S-3 filed
by the
Company on August 24, 2022, Reg. No. 333-267041).
23.1 Consent of DLA Piper LLP (US) (contained in Exhibit 5.1 above).
99.1 Press Release dated August 24, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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