It will be interesting to see what the panel decide here, the takeovers panel have been asked to intervene and unwind the recent placement.
Factor Therapeutics Limited – Panel Receives Application
The Panel has received an application from Pura Vida Energy NL in relation to the affairs of Factor Therapeutics Limited. The application concerns a placement made by Factor Therapeutics shortly after the applicant and another shareholder gave a s249D notice to the company.
Details of the application, as submitted by the applicant, are below.
A sitting Panel has not been appointed at this stage and no decision has been made whether to conduct proceedings. The Panel makes no comment on the merits of the application.
Details
Factor Therapeutics is a clinical-stage biotechnology company developing therapeutics for advanced wound care. On 14 November 2018, Factor Therapeutics announced its Phase 2 trial had failed and further activity would be limited to maintaining its existing intellectual property portfolio.
On 1 February 2019, the applicant and another shareholder gave a s249D notice to Factor Therapeutics requesting a general meeting be held to consider resolutions removing three of the four current directors from the board and appointing two new directors nominated by the requisitioning shareholders.
On 5 February 2019, Factor Therapeutics announced it had completed a placement of 208,500,000 shares, representing 19.99% of the enlarged share capital of the company, at a price of $0.002 per share to sophisticated existing and new investors to raise $417,000.1
The applicant submits (among other things) that:
1 The placement was made within the company’s placement capacity under ASX Listing Rule 7.1 and 7.1A
2/2
• Subsequent to receiving the s249D notice, the board caused the issue of new
shares representing 19.99% of the expanded share capital of the company to
undisclosed places at a 50% discount to the last traded share price in
circumstances where the company “has no disclosed or discernible need to raise
funds”.
• Existing shareholders of Factor Therapeutics who did not participate in the
placement have suffered a significant dilution of their voting power without the
opportunity to participate in the capital raising, which is likely to have a
significant effect on the control of Factor Therapeutics and in particular the
composition of its board after the upcoming general meeting.
The applicant seeks final orders unwinding the placement or, in the alternative,
prohibiting any of the shares issued under the placement from being voted at the
s249D general meeting.
FTT Price at posting:
0.3¢ Sentiment: None Disclosure: Held
