Race Oncology Limited (ASX: RAC) is pleased to announce that it has received binding commitments to raise $5.4m (before associated costs) in an oversubscribed equity placement to new and existing institutional and sophisticated investors (Placement), and the commencement of a bonus issue of options to existing eligible shareholders of Race (Bonus Option Issue).

“This new funding supports efforts to deliver outsized returns to shareholders via our Three Pillar strategy, where we are investigating Bisantrene as both a potential precision oncology agent, and as a heart-friendlier chemotherapeutic. We appreciate the amount of interest shown in both Race and Bisantrene through this process and thank all those who participated in the Placement.”

Race’s CEO and Managing Director, Phil Lynch

“We thank our new and existing shareholders for their continuing support. We believe that this raise will accelerate our plans and rewards our loyal shareholders. Race remains efficient with our capital usage and will always be focused on achieving the best outcome for our shareholders and the patients who may be helped by Bisantrene.”

Dr Daniel Tillett, Race’s CSO and Executive Director

About the Placement

Race will raise $5.4m (before associated costs) under the Placement by the issue of approximately 1.8m new fully paid ordinary shares (New Shares) at an issue price of $3.00 per share. The issue price represents a 2.3% discount to the last traded price and an 7.8% discount to the 10-day volume weighted average price of $3.25.

Participants in the Placement will receive 1 free attaching option (exercisable at $4.50 and expiring 16 May 2022) (Placement Option) for every 20 New Shares subscribed for and issued under the Placement. The Placement, including the Placement Options, is not subject to shareholder approval.

The cornerstone investor to the Placement was existing Race shareholder, Merchant Opportunities Fund. Merchant Opportunities Fund is a boutique fund with a number of long-term, strategic investments in the Australian biotechnology industry. Race accepted bids above $5m to cover all costs in managing the Placement leaving approximately $5m for planned activities.

Merchant Capital Partners Pty Ltd and MST Financial Services Pty Ltd acted as Joint Lead Managers and bookrunners to the Placement. IR Department provided investor relations support.

The New Shares and Placement Options are expected to be allotted and issued by 14 May 2021 and New Shares will rank equally with the existing ordinary shares on issue. The New Shares and Placement Options will be issued pursuant to the Company’s existing placement capacity under ASX listing rule 7.1.

Use of Funds

The Placement provides Race with additional capital to be primarily deployed toward its Three Pillar strategy and supporting plans:

• Pillar 1: Phase 1 dose escalation trial to determine optimal FTO-targeted Phase II dosage
• Pillar 2: Preclinical study to determine the molecular mechanism of action of Bisantrene’s heart safety
• Pillar 3: Initiation of studies in Europe and the United States to support extramedullary Acute Myeloid Leukaemia clinical trials
• Corporate: scaled manufacturing of Bisantrene to support Phase II/III trials

About the Bonus Option Issue

Race is also pleased to announce a pro-rata non-renounceable Bonus Option Issue (exercisable at $4.50 and expiring 16 May 2022) (Bonus Options) to existing eligible shareholders on the basis of 1 Bonus Option for every 20 shares held on the record date.

The primary purpose of the Bonus Option Issue is to reward loyal shareholders in Race, while efficiently growing the Company.

The Bonus Option Issue is being extended to eligible shareholders who have a registered address in Australia or New Zealand at 7:00 pm AEST on 13 May 2021.

The Bonus Options and the Placement Options will be in the same class and will not be listed. The details of the offer are contained in the Bonus Option Prospectus below.

Prospectus