Shares in Edesa Biotech, Inc. (NASDAQ:EDSA) were sharply higher at the outset on Thursday. The clinical-stage biopharmaceutical company focused on developing host-directed therapeutics for immuno-inflammatory diseases, today announced that the company has entered into a purchase agreement with an entity affiliated with Par Nijhawan, MD, Edesa’s Chief Executive Officer and Founder, to invest up to $5 million in the company, including an immediate investment of approximately $1.5 million.
The entity will purchase shares of the company’s Series A-1 Convertible Preferred Shares, as amended (the “Series A-1 Preferred Shares”), having a stated value of $10,000 per share, and warrants to purchase the company’s common shares in a transaction structured as an at-the-market issuance under NASDAQ rules. The Series A-1 Preferred Shares will be convertible into the company’s common shares at a conversion price of $3.445. The Warrants will be exercisable for a number of common shares equal to 75% of the common shares initially issuable upon the conversion of the Series A-1 Preferred Shares.
Commenting on today’s announcement, Dr. Nijhawan said “I am pleased to demonstrate my strong belief in Edesa’s future growth opportunities and my continuing commitment to lead the company’s strategic initiatives. I believe Edesa has a strong development pipeline, and I am confident that we can continue to build on our operational and clinical success.”
EDSA shares sprang up 15 cents, or 4.4%, to $3.55.