Zelira Therapeutics Ltd (ASX:ZLD, OTCQB:ZLDAF) has raised a total of US$5 million from a US-based family office fund to accelerate its growth initiatives.
Zelira is a global leader in the research and development of clinically validated cannabinoid medicines and its initiatives include:
- Clinical development and ongoing trials in Australia and the US;
- Additional licensing for Zelira Rx products and technologies;
- Commercialisation of RAF FIVE™ products with a focus on rapid market penetration; and
- Expansion of Zelira’s SprinjeneCBD footprint in the US and emerging global CBD markets.
Capital raised values Zelira at A$122.8 million: US$50 million for the listed entity and US$50 million for Zelira Dermatology, of which Zelira holds a 78% interest post fundraising.
Quincy Street to be major shareholder
Zelira has raised the $5 million from Quincy Street Capital LLC. The funds comprise US$3.5 million (A$4.79 million) via a placement of 79,908,676 Zelira fully paid ordinary shares at A$0.06 per share, a 54% premium to the stock’s last closing price.
It also includes one unlisted option for every two ordinary shares issued, expiring two years from the date of issue with an exercise price of A$0.09 per option, with 39,954,338 total unlisted options to be issued.
Finally, the deal includes US$1.5 million (A$2.05 million) via an equity investment in Ilera Derm LLC (Zelira Dermatology) for a 3% shareholding in that company, valuing Zelira Dermatology at US$50 million.
Quincy Street will become a substantial shareholder in Zelira with a 6.3% shareholding.
Settlement is expected to occur on October 22, 2021, with the shares and attaching options being issued around October 29, 2021.
Cap raise highlights "fundamental value"
“We are delighted to welcome US-based Quincy Street onto the register at an exciting time for Zelira,” Zelira Therapeutics founder & chairman Osagie Imasogie said.
“This capital raise, undertaken at a substantial premium to the current trading price, is a strong signal of the fundamental value this sophisticated and experienced investor sees in our scientifically based cannabinoid products that are already in market and coming to market, as well as our growing biopharmaceutical portfolio.
“We have an ambitious product development and sales growth strategy that we are executing on. The funds raised have not only introduced a new US-based fund onto Zelira’s register but more importantly, provides us with the capital to more aggressively roll out our growth strategy with a target of reaching financial breakeven by the end of next calendar year.
“The valuation at which this raising was undertaken highlights the substantial inherent value of our business relative to market capitalisation.
"Quincy Street was particularly appreciative of our several shots on goal strategy, that covers both our prescription [Rx] and Over the Counter [OTC] products. We look forward to delivering on the attractive growth opportunities within Zelira.”