PRIVATE PLACEMENT TOWARDS BOMI FRAMROZE – PRIMARY INSIDER DISCLOSURE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANOTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.
(Ålesund, 23 March 2020) Hofseth BioCare ASA ("HBC" or the "Company") announces that it has completed a private placement towards Chief Science Officer Dr. Bomi Framroze, through issuance of 3,253,370 new shares, at a price per share of NOK 6.73, which is 2% above the closing price on 20 Friday 2020 (the "Private Placement"). The Private Placement consequently raises approximately NOK 21.9 million in gross proceeds to the Company.
The Private Placement is resolved by the board of directors of the Company (the "Board") based on the authorization granted the Board by the general meeting of the Company on 30 August 2019, registered on 5 September 2019.
The Company considers the Private Placement beneficial in two respects. Bomi Framroze is an important member of the management of the Company, with competence and experience the Company requires in order to pursue stated strategies and achieve set targets. When Framroze is given the opportunity to subscribe for shares in the Company through the Private Placement, this is in accordance with the Company's practice in terms of incentivizing employees and other contributors to the Company's success. Secondly, the Private Placement will provide the Company with new capital to be used for working capital and general corporate purposes, and which will also serve to strengthen the Company's balance sheet.
Dr Bomi Framroze is a discovery research scientist with over 30 years of experience and more than 60 global patents and publications. His expertise in protein and enzyme science has been key to driving HBC’s product development and R&D. Central to the production of HBC’s products is a proprietary enzyme mix developed by Dr Framroze. When added to fish off-cuts (the remains of the fish after filleting) and mixed with water the enzyme hydrolysis cuts the protein into peptides (protein subunits), leaving the oil and bones untouched producing unprocessed, natural fish oil (OmeGo) and natural, marine collagen/calcium (CalGo). The peptides are then spray dried creating a powder (ProGo) of a multitude of peptides with varying biological effects. These effects are being systematically researched within HBC’s R&D programme.
Under Dr Framroze, key HBC R&D successes include the successful completion of the clinical trial programme of ProGo for the treatment of iron deficiency anaemia (IDA), preclinical work in collaboration with Stanford University with ProGo for the treatment of necrotising enterocolitis (NEC), a serious illness seen in preterm infants, and in vitro data in a phenotype of asthma where a component of the salmon oil has demonstrated a marked anti-inflammatory effect.
The clinical trial work of ProGo in IDA has resulted in both the granting of global patents for this clinical benefit and a label application to Health Canada, which is currently under review. If granted, HBC will be the first nutraceutical company to have a non-iron containing claim for the correction and prevention of IDA. Dr Framroze’s ongoing work has also identified a fraction of the bioactive peptides that drive much of the benefit in IDA. This provides the potential for HBC to encapsulate the peptides and move more towards a pharmaceutical rather than nutraceutical product.
The ongoing research work assessing the benefit of the ProGo peptides in gastrointestinal protection has demonstrated significant activity in a proprietary NEC animal model and work continues to identify the bioactive fraction of peptides driving this benefit. This could potentially enable enhanced dosing and further augmentation of the marked anti-inflammatory effect seen to date. Preclinical work continues in irritable bowel syndrome (IBS) and, as for NEC, HBC's ultimate aim is to develop the bioactive peptides as a pharmaceutical agent.
The Board is of the opinion that the Private Placement complies with the equal treatment obligations under the Norwegian Securities Trading Act and Oslo Børs' Circular no. 2/2014, in particular due to the fact that the Private Placement is directed towards a particular individual who holds a very important position in the Company and that his recent success and continued work on the projects described above is expected to be valuable for the Company and all its stakeholders. Further, the Private Placement involves a relatively limited dilution of existing shareholders, which the Board considers are justifiable when taking into account the expected contribution to the long-term success of the Company that the continued services of Bomi Framroze will contribute to. On this basis, the Board has considered the Private Placement to be in the common interest of the Company and its shareholders. As a consequence of the Private Placement structure, the shareholders' preferential rights were deviated from.
For the same reasons the Company will not carry out a repair issue directed towards shareholders that are not offered to participate in the Private Placement.
The new shares allocated in the Private Placement will be settled through cash payment, and the new shares shall be delivered as soon as practicable after full payment has been received and the new shares have been registered.
Following completion of the Private Placement, Bomi Framroze will directly and indirectly hold 5,000,000 shares in the Company.
Following registration of the new share capital pertaining to the Private Placement, the Company will have 329,073,881 shares outstanding, each with a par value of NOK 1.
For further information, please contact:
Roger Hofseth, CEO of Hofseth BioCare ASA
Phone: +47 951 47 941
James Berger, Head of Investor Relations & Strategy at Hofseth BioCare ASA
Phone: +41 799501034
About Hofseth BioCare ASA:
HBC is a Norwegian biotech company that develops high-value ingredients and finished products from Norwegian salmon off-cuts. Ingredients are further developed into discovery and pre-clinical studies in multiple clinics and university research labs in several countries. Lead clinical and pre-clinical candidates are development towards a Gastro-Intestinal (GI) Protective Medical Food, Medical Food to help treat age-related Sarcopenia, and future pharmaceutical clinical studies on the treatment of Anemia and NEC-IBS with Salmon Protein Hydrolysate fractions. The company is founded on the core values of sustainability, traceability and optimal utilization of natural resources. Through an innovative hydrolysis technology, HBC can preserve the quality of lipids, proteins and calcium from fresh salmon off-cuts and trimmings.
Hofseth BioCare's headquarters are in Ålesund, Norway with branches in Oslo, Chicago, Mumbai, Menlo Park and Tokyo. HBC is listed on Oslo Stock Exchange Axess list with ticker "HBC". More information about Hofseth BioCare at www.hofsethbiocare.com
This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act