Directors Provide $4m Loan Facility
Of the $4 million loan facilities to be made available to the Company, a $2 million facility has been provided by Mr Lee, with $1.1 million of this facility used to refinance the loan provided by Mr Lee in February 2019 (refer to announcement on 28 February 2019). This loan facility contains new terms, including Mr Lee's rights to security over Regeneus' assets to secure all amounts owing under the loan.
In addition, Paddington St Finance has agreed to extend a new $2 million loan facility to Regeneus. Paddington St Finance is an entity related to the Company's Independent Chairman Barry Sechos. This loan facility may be drawn upon once the $2 million loan facility provided by Mr Lee is fully drawn. The Paddington St Finance loan will also be secured over assets and undertaking of Regeneus. That security will rank equally with the security granted to Mr Lee.
Both loans contain the same repayment terms: repayment within 12 months from the date of the signed loan agreement; or five business days after Regeneus receives an upfront payment in connection with a licensing transaction to commercialise Progenza in Japan; or immediately upon an event of default occurring. The interest rate for both loans is 12% per annum.
Regeneus' believes the above funding arrangements provide the fairest value to shareholders.
Regeneus tested the market and was not able to secure equivalent funding at an equivalent cost.
The Company's decision to obtain financial accommodation from related parties demonstrates the Directors' commitment and confidence in the management team's ability to conclude commercial license arrangements for Progenza OA in Japan.
The ASX has granted Regeneus waivers from Listing Rule 10.1 to the extent necessary to enable Regeneus to grant security over its assets to both Leo Lee and Paddington St Finance without obtaining shareholder approval.
For a list of conditions, please visit:
About Regeneus Ltd
Regeneus Ltd (ASX:RGS) is a Sydney-based clinical-stage regenerative medicine company using stem cell technologies to develop a portfolio of novel cell-based therapies to address significant unmet medical needs in the human health markets with a focus on osteoarthritis and other musculoskeletal disorders, neuropathic pain and dermatology.