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The issue of CDIs under the Placement will occur in two tranches. The first tranche closed on the morning of 23 January 2018, resulting in the raising of AUD $996,347 (USD $779,442) by the issue of 28,467,063 CDIs (representing 569,341 shares of common stock). The second tranche, expected to result in the raising of AUD $1,060,974 (USD $830,000) by the issue of 30,313,556 CDIs (representing 606,271 shares of common stock) will be subject to shareholder approval at an Extraordinary General Meeting (EGM). The EGM date will be announced concurrently with filing of the proxy. Please refer to the Company’s EGM proxy statement that will be available on the Company’s website.
The funds raised under the Placement will be used by GI Dynamics to fund the continued development of EndoBarrier and for general working capital purposes.
As detailed in the Company’s recent 10Q filings, GI Dynamics continues to operate with substantial doubt about its ability to continue as a going concern.
“We are focused on securing approval for a study from the FDA for a new pivotal clinical trial of EndoBarrier,” said Scott Schorer, president and chief executive officer of GI Dynamics. “The leadership team, employees, and directors of GI Dynamics remain resolved in our commitment to continue to develop EndoBarrier for the millions of patients who have no viable treatment option for type 2 diabetes and obesity.”
The CDIs under Tranche 1 of the Placement comprise 28,467,063 CDIs (representing 569,341 shares of common stock). The CDIs were issued the morning of 23 January 2018 and will rank equally in all respects with CDIs on issue at the time of allotment.
The CDIs that have been subscribed for under Tranche 2 of the Placement comprise 30,313,556 CDIs (representing 606,271 shares of common stock) are subject to shareholder approval during the upcoming EGM. It is expected that the Tranche 2 CDIs will be issued within 5 business days of the date of the EGM (should shareholder approval be obtained) and will rank equally in all respects with CDIs on issue at the time of allotment.
Restrictions on Resale of Securities in the United States
The securities to be offered have not been registered under the Securities Act of 1933, as amended (Act), or any state securities laws, and until so registered may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Act and applicable state securities laws. This announcement is not an offer to sell, nor a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction or an applicable exemption therefrom.