Mereo BioPharma gets investment of $3 Million

Mereo BioPharma has entered into a Securities Purchase Agreement with a new U.S.-based institutional healthcare investor. Under the terms of the Agreement, the institutional investor has agreed to make an investment of $3 million to purchase 12,252,715 of the Company’s ordinary shares (equivalent to 2,450,543 American Depository shares (ADSs)) at a price equivalent to 18.8 pence per share, which represents a 20% discount over Mereo’s closing share price of 23.5 pence on AIM on February 18, 2020.

Mereo intends to use the net proceeds from the private offering for general corporate purposes, including clinical trial activity and working capital. There are no warrants, derivatives, or other share classes associated with the Agreement. Further, there are no restrictions on future financings and there are no financial covenants, participation rights, rights of first refusal, or penalties in the Agreement.

Additional detail regarding the Agreement is set forth in Mereo’s Report on Form 6-K filed today with the SEC.

Application has been made for 12,252,715 new ordinary shares of £0.003 each (the “New Shares”) to be admitted to trading on AIM (“Admission”) and it is expected that Admission will take place at 8.00 a.m. on February 20, 2020. These New Shares will rank pari passu with the existing ordinary shares in the capital of the Company.

The New Shares represent approximately 9.8% of the enlarged issued share capital of Mereo.  Following Admission, the total number of shares in issue will be 124,507,857 ordinary shares of £0.003 each, each with voting rights, none of which are held in treasury. Therefore, the total number of voting rights in the Company will be 124,507,857. Shareholders may use this figure as the denominator for the calculations by which they will determine if they are required to notify their interest in, or to notify a change to their interest in, the issued share capital of Mereo, pursuant to the Disclosure Guidance and Transparency Rules.