Recce Pharmaceuticals Secures $8M Placement and Launches $3M Entitlement Offer to Shareholders

• $8 million commitments received in a strongly supported placement to new and existing institutional investors 
• $3 million entitlement offer at the same offer price as the placement
• Directors intend to take up entitlements in part or in full in the entitlement offer 
• Global fund to become ‘Substantial Shareholder’ (>5% ownership) on completion of the placement
• Funds to support multiple Phase I/II clinical trials and international expansion

SYDNEY, Australia, Sept. 13, 2023 (GLOBE NEWSWIRE) — Recce Pharmaceuticals Ltd (ASX: RCE, FSE: R9Q) (the Company or Recce), the Company developing a new class of synthetic anti-infectives, announced today a capital raise of up to approximately $11 million before costs consisting of:

• Placement of approximately $18.2 million new fully paid ordinary shares in the Company (New Shares) at $0.44 per new share (Offer Price), with commitments received totaling $8 million from institutional, sophisticated, and professional investors (Placement).
• A pro-rata non-renounceable entitlement offer of one new share for every 26 existing fully paid ordinary shares in the Company (Shares) held by eligible shareholders at the same offer price as the placement to raise to a further $3 million (Entitlement Offer).

“We are thrilled to receive such strong financial interest, particularly among global investment funds,” said James Graham, Chief Executive Officer of Recce Pharmaceuticals. “It was important to the Recce team that our shareholders be offered the same opportunity, and we are pleased to make this available to them. As the world’s most clinically advanced new class of anti-infectives at this time, it is clear that commercial potential is recognized. With a strengthened balance sheet and multiple clinical trials, we are well positioned for the time ahead.”

Use of Funds
The funds raised will be used for the following activities:

• $6M – Clinical trials (significant, unmet medical needs):
  • Phase I/II (IV) – Urinary tract infections/urosepsis
  • Phase II (topical) – Burn wound infections
  • Phase II (topical) – Diabetic Foot infections
• $2M – Build out advanced pre-clinical portfolio (in vitro, in vivo, and ex vivo studies)
• $1M – Manufacturing boost, including geographical expansion to the U.S.
• $2M – General working capital (operational costs delivering above)

Details of the Placement
The Company has received binding commitments from institutional, sophisticated, and professional investors to subscribe for 18,181,819 new shares in the Company at the offer price to raise approximately $8 million before costs.

The issue price of $0.44 per new share under the capital raising represents:

• a 32.3% discount to the last closing price of $0.650 on September 7, 2023
• a 35.0% discount to the 5-day Volume Weighted Average Price (VWAP) of $0.677
• a 36.6% discount to the 15-day VWAP of $0.694

All new shares issued under the capital raising will rank equally with existing shares of the Company from their issue date. The placement is not subject to shareholder approval and will fall within the Company’s placement capacity under ASX Listing Rule 7.1.

The placement is anticipated to settle on Friday, September 15, 2023, which is after the record date for the entitlement offer (Thursday, September 14, 2023), such that participants in the placement will not be entitled to participate in the entitlement offer in respect of any new shares issued to them under the placement.

The placement is not underwritten, and Canaccord Genuity (Australia) Limited acted as Lead Manager to the placement, and Ord Minnett Limited acted as Co-manager to the placement.

Details of the Entitlement Offer to Shareholders
Participation in the entitlement offer will be open to Recce shareholders who are registered holders of shares at 7:00 p.m. AEST on the record date, Thursday, September 14, 2023, and who have a registered address in Australia or New Zealand (Eligible Shareholders).

Each of the Directors of the Company intends to subscribe for their respective entitlement partially or in full under the entitlement offer.

The entitlement offer will allow eligible shareholders to receive one new share for every 26 existing shares held by eligible shareholders on the record date at an issue price of $0.44 per new share.

The entitlement offer will be open to eligible shareholders from Friday, September 15, 2023, to 5:00 p.m. AEST on Wednesday, September 27, 2023, and will not be underwritten.

Any new shares not applied for under the entitlement offer and any entitlements that would have been offered to ineligible shareholders if they had been entitled to participate in the offer will form part of the shortfall from the entitlement offer. Eligible shareholders who take up their full entitlement under the entitlement offer will have the opportunity to apply for additional new shares above their entitlement through a shortfall facility, subject to the Corporations Act 2001 and ASX listing rules.

There is no guarantee that applicants under this shortfall facility will receive all or any of the additional new shares that they apply for under the shortfall facility.

Any entitlements not taken up according to the entitlement offer and not otherwise allocated to eligible shareholders under the shortfall facility may be placed by the Company at its discretion up to three months after the closing date of the entitlement offer, subject to the Corporations Act and ASX listing rules.

The entitlement offer is non-renounceable, and entitlements will not be tradeable on ASX or otherwise transferable. Eligible shareholders who do not take up their entitlements will not receive any value for those entitlements that they do not take up.

Further information in relation to the entitlement offer will be sent to eligible shareholders in the offer booklet and accompanying personalized entitlement and acceptance form, which are expected to be dispatched on Friday, September 15, 2023.

Indicative Timetable

(a)Note: This timetable is indicative only and subject to change. The Company reserves the right to vary the above dates and times, subject to the ASX Listing Rules and the Corporations Act.

About Recce Pharmaceuticals Ltd
Recce Pharmaceuticals Ltd (ASX: RCE, FSE: R9Q) is developing a new class of Synthetic Anti-Infectives designed to address the urgent global health problems of antibiotic-resistant superbugs and emerging viral pathogens.

Recce’s anti-infective pipeline includes three patented, broad-spectrum, synthetic polymer anti-infectives: RECCE^® 327 as an intravenous and topical therapy that is being developed for the treatment of serious and potentially life-threatening infections due to Gram-positive and Gram-negative bacteria including their superbug forms; RECCE^® 435 as an orally administered therapy for bacterial infections; and RECCE^® 529 for viral infections. Through their multi-layered mechanisms of action, Recce’s anti-infectives have the potential to overcome the hypercellular mutation of bacteria and viruses – the challenge of all existing antibiotics to date.

The FDA has awarded RECCE^® 327 Qualified Infectious Disease Product designation under the Generating Antibiotic Initiatives Now (GAIN) Act – labelling it for Fast Track Designation, plus 10 years of market exclusivity post approval. Further to this designation, RECCE^® 327 has been included on The Pew Charitable Trusts Global New Antibiotics in Development Pipeline as the world’s only synthetic polymer and sepsis drug candidate in development. RECCE^® 327 is not yet market approved for use in humans with further clinical testing required to fully evaluate safety and efficacy.

Recce wholly owns its automated manufacturing, which is supporting present clinical trials. Recce’s anti- infective pipeline seeks to exploit the unique capabilities of its technologies targeting synergistic, unmet medical needs.

Corporate Contact
James Graham
Recce Pharmaceuticals Ltd
+61 (02) 9256 2571
James.graham@recce.com.au

Media & Investor Relations (AU)
Andrew Geddes
CityPR
+61 (02) 9267 4511
ageddes@citypublicrelations.com.au

Media (USA)
Jordyn Temperato
LifeSci Communications
jtemperato@lifescicomms.com

Investor Relations (USA & EU)
Guillame van Renterghem
LifeSci Advisors
gvanrenterghem@lifesciadvisors.com