Australia’s Recce Receives $6 Million Investment Commitment


AUSTRALIA – Recce Limited (ASX: RCE), a pre-clinical-stage pharmaceutical company engaged in the development of a new class of synthetic antibiotics, today announced it had entered an agreement for a flexible funding commitment of up to A$6.05 million with The Australian Special Opportunity Fund LP (ASOF).

The investment provides capital to support Recce’s synthetic antibiotic through its Investigative New Drug (IND) Application to the Food and Drug Administration in the USA and Phase I clinical trials.

ASOF, managed by New York-based institutional asset manager The Lind Partners focuses its investments on promising ASX-listed companies. The Lind team has made
more than 50 ASX investments since 2009 with many in the biotech sector.

The share purchase and convertible security agreement gives Recce access, subject to certain conditions, to capital through a flexible convertible instrument and the ability to secure additional funding in monthly stages.

It allows Recce to issue shares at prices linked to the share price prevailing at the time, minimising dilution for existing shareholders while supporting anticipated financing needs to strengthen its pursuit of developmental milestones.

During the 24 month term, ASOF has committed to invest up to a total of A$6,050,000 in Recce’s equity.

Lind will make an initial upfront investment of A$300,000 by way of a A$250,000
24-month interest-free unsecured convertible security (with face value of A$300,000) and a $50,000 equity investment to be satisfied through the issue of ordinary shares.

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Subsequent investments will, subject to certain conditions, be made in monthly equity tranches of A$50,000 that can be increased up to A$250,000 by mutual consent between Recce and ASOF.

The investment gives Recce access to additional funding to support the submission of its IND Application for its RECCE® 327 synthetic antibiotic to the US Food & Drug Administration (FDA) in coming months and planned start of a Phase I clinical study as well as working capital to support related technology opportunities.

Recce retains the right to pause the monthly tranche schedule for up to 3 months in any 12 month period, provided at least 3 tranches have been advanced by ASOF.

Recce has the right to terminate the agreement at any time if the issue price of shares for any tranche will be less than 15 cents.

“These funds provide our business with some additional certainty over the next 24 months as we focus on delivering on our clinical development milestones for our lead candidate antibiotic as a potential solution to the problem of drug resistant antibiotics. The investment structure secured minimises dilution for existing shareholders while allowing the business to maintain a routine cash flow,” Recce Executive Chairman Dr Graham Melrose said:

The Lind Partners Managing Director Phillip Valliere said, “We look forward to working with Recce as management continues to deliver on its milestones. We acknowledge the significant potential of their important work to develop urgently needed new options to treat antibiotic resistant infections, and are happy to be able to provide the business with capital that will help achieve its goals.” –