CBio Limited (CBZ) is pleased to announce that it has secured up to A$12.45 million in funding with the New York-based institutional investor SpringTree Special Opportunities Fund, LP (SpringTree). CBio has entered into a Convertible Loan Agreement with SpringTree which provides funding to the Company over a three-year period.
The minimum funding available under the facility is A$5.45 million, with the first tranche of A$200,000 available to CBio within the coming days. The remaining funds can be drawn down each month in tranches of between A$150,000 and A$350,000, subject to the requisite shareholder approvals. The loans under the facility will be repaid through the issue of shares and options according to a formula contained within the Convertible Loan Agreement.
CBio Managing Director Jason Yeates said the SpringTree funding facility is a significant aspect of the Company’s business plan into 2011 and beyond. “This funding provides a level of financial stability for the Company for the next three years. It provides working capital needed to complete the current Phase II clinical trial as well as funding resources needed to explore a number of development activities planned for 2011,” said Mr Yeates. “The Agreement also offers flexibility in that it can be cancelled should it not suit our circumstances in the future and allows the Board to now fully focus its energies on the strategic direction of the Company over what will be a critical next 12 months,” he said.
CBio is currently completing a 150-patient, phase IIa trial in Rheumatoid Arthritis at sites throughout Australia, New Zealand and Central and Eastern Europe. The Company expects results from the trial to be available in mid-2011.
SpringTree is a New York-based investment fund that makes debt and equity investments in small and mid-cap public companies around the world. Eugene Tablis, a Managing Director of SpringTree Global Investors, LLC (SpringTree’s general partner (manager)) said the CBio opportunity is a great fit for the Fund. “While this is our first rheumatology therapeutics investment, this is our fourth Australian biotechnology investment and we have been very impressed with the quality of the Australian science that is often under-discovered by the global markets, as well as the quality of CBio’s management.”
