Why leave out the rest of the paragraph?
"....and working capital and general corporate purposes "
The rest is interesting. The offer is registered with ASIC and not available to US citizens and being made over just two working days straddling this weekend. It seems that at least some of the warrants will be issued to Oaktree who can reassign or sell them at their discretion.
"The Offer is being made to satisfy Mesoblast's obligations under the Loan Agreement
The opening date of the Offer is Friday, 3 March 2023 (Opening Date) and the closing date of the Offer is 5.00pm (Melbourne time) on Monday, 6 March 2023 (Closing Date). Mesoblast reserves the right to extend the duration of the Offer or close the Offer early without notice.
The Offer is not underwritten and there is no sponsoring broker"
As announced to the ASX on 23 December 2022, Oaktree extended to Mesoblast the
availability of up to US$30 million of its existing US$90 million 5 year senior secured debt
facility under the Loan Agreement, subject to achieving certain milestones on or before 30
September 2023.
Mesoblast drew the first tranche of US$60.0 million in November 2021. The facility has a
three-year interest only period, at a rate of 9.75% per annum, after which time 40% of the
principal amortizes over two years with a final payment due in November 2026. In
consideration of the milestone extension period, Mesoblast will offer and issue to
Approved US Investors the Offer Securities comprising 455,000 Warrants.
Under the Loan Agreement, the lender may assign any of its rights without prior notice to
the Company, and all such rights shall inure to the benefit of the lender's assignees. This
assignment right is subject to certain restrictions where the assignee is a competitor of
the Company.
Exercise Price
Each Warrant will have an exercise price of USD$3.70 (Exercise Price) and convert into
one ADS which represents five Shares.
Exercise
During the (7 Year) Exercise Period, a Warrant holder may exercise (in whole or in part) their Warrants by:
(i) delivering to the Company and the Depository, written notice in the
prescribed form of the Warrant holder's election to exercise the Warrant; and
(ii) paying to the Company an amount equal to the Exercise Price multiplied by
the number of Warrants being exercised.
Delivery of ADSs
On or before the fifth Trading Day following the Company's receipt of a Warrant holder's
valid exercise of some or all of its Warrants (including payment of the relevant aggregate
Exercise Price), the Company will deposit the underlying Shares of each ADS with the
Depository and cause the Depository to credit to the Warrant holder the relevant number
of ADS
Risks
(b) Lack of liquidity and effect of exercise price
As the Offer Securities will not be quoted on ASX, there is a limited market for the
Offer Securities. You should also be aware that the exercise price of the Offer
Securities may be in excess of the market price of the underlying Shares during the
exercise period applicable to them
8.4 Litigation
A class action proceeding in the Federal Court of Australia was served on the Company in
May 2022 by the law firm William Roberts Lawyers on behalf of persons who, between
February 22, 2018, and December 17, 2020, acquired an interest in Mesoblast shares,
American Depository Receipts, and/or related equity swap arrangements. In June 2022,
the firm Phi Finney McDonald commenced a second shareholder class action against the
Company in the Federal Court of Australia asserting similar claims arising during the same
period. Like the class action lawsuit from October 2020 filed in the U.S. Federal District
Court for the Southern District of New York (which had court approval for settlement in
August 2022), the Australian class actions relate to the Complete Response Letter
released by the FDA in relation to the Company's GvHD product candidate; they also
relate to certain representations made by the Company in relation to our COVID-19
product candidate and the decline in the market price of the Company's ordinary shares in
December 2020. In October 2022, the Australian class actions were consolidated into one
lawsuit. The Company will continue to vigorously defend against the proceedings. The
Company cannot provide any assurance as to the possible outcome or cost to us from the
lawsuit, particularly as it is at an early stage, nor how long it may take to resolve such law
suit. Thus, the Company has not accrued any amounts in connection with such legal
proceedings. "
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