Edesa Biotech (EDSA) Announces $15M Private Placement

Edesa Biotech, Inc. (Nasdaq: EDSA) (the “Company” or “Edesa”), a clinical-stage biopharmaceutical company focused on developing host-directed therapeutics for immuno-inflammatory diseases, today announced that it has sold, in a private placement, an aggregate of 834 newly designated Series B-1 convertible preferred shares (“Series B-1 Preferred Shares”) and 3,468,746 common shares in a private placement priced at-the-market under the rules of the Nasdaq Stock Market. The purchase price per Preferred Share was $10,000 and the purchase price per common share was $1.92. Officers and directors of the Company purchased approximately $1.1 million of the securities sold in the offering.

The Series B-1 Preferred Shares and common shares were offered directly to the investors without a placement agent, underwriter, broker or dealer. Velan Capital led this placement, and it also included new investors Nantahala Capital, Rubric Capital Management LP, Stonepine Capital Management, Broadfin Holdings LLC, and existing Edesa shareholders and insiders. The offering closed on February 12, 2025.

Gross proceeds from the offering were approximately $15.0 million before deducting any offering-related expenses. Edesa currently expects to use the net proceeds from the offering, to fund the continued advancement of EB06, its CXCL10 monoclonal antibody, into a Phase 2 clinical study in subjects with nonsegmental vitiligo, and for working capital and general corporate purposes.

The Series B-1 Preferred Shares have a stated value of $10,000 per share. Subject to certain exceptions and adjustments for share splits, each Series B-1 Preferred Share is convertible into a number of the company’s common shares (“Conversion Shares”) calculated by dividing the sum of the stated value of the Series B-1 Shares being converted by the conversion price of $1.92. Conversions of Series B-1 Preferred Shares are subject to a beneficial ownership limitation, capping individual holders’ ownership at a maximum of 4.99% (or, at the option of the investor, 9.99%) of the outstanding common shares upon exercise.

In connection with the offering, David Liu, a Senior Analyst at Velan Capital, was appointed to Edesa’s Board of Directors, effective immediately upon closing, pursuant to an Investor Rights Agreement.

The securities described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act"), and Regulation D promulgated thereunder and have not been and will not be registered under the Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The securities described above were offered to "accredited investors" within the meaning of the Canadian National Instrument 45-106 - Prospectus Exemptions. The securities issued will be subject to applicable Canadian hold periods imposed under applicable securities legislation.

The Company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the common shares and Conversion Shares within 30 days of the closing.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. The company plans to file Current Report on Form 8-K with the Securities and Exchange Commission with additional details of the offering and board appointment.

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